Mileage allowance: the civil service rates and what is tax-free

Your employer can pay mileage for business journeys tax-free at up to the civil service rates. The rates, how the bands work, and what counts as business.

If you use your own car, motorcycle or bicycle for work journeys, your employer can pay you for the kilometres. No income tax, USC or PRSI is due. The limit is the rate paid to civil servants, which Revenue publishes. Anything above it is taxed as pay.

The car rates

The rate per kilometre depends on your engine size and on how far you have driven on business so far in the year. These rates have applied since 1 September 2022:

Fully electric cars use the middle column. Hybrids use the rate for their engine size. The second band pays the most; above 5,500 km the rate falls. Bicycles are paid 8c a km.

An example

An employee with a 1.6 litre car drives 8,000 business kilometres in 2026:

If the employer instead paid a flat 30c a km, that would be €2,400. That is lower, but still tax-free, because any rate up to the civil service rate is allowed.

What counts as a business journey

Travel between home and your normal place of work is your own commute and can't be paid tax-free. A business journey is travel from one place of work to another, or to a temporary place of work. Where you start from home, the distance that counts is the shorter of home to the temporary location and your normal workplace to it.

Home is not usually your normal place of work, even if you work from home some days, unless the duties have to be done there. Keep a log of each trip: date, route, purpose and distance.

Subsistence

When work keeps you away, your employer can also pay tax-free allowances for meals and stays (subsistence), at civil service rates: €19.25 for five to ten hours away and €46.17 for ten hours or more. The normal overnight rate is €205.53 a night, where you stay at least 100km from home and your normal workplace. Employers report these payments to Revenue.

If your employer pays less, or nothing

You can claim the travel costs your employer doesn't cover from Revenue. Use the claim form for car expenses and capital allowances (the car's cost written off over several years). You can't claim both ways: if you claim your actual costs, anything your employer paid becomes taxable pay.

Work it out

• Mileage and subsistence: what's tax-free →
• PAYE calculator →

Sources

• Revenue: Civil service motoring, bicycle and subsistence rates (checked 25/10/2026)
• Revenue: Travel and subsistence: reimbursement rates (tax-free up to civil service rates) (checked 16/10/2026)

General information, not tax advice. HeyPenny is not a tax agent.