The IRD’s mileage rates for the 2017 income year for vehicles with business travel of 5,000 or less in an income year have been set as follows:
- Petrol vehicles – 73 cents/km
- Diesel vehicles – 73 cents/km
- Hybrid vehicles – 73 cents/km
- Electric vehicles – 81 cents/km
Taxpayers can choose to use the IRD’s mileage rates or use actual costs if they consider that the IRD’s mileage rates do not reflect their true costs. Sufficient records need to be kept to support actual costs claimed.
Employers can choose to use the mileage rates as a reasonable estimate of costs when they reimburse employees for the use of their private vehicle for business related travel. Employers can also choose to use an alternative estimate from a reputable source such as the NZ Automobile Association.
For the 2018 income year onwards, the IRD has made changes to its mileage rates. Specifically, the 5,000km limit will be removed and a new two-tier mileage rate calculation will apply. The IRD is yet to publish the mileage rates for this new two-tier system.
Is this rate for all vehicles size vehicles
Hi Rhonda – yes the mileage rate applies to all sizes of vehicles, however the mileage rate does not apply to motorcycles.
how much per km if own truck used GVM 9200 kg
Hi Rodney – The IRD’s mileage rates apply up to 31 March 2018 and have no limit on the size of the vehicle that the rate can be applied to.
From 1 April 2018 the IRD’s mileage rates are being replaced with ‘Kilometre rates’. We are still waiting for the IRD to release what the Kilometre rates will be and the size of vehicles they will apply to. IRD’s website currently refers to ‘average vehicle’ – “The kilometre rates will be set by reference to industry figures and based on the average per kilometre cost for the average vehicle. A draft statement will be released for consultation later this year. More information will be provided once the rates are available.” Here is the link to IRD’s page on this topic http://www.ird.govt.nz/business-income-tax/expenses/mileage-rates/
does the mileage rate cover all vehicle expenses for the year, such as garage service/repair bills, registration, WOF, insurance etc ?
Hi Frankie – Yes it does. It is based on all running costs, including repairs and maintenance, purchase price and fuel.
Has this increased for Auckland given the huge petrol tax we have now received?
The IRD’s mileage rates have not been increased for the new Auckland fuel tax. However a couple of weeks ago the IRD finally released the new kilometre rates which replace the mileage rates for the 2018 income year onwards. The kilometre rates are based on a two-tier method with the first tier applying for the first 14,000kms and the second tier to the kilometres in excess of 14,000kms. The rates are below:
2017/2018 Kilometre Rates
Petrol or Diesel
Tier One rate 76 cents Tier Two rate 26 cents
Tier One rate 76 cents Tier Two rate 18 cents
Tier One rate 76 cents Tier Two rate 9 cents