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Mileage Rates

Monday, April 24th, 2017

Mileage rate for self-employed people

If you are self-employed you can use the IRD mileage rate to calculate the cost of using your motor vehicle for business purposes.

Standard mileage rate for motor vehicles

The mileage rate for motor vehicles is 76 cents per kilometre.

You can use this rate for up to a maximum of 5,000 km of work-related travel per year. For distances greater than 5,000 km, you must keep a record of actual vehicle expenses.

The rate applies irrespective of engine size or whether your vehicle is powered by a petrol or diesel engine. The mileage rate does not apply to motorcycles.

Employee Reimbursement

To reimburse staff, including shareholder-employees using their own vehicle for work, you can use:

  • IRD mileage rate; or
  • rates published by a reputable independent New Zealand source representing a reasonable estimate (for example New Zealand Automobile Association mileage rates); or
  • actual costs

IRD Mileage Rate

The IRD accept the standard mileage rate as being a reasonable estimate of the costs likely to be incurred by an employee. An employer may choose to use the current rate of 73 cents per kilometre for reimbursing employees.

The 5,000 km limit for self-employed people does not apply to employers using the mileage rate to reimburse employees. Although employers may use the mileage rate to reimburse employees, that reimbursement must be a reasonable estimate of the costs likely to be incurred by the employee.

You can get further information regarding mileage from the IRD website here.