© 2025 American Payroll Institute, Inc.
January 10, 2025 Volume 33 Issue 1
Standard Mileage Rate Increases to 70 Cents in 2025
The IRS announced that the business standard mileage
rate for transportation expenses paid or incurred
beginning January 1, 2025, is 70 cents per mile, up 3 cents
from 67 cents per mile for 2024 [Notice 2025-5, 12-19-24].
The rate applies to electric, hybrid-electric, gasoline, and
diesel vehicles.
The mileage rate may be used to compute the amount
to reimburse employees who use their own cars for business
purposes. It may also be used by employers that elect to
use the “cents-per-mile” valuation method for purposes of
determining the amount that needs to be imputed to an
employee’s income for personal use of certain company-
owned or leased nonluxury vehicles (see The Payroll Source®,
§3.2-2). However, it may not be used by employees in
claiming a tax deduction for unreimbursed employee
business expenses, since such deductions are suspended
by the Tax Cuts and Jobs Act.
In addition, the 2025 standard rate for miles driven
for medical or moving purposes remains 21 cents per
mile (unchanged from 2024). The deduction for moving
expenses only applies to members of the Armed Forces on
active duty who move under a military order and due to a
permanent change of station.
The standard mileage rate for operating a passenger
car for charitable purposes, which is set by law, remains 14
cents per mile.
FMV decreases to $61,200
For vehicles put into service in 2025, the cents-per-mile
valuation method and the fleet-average valuation rule can
be used only if the vehicle does not have a fair market value
(FMV) of more than $61,200 ($62,000 in 2024).
Under the vehicle cents-per-mile method of valuing an
employee’s personal use of a company-provided vehicle,
the IRS’s standard business rate is multiplied by the personal
miles driven by the employee. Employers that provide
vehicles under the fleet-average valuation rule (applicable
to an employer with a fleet of 20 or more vehicles) may not
use the rule if any vehicles in the fleet exceed the maximum
allowable value.
For computing the allowance under a fixed and variable
rate (FAVR) plan, the standard automobile cost (including
trucks and vans) may not exceed $61,200 in 2025 ($62,000
in 2024). A FAVR allowance uses a flat rate or stated schedule
that combines periodic fixed and variable rate payments,
and it relieves employees of the need to keep a record of
their actual expenses (see The Payroll Source®, §3.3-5).
Use the correct rate
Because of the 3-cent increase in the business standard
Standard Mileage Rate Increases to 70 Cents in 2025. .............1
New Laws Change ACA Reporting Requirements...................... 2
IRS Releases 2025 Publication 15-T................................................. 2
DOL Reinstates Pre-2021 Dual Jobs Regulations. ......................3
Reminder: IRS Electronic Filing Threshold Is 10 Forms. .............3
IRS Releases 2025 Form W-4 With Minor Changes..................... 4
IRS Releases 2025 Forms W-4P, W-4R. ............................................5
IRS Releases 2025 Publications 15 (Circular E), 15-A, and 15-B..... 5
SSA Offers Tips to Employers Before Filing Season Begins....... 6
USCIS Finalizes Permanent EAD Automatic Extension Rule.... 7
IRS Proposes to Add Vehicle to Nonpersonal Use List................ 7
IRS Announces Quarterly Interest Rates........................................ 8
DOL Proposes Rule to End Subminimum Wage.......................... 8
IRS Releases Tax Calendars for 2025............................................... 8
Wage Amount for Government Control Employee Increases
to $183,100....................................................................................... 8
DHS Adjusts Immigration-Related Civil Penalties for Inflation..... 9
DOL Publishes Opinion Letters on Tips, CCPA.............................. 9
3rd Circuit Rules on FLSA Donning, Doffing Case.....................10
Learn More About Compliance at PAYO’s Capital Summit in
March...............................................................................................11
School District’s Payroll Services Director Admits to Payroll
Crimes. .............................................................................................11
Court Rules Against Delivery Driver in FLSA Case.....................12
IRS Updates Form to Request Extension to Furnish Statements....12
IRS Issues Rules to Modernize Language for U.S. Territories.....12
HHS Issues Rule to Officially Change OCSE to OCSS................12
DOL Releases Enforcement Stats for Fiscal Year 2024.............12
Payroll Solutions. ...............................................................................13
OCSS Reports More Than 1,000 Employers Use e-IWO. ..........13
11th Circuit Sends FLSA Tip Case Back to Lower Court for
Analysis...........................................................................................14
State and Local Highlights...............................................................15
PayrollOrg Supports Nacha Proposed ACH Rule Changes...... 17
PayrollOrg Presents at New York Child Support Conference .....18
An Update on Government Cooperation in the DMV
Metropolitan Area. ..................................................................18
January 10, 2025 Volume 33 Issue 1
Standard Mileage Rate Increases to 70 Cents in 2025
The IRS announced that the business standard mileage
rate for transportation expenses paid or incurred
beginning January 1, 2025, is 70 cents per mile, up 3 cents
from 67 cents per mile for 2024 [Notice 2025-5, 12-19-24].
The rate applies to electric, hybrid-electric, gasoline, and
diesel vehicles.
The mileage rate may be used to compute the amount
to reimburse employees who use their own cars for business
purposes. It may also be used by employers that elect to
use the “cents-per-mile” valuation method for purposes of
determining the amount that needs to be imputed to an
employee’s income for personal use of certain company-
owned or leased nonluxury vehicles (see The Payroll Source®,
§3.2-2). However, it may not be used by employees in
claiming a tax deduction for unreimbursed employee
business expenses, since such deductions are suspended
by the Tax Cuts and Jobs Act.
In addition, the 2025 standard rate for miles driven
for medical or moving purposes remains 21 cents per
mile (unchanged from 2024). The deduction for moving
expenses only applies to members of the Armed Forces on
active duty who move under a military order and due to a
permanent change of station.
The standard mileage rate for operating a passenger
car for charitable purposes, which is set by law, remains 14
cents per mile.
FMV decreases to $61,200
For vehicles put into service in 2025, the cents-per-mile
valuation method and the fleet-average valuation rule can
be used only if the vehicle does not have a fair market value
(FMV) of more than $61,200 ($62,000 in 2024).
Under the vehicle cents-per-mile method of valuing an
employee’s personal use of a company-provided vehicle,
the IRS’s standard business rate is multiplied by the personal
miles driven by the employee. Employers that provide
vehicles under the fleet-average valuation rule (applicable
to an employer with a fleet of 20 or more vehicles) may not
use the rule if any vehicles in the fleet exceed the maximum
allowable value.
For computing the allowance under a fixed and variable
rate (FAVR) plan, the standard automobile cost (including
trucks and vans) may not exceed $61,200 in 2025 ($62,000
in 2024). A FAVR allowance uses a flat rate or stated schedule
that combines periodic fixed and variable rate payments,
and it relieves employees of the need to keep a record of
their actual expenses (see The Payroll Source®, §3.3-5).
Use the correct rate
Because of the 3-cent increase in the business standard
Standard Mileage Rate Increases to 70 Cents in 2025. .............1
New Laws Change ACA Reporting Requirements...................... 2
IRS Releases 2025 Publication 15-T................................................. 2
DOL Reinstates Pre-2021 Dual Jobs Regulations. ......................3
Reminder: IRS Electronic Filing Threshold Is 10 Forms. .............3
IRS Releases 2025 Form W-4 With Minor Changes..................... 4
IRS Releases 2025 Forms W-4P, W-4R. ............................................5
IRS Releases 2025 Publications 15 (Circular E), 15-A, and 15-B..... 5
SSA Offers Tips to Employers Before Filing Season Begins....... 6
USCIS Finalizes Permanent EAD Automatic Extension Rule.... 7
IRS Proposes to Add Vehicle to Nonpersonal Use List................ 7
IRS Announces Quarterly Interest Rates........................................ 8
DOL Proposes Rule to End Subminimum Wage.......................... 8
IRS Releases Tax Calendars for 2025............................................... 8
Wage Amount for Government Control Employee Increases
to $183,100....................................................................................... 8
DHS Adjusts Immigration-Related Civil Penalties for Inflation..... 9
DOL Publishes Opinion Letters on Tips, CCPA.............................. 9
3rd Circuit Rules on FLSA Donning, Doffing Case.....................10
Learn More About Compliance at PAYO’s Capital Summit in
March...............................................................................................11
School District’s Payroll Services Director Admits to Payroll
Crimes. .............................................................................................11
Court Rules Against Delivery Driver in FLSA Case.....................12
IRS Updates Form to Request Extension to Furnish Statements....12
IRS Issues Rules to Modernize Language for U.S. Territories.....12
HHS Issues Rule to Officially Change OCSE to OCSS................12
DOL Releases Enforcement Stats for Fiscal Year 2024.............12
Payroll Solutions. ...............................................................................13
OCSS Reports More Than 1,000 Employers Use e-IWO. ..........13
11th Circuit Sends FLSA Tip Case Back to Lower Court for
Analysis...........................................................................................14
State and Local Highlights...............................................................15
PayrollOrg Supports Nacha Proposed ACH Rule Changes...... 17
PayrollOrg Presents at New York Child Support Conference .....18
An Update on Government Cooperation in the DMV
Metropolitan Area. ..................................................................18
