Hello! It is the start of a new year which means the IRS has released their updated mileage reimbursement for 2025. As of January 1, 2025 the Federal Mileage Reimbursement rate is now 70 cents per mile. This is up from 67 cents per mile in 2024. Generally, the mileage reimbursement rate is updated once a year, however, it can be updated mid year if needed, as it was recently done in July of 2022.
The federal mileage reimbursement is meant to cover the cost of fuel, wear and tear and repairs on the nanny’s personal vehicle. It is not meant to cover additional car insurance premiums that may be required by the nanny’s insurance provider for using the vehicle for business. That is something that can (and should) be negotiated separately with your individual employer. It is standard for mileage to be reimbursed for all miles a nanny drives while working - including but not limited to: transporting the children to and from school, extracurricular activities, and any other errands required by the family. Commute mileage is not reimbursable.
Mileage reimbursements are not taxable.