IRS Raises 2026 Mileage Rate to 72.5¢, Impacting Pizza Hut Drivers

The Internal Revenue Service increased the optional standard mileage rate for business use to 72.5 cents per mile beginning Jan. 1, 2026, a 2.5 cent rise from 2025. The change will affect employers, payroll departments, self-employed workers and delivery drivers who rely on per-mile reimbursements or deductions.

"The optional standard mileage rate for business use of automobiles will increase by 2.5 cents in 2026, while the mileage rate for vehicles used for medical purposes will decrease by half a cent, reflecting updated cost data and annual inflation adjustments," the IRS said in its Dec. 29, 2025 release. The agency also listed the 2026 rates as "72.5 cents per mile driven for business use, up 2.5 cents from 2025. 20.5 cents per mile driven for medical purposes, down a half cent from 2025. 20.5 cents per mile driven for moving purposes for certain active-duty members of the Armed Forces (and now certain members of the intelligence community), reduced by a half cent from last year. 14 cents per mile driven in service of charitable organizations, equal to the rate in 2025."

The mileage rules apply to cars, vans, pickups and panel trucks and explicitly cover gasoline, diesel, fully electric and hybrid vehicles. The IRS noted the moving-purpose rate now extends to certain members of the intelligence community under the One, Big, Beautiful Bill, in addition to qualifying active-duty service members.

Millions of business owners, freelancers, franchise delivery drivers and field teams will use the new rate as a benchmark for reimbursements and deductions. For workers who log heavy miles, the difference can be material. Barneswendling calculated that at 15,000 business miles, the 2025 rate of 70.0 cents produced $10,500 while the 2026 rate yields $10,875 — "That’s an extra $375 in deductions from the same driving mileage. For businesses with frequent travel, the difference can be meaningful." Everlance and Simcoservices provide a smaller example: at 10,000 miles the 2025 rate equated to $7,000 while the 2026 rate is $7,250 — "In 2026, that same 10,000 miles will be worth $7,250."

Operationally, employers should note reimbursement and payroll implications. Barneswendling states, "For employers, reimbursing employees at or below 72.5¢ per mile remains tax-free under federal rules." Simcoservices warned employers to consider payroll accuracy, tax treatment, and employee expectations as they update policies.

Recordkeeping remains essential. Barneswendling lists the documentation workers should retain: "Date of the trip; Business purpose; Starting and ending mileage; Total miles driven." The blog added, "You can’t claim the deduction without accurate records," and urged automated mileage tracking as a practical solution because "Manually tracking mileage is error-prone and time-consuming. This can be overcome with automated mileage tracking. Automated mileage tracking can help to ensure every deductible mile is captured consistently." Everlance also emphasized keeping detailed logs to support claims in an audit.

Why this matters for Pizza Hut delivery drivers and franchise. The supplied sources did not provide Pizza Hut–specific reimbursement policies, head counts or quotes; confirming how individual franchisees handle payments will require direct reporting. For employers and drivers, the immediate steps are straightforward: update reimbursement tables, confirm whether payroll practices need amendment, and keep or adopt thorough mileage logs or automated tracking. The IRS release sets the federal benchmark; employers and workers should review company policies and IRS guidance to apply the new rates correctly.