Mileage Reimbursement Calculator NZ

Quick answer: The IRD kilometre rate has two tiers. Tier one covers the first 14,000 km the vehicle travels in the year, and tier two covers everything past that, with both applied to your business share of the distance. Driving 12,000 business kilometres out of 20,000 total gives $10,080 at the tier one rate and $1,332 at tier two, so $11,412 in total.

This calculator works out a business mileage claim or vehicle reimbursement in New Zealand using the Inland Revenue kilometre rates, the simplest way for the self-employed, businesses and employers to put a dollar figure on work-related driving. Rather than tracking every receipt for fuel, servicing and depreciation, IRD lets you claim a set rate per kilometre travelled for business. The rates come in two tiers: a higher tier one rate covers the first fourteen thousand kilometres of total travel in the year, combining business and private use, and a lower tier two rate applies to business kilometres beyond that point, reflecting that the fixed costs of owning the vehicle are already covered. You enter your business kilometres for the year and the current tier one and tier two rates, along with the tier one cap, and the calculator splits your travel across the tiers and totals your reimbursement, showing the amount claimed at each rate. Use it to estimate what you can claim, to reimburse staff tax-free for work travel, or to compare against keeping actual cost records. You will need a logbook of your business kilometres and your total kilometres for the year. The IRD rates change annually, so enter the current figures. General information, not tax advice.

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$11,412
total mileage reimbursement
Tier 1 portion$10,080
Tier 2 portion$1,332

Tier 1 covers the business share of the first 14,000 km of TOTAL travel; tier 2 covers the business share beyond that. Defaults are the 2025-26 petrol rates. Diesel is $1.30 and $0.38, petrol hybrid $0.90 and $0.24, electric $1.22 and $0.23. Rates change annually; enter current IRD figures. General information only.

How it works

The 14,000 km cap is measured against your TOTAL kilometres for the year, private travel included, not against your business kilometres. The calculator works out your business use share, applies the tier one rate to that share of the first 14,000 total kilometres, and the tier two rate to that share of anything beyond. The total is the sum of the two. Splitting business kilometres at the cap instead, which is the intuitive reading, overstates the claim for any vehicle with meaningful private use.

Worked example

A petrol car travels 20,000 km in the year, of which 12,000 are for business, a business share of 60 percent. The first 14,000 total kilometres carry the tier one rate, and 60 percent of those is 8,400 business kilometres at 1.20 dollars, which is 10,080 dollars. The remaining 6,000 total kilometres carry the tier two rate, and 60 percent of those is 3,600 business kilometres at 0.37 dollars, which is 1,332 dollars. The total claim is 11,412 dollars.

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Data sources: the rates and thresholds on this page are maintained against Inland Revenue. Figures are checked twice monthly.

Frequently asked questions

What are the IRD kilometre rates?

IRD publishes kilometre rates to reimburse business vehicle use. A higher tier one rate covers the first 14,000 km travelled in the year (business and private combined), and a lower tier two rate applies to business kilometres beyond that. The rates are updated annually.

Who can use these rates?

Self-employed people and businesses can use them to claim or reimburse the cost of using a vehicle for work, as an alternative to recording actual running costs. Employers can also use them to reimburse employees tax-free for work travel.

What records do I need?

You need a log of your business kilometres, ideally a logbook covering a representative period. The tier one rate only applies to the first 14,000 km of total travel, so you also need to know your total kilometres for the year.