How Much to Pay a Driver Per Mile: IRS Rate, FLSA, and Costs

How much to pay a driver per mile in 2026 depends on the vehicle, the cargo, and who bears the operating costs: expect roughly $0.30 to $0.60 per mile for a local courier using a personal car, $0.50 to $0.75 per mile for a company truck driver, and $1.50 to $2.50 or more per mile for an owner-operator who covers fuel, insurance, and the truck itself. The IRS standard mileage rate for 2026, 72.5 cents per mile, is a tax benchmark rather than a pay requirement. Whatever rate you settle on has to clear federal minimum-wage law after the driver’s own vehicle costs are subtracted.

Typical Per-Mile Rates by Driver Type

There is no single correct number because the cost structure behind each category is different. Common 2025–2026 ranges look like this:

Company dry-van truck drivers: $0.50 to $0.65 per mile, with the carrier paying for fuel, insurance, and maintenance.
Company flatbed or refrigerated drivers: $0.55 to $0.75 per mile, reflecting extra skill and equipment demands.
Owner-operators: $1.50 to $2.50 or more per mile, because the rate has to cover fuel, insurance, truck payments, maintenance, and the driver’s own income.
Local delivery and courier drivers using a personal sedan or small van: $0.30 to $0.60 per mile. Per-mile operating costs on a light vehicle are far lower than on a heavy truck.
Hazardous materials haulers: a premium of $0.05 to $0.15 per mile above standard freight rates, tied to specialized licensing, higher insurance minimums, and added risk.

These figures move with diesel prices, regional labor conditions, and seasonal freight demand. A rate that works in a rural corridor may fall short in a metro area where fuel, tolls, and congestion add cost.

The 2026 IRS Standard Mileage Rate

For 2026, the IRS standard mileage rate for business use is 72.5 cents per mile, as published in Notice 2026-10. Of that, 35 cents per mile is treated as depreciation, which matters when the vehicle is later sold or traded.¹

This rate sets the ceiling for tax-free reimbursement under an accountable plan. It does not set the pay rate. An employer can pay more or less; the tax consequences shift depending on how the payment compares to the IRS figure.

The Minimum-Wage Floor Under the FLSA

Per-mile pay must still satisfy federal hourly wage law. Under the Fair Labor Standards Act, a nonexempt employee’s wages must be received “free and clear,” so any vehicle costs the employer requires the driver to absorb cannot pull the driver’s effective hourly earnings below the federal minimum wage of $7.25 per hour.² Many states set higher minimums, and the applicable floor is wherever the driver works.

A 2020 Department of Labor opinion letter applied this rule to drivers using personal vehicles. Fuel, maintenance, and insurance costs that primarily benefit the employer count against the driver’s wages for minimum-wage purposes. If subtracting those costs from the driver’s pay drops the effective hourly rate below minimum wage in any workweek, the employer has violated the FLSA.³

The math is straightforward. Take the driver’s gross weekly pay, subtract the vehicle costs they personally incurred that week, and divide by hours worked. If the result falls below the applicable minimum wage, the employer owes the difference. Violations can produce back pay plus an equal amount in liquidated damages.

Overtime and the Motor Carrier Exemption

Drivers operating vehicles over 10,000 pounds in interstate commerce are generally exempt from FLSA overtime under Section 13(b)(1). The exemption reaches drivers, driver’s helpers, loaders, and mechanics whose work affects the safe operation of commercial motor vehicles subject to Department of Transportation authority.⁴

There is a small-vehicle carve-out. When a driver’s work involves only vehicles weighing 10,000 pounds or less, the overtime exemption does not apply, and the driver is entitled to time-and-a-half for hours beyond 40 in a workweek.⁴ A courier in a sedan gets overtime that a long-haul trucker does not. Even when the overtime exemption applies, the minimum-wage rule still stands; only the overtime premium goes away.

Building a Rate From Real Vehicle Costs

A defensible rate starts with the actual cost of putting the vehicle on the road. For an owner-operator running a Class 8 truck, the main categories break down like this:

Fuel: with national on-highway diesel averaging roughly $3.81 per gallon in early 2026 and a heavy truck getting about 6 to 7 miles per gallon, fuel alone costs about $0.54 to $0.64 per mile.⁵
Insurance: federal law requires at least $750,000 in liability coverage for non-hazardous freight in vehicles rated above 10,000 pounds, with hazmat minimums of $1 million or $5 million depending on the substance. Premiums typically add $0.08 to $0.12 per mile when spread across annual mileage. Many shippers and brokers require $1 million or more even on non-hazardous loads.⁶⁷
Maintenance and repairs: tires, oil, brakes, and unplanned repairs average around $0.15 to $0.20 per mile on a well-maintained truck.
Depreciation: commercial vehicles depreciate over five years under MACRS. A $150,000 truck driven 100,000 miles per year works out to roughly $0.30 per mile over five years.⁸
Permits, licensing, and fees: IFTA fuel-tax reporting, commercial registration, and other regulatory costs add roughly $0.01 to $0.03 per mile.

Add the categories together and a heavy truck’s total operating cost commonly lands between $1.10 and $1.30 per mile before any driver compensation. A personal sedan or small van used for local deliveries usually runs $0.25 to $0.40 per mile, which is why the 72.5-cent IRS rate is a workable reference point for light-vehicle reimbursement.

Once the break-even cost is known, driver compensation goes on top. For company drivers whose employer owns and maintains the vehicle, per-mile pay is mostly labor. For owner-operators, the rate has to cover the full vehicle cost plus income, which is why their numbers run so much higher.

Fuel Surcharges

Many freight contracts split base per-mile pay from a fuel surcharge that adjusts as diesel prices move. The standard truckload formula is:

Fuel surcharge per mile = (current diesel price − baseline price) ÷ assumed fuel efficiency

The current price is typically pulled from the Energy Information Administration’s weekly on-highway diesel average.⁵ The baseline, the level below which no surcharge applies, is set in the contract and commonly falls between $1.25 and $1.50 per gallon. Assumed efficiency for a heavy truck runs 6.0 to 7.5 miles per gallon.

With diesel at $3.81, a baseline of $1.25, and 6.5 mpg, the surcharge comes to about $0.39 per mile, either added to the base rate or passed through separately. Writing a surcharge into the contract protects both sides from price swings that would otherwise make the agreed rate unsustainable.

Detention Pay and Other Accessorial Compensation

Per-mile pay only covers miles driven. When a driver waits at a dock or takes on extra work, other pay categories fill the gap:

Detention pay compensates the driver for wait time at pickup or delivery beyond a grace period, commonly two hours. Rates typically run $25 to $100 per hour for standard freight and higher for specialized or hazmat loads.
Layover pay is a flat daily rate when the driver has to wait overnight or longer between loads.
Stop-off pay is a flat fee for each extra stop beyond the origin and final destination.
Deadhead pay is a reduced per-mile rate for miles driven without cargo, such as repositioning to pick up the next load.

These need to be spelled out in the contract. A per-mile rate that looks generous can still shortchange a driver who regularly sits at facilities without detention pay.

Employee or Independent Contractor

Whether the driver is an employee or an independent contractor changes what you owe and how you pay it. Misclassification can produce back taxes, penalties, and liability for unpaid benefits.

The Department of Labor Test

The DOL uses an economic-reality test that turns on whether the driver is economically dependent on the company or genuinely running a business. Two factors carry the most weight. Control over the work asks whether the company dictates schedule, routes, and outside jobs; more control points toward employee status. Opportunity for profit or loss asks whether the driver can earn more or lose money based on business decisions like investing in equipment or hiring helpers, or whether earnings only change with hours worked.

Additional factors include whether the work requires specialized skills the company did not provide, whether the relationship is ongoing or project-based, and whether the driver’s work is integral to the company’s core operations.

The IRS Test

For tax purposes, the IRS weighs behavioral control, financial control, and the type of relationship. A driver who follows company instructions on when and how to make deliveries, uses company equipment, and receives a regular wage looks like an employee. A driver who sets their own methods, has unreimbursed business expenses, invests in a truck, and can profit or lose based on their decisions looks like a contractor.⁹ Employees receive a W-2 with taxes withheld; independent contractors receive Form 1099-NEC with no withholding.

Tax Treatment of the Mileage Payment

How per-mile payments are taxed depends on whether the employer uses an accountable plan. An accountable plan has three requirements:

Business connection: the expenses relate to work the driver performed for you.
Substantiation: the driver documents each trip’s mileage, date, destination, and business purpose within a reasonable time.
Return of excess: the driver returns any reimbursement exceeding substantiated expenses within a reasonable time.

Payments meeting all three are excluded from the driver’s gross income, do not appear as wages on the W-2, and are exempt from payroll taxes.¹⁰

When the reimbursement exceeds 72.5 cents per mile in 2026, the excess is taxable. The employer reports the amount up to the federal rate under code L in Box 12 of the W-2 (not taxable), and the overage goes into Box 1 as ordinary wages subject to income and payroll taxes.¹¹ If the arrangement fails the accountable-plan requirements, the full reimbursement becomes taxable wages.

Documenting Miles and Issuing Payment

For per-mile payments to qualify as tax-free reimbursements, the driver has to document each trip’s date, destination, mileage, and business purpose.¹¹ Most companies verify mileage through GPS software or electronic logging devices. Federal rules already require most commercial drivers in interstate commerce to use an ELD for hours-of-service compliance, so the mileage data is often collected anyway.¹²

For employee drivers, the accountable-plan portion stays off the W-2 while any excess over 72.5 cents per mile appears as taxable wages. For contractors, the full payment goes on Form 1099-NEC and the driver claims vehicle expenses on their own return. Keep trip logs, fuel receipts, maintenance invoices, and payment records for at least three years from the date the related tax return is filed.¹¹

No federal law sets a universal deadline for paying drivers, but many states require wage payments on a regular schedule, typically biweekly or semimonthly. Predictable payments help drivers cover ongoing fuel and maintenance without dipping into personal funds.

1
Internal Revenue Service. 2026 Standard Mileage Rates
2
Office of the Law Revision Counsel. 29 USC 206 – Minimum Wage
3
U.S. Department of Labor. WHD Opinion Letter FLSA2020-12
4
U.S. Department of Labor. Fact Sheet 19 – The Motor Carrier Exemption Under the Fair Labor Standards Act
5
U.S. Energy Information Administration. U.S. Gasoline and Diesel Retail Prices
6
eCFR. 49 CFR 387.9 – Financial Responsibility, Minimum Levels
7
Office of the Law Revision Counsel. 49 USC 31139 – Minimum Financial Responsibility for Transporting Property
8
Internal Revenue Service. 2025 Instructions for Form 4562 – Depreciation and Amortization
9
Internal Revenue Service. Employers Supplemental Tax Guide – Publication 15-A
10
eCFR. 26 CFR 1.62-2 – Reimbursements and Other Expense Allowance Arrangements
11
Internal Revenue Service. Publication 463 – Travel, Gift, and Car Expenses
12
Federal Motor Carrier Safety Administration. Department of Transportation Streamlines Vetting Process for Electronic Logging Devices