Mileage rate reimbursements

The mileage rates for business use of vehicles for 2018-2019 income year are as follows

Petrol or Diesel vehicles
Tier One rate is 79 cents and Tier Two rate is 30 cents

Petrol Hybrid
Tier One rate is 79 cents and Tier Two rate is 19 cents

Electric
Tier One rate is 79 cents and Tier Two rate is 9 cents

The Tier one rates take into account your vehicle’s fixed and running cost, and should be used for the first 14,000 kilometres (this includes both business and private use) travelled in total by the vehicle in a year.

Tier Two rates takes into account the running costs only and should be used for any travel over 14,000 kilometres.

Those rates provide a very useful method of estimating costs that an employee has incurred using their vehicle for work related purposes.

You should let your employees know to keep a record of both their business related travel and a record when they reach the 14,000 km threshold over the income year (1 April to 31 March).

‍Source: IRD