If driving is part of your childcare routine, you need to know about the new 2026 mileage reimbursement rate. Whether you are a nanny using your personal vehicle for school drop-offs or a family reimbursing work-related driving, understanding the updated mileage reimbursement rate for nannies helps ensure fairness, compliance, and clarity in the new year. 

The IRS has officially announced that the 2026 business standard mileage rate will increase to 72.5 cents per mile, up 2.5 cents from the previous year. Here’s everything you need to know. 

1) What Is the 2026 Mileage Reimbursement Rate?

According to the Internal Revenue Service, the standard business mileage rate for 2026 is 72.5 cents per mile for work-related driving. This rate is designed to cover the average costs associated with using a personal vehicle for business purposes, including fuel, maintenance, insurance, and depreciation.

The mileage reimbursement rate applies when a caregiver uses their own car for job-related tasks, such as transporting children to school, activities, appointments, or running errands for the household. Commuting from home to work and vice versa is not included in these calculations. 

2) Why the Mileage Reimbursement Rate for Nannies Matters

The mileage reimbursement rate for nannies plays a critical role in protecting both caregivers and families. For nannies, it ensures that out-of-pocket vehicle expenses are not quietly absorbed into their wages. For families, it provides a clear and standardized method for reimbursement that aligns with federal guidance.

Mileage reimbursement is considered a non-taxable reimbursement when handled correctly, which means it does not count as income for the nanny and does not increase payroll taxes for the family.

3) Is Mileage Reimbursement Required?

In states like California, employers are required to reimburse employees for necessary work-related expenses, which include mileage when a nanny uses their personal vehicle for job duties. While federal law does not mandate reimbursement, the mileage reimbursement rate for nannies is widely considered best practice nationwide.

Even in states where it is not legally required, reimbursing mileage supports transparency, professionalism, and long-term job satisfaction.

4) How to Handle Mileage Reimbursement in 2026

To properly apply the mileage reimbursement rate for nannies, families should establish clear expectations from the start of employment. This includes outlining which types of driving qualify for reimbursement and how mileage will be tracked and paid.

Best practices include:

• Tracking mileage using a written log or mileage tracking app (like this one or this one)
  • Recording the date, purpose of the trip, and miles driven
  • Reimbursing mileage regularly, often alongside payroll
  • Using the IRS standard rate (72.5 cents per mile for 2026)

Clear systems reduce confusion and help ensure accurate reimbursement.

If you would like support setting up payroll and putting systems in place to seamlessly manage all-things nanny reimbursement, HomePay can help. 

5) What Nannies Should Know About Tracking Mileage

Nannies should feel empowered to track and submit mileage consistently. Using a simple system protects you financially and helps maintain a professional working relationship.

If you are unsure whether your nanny family follows the mileage reimbursement rate, ask for clarification. This is a standard part of household employment and not a special request, nor are you out of bounds to ask for specifics. If your nanny family has never worked with a nanny, it’s also possible that they are unaware of this practice. 

6) How Mileage Reimbursement Fits into Overall Compensation

Mileage reimbursement is separate from hourly wages and should not be rolled into pay rates. Using the proper mileage reimbursement rate ensures that caregivers are fairly compensated for vehicle use without undervaluing their time or increasing taxable income.

The increase to 72.5 cents per mile for 2026 is a meaningful and relevant update for both nannies and families. Staying informed about the mileage reimbursement rate for nannies helps everyone remain compliant, fair, and financially protected.

As with all aspects of household employment, clear communication and proactive planning make all the difference.