2019 Mileage Rate

2019 Mileage Rate

2019 Mileage Rate

The 2019 mileage rate has finally been released by Inland Revenue. This is the rate which applies to the income year ended 31 March 2019.

Petrol or Diesel Engines

For petrol or diesel powered cars, the rate per kilometre is now 79 cents, up from 76 cents in 2018. This applies to mileage up to 14,000 kms in any given financial year. Inland Revenue refers to this as the Tier One rate. Over 14,000 kms, the rate has increased to 30 cents per km, up from 26 cents per km in 2018. This is the Tier Two rate.

Petrol Hybrid Engines

The Tier One rate is 79 cents per km, but the Tier Two rate is set at 19 cents per km.

Electric Engines

The Tier One rate is 79 cents per km, but the Tier Two rate is only 9 cents per km.

Reimbursing Employees

As an employer, these mileage rates are a very useful way of estimating costs that employees have incurred in using their personal vehicles for work related purposes. The rates include depreciation so no separate adjustment is allowed.

You should let your employees know that they need to keep a record of any business-related travel. A logbook is ideal.

Bear in mind that the two tiers relate to total kilometres travelled over the income year (1 April to 31 March). So if an employee uses their vehicle for a lot of personal travel, they may exceed 14,000 in any income year.

You can see more information on the kilometre rates for business use of vehicles on the Inland Revenue website by clicking on the link here.

Angus is the CEO and founder of Generate Accounting.