Oakland, CA – The California Workers’ Compensation Institute (CWCI) has announced that the mileage rate that workers’ compensation claims administrators pay injured workers for travel related to medical treatment or evaluation of their injuries will increase by 2.5 cents from 70.0 cents per mile to 72.5 cents per mile for travel on or after January 1, 2026, regardless of the date of injury. The current rate of 70.0 cents per mile will still apply for travel from January 1 through December 31, 2025.

California Labor Code §4600(e)(2), in conjunction with Government Code §19820 and DPA regulations, requires claims administrators to reimburse injured workers for medical mileage at the rate adopted by the Department of Personnel Administration (DPA) for non-represented (excluded) state employees, which is tied to the IRS published mileage rate.   

The IRS normally adjusts the standard mileage rate each fall for the next calendar year based on an annual study of the fixed and variable costs of operating an automobile. Although gas prices have declined in the second half of 2025, they either did not do so prior to the calculation of the latest increase, or the recent reductions failed to offset the increases from earlier this year. As a result, the standard mileage rate for miles driven on or after January 1, 2026 will increase to 72.5 cents per business mile driven. The IRS’s December 29 announcement of the mileage rate change (IR-2025-128) was issued via email but is expected to be posted shortly in the agency’s online newsroom at https://www.irs.gov/newsroom. 

The California Division of Workers’ Compensation is aware of the increase and will be posting a Newsline regarding the new mileage rate for travel on or after January 1, 2026 on its website, https://www.dir.ca.gov/dwc/dwc_newsline.html. In addition, the DWC has downloadable mileage-expense forms that show the applicable rates based on the travel date posted under “Medical Forms” on its website (click here).  

Given the upcoming New Year’s holiday and the short lead time, CWCI advises workers’ compensation claims administrators to alert their claims staff and programmers of the pending change. 

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