New IRD Kilometre Rates for 2024–25
Inland Revenue has released updated kilometre rates for the 2024–25 income year (1 April 2024 to 31 March 2025), affecting how businesses claim vehicle expenses and reimburse employees. Here's what you need to know.
What’s Changed?
For the first time, rates now differ by vehicle type: petrol, diesel, petrol -hybrid, and electric, reflecting rising fuel costs and maintenance expenses.
Applies retrospectively for the income year ending 31 March 2025
The New Rates (per km):
Why It Matters:
These rates impact tax deductions, and how businesses reimburse employee mileage.
Employers can reimburse up to these rates tax-free, provided it’s a “reasonable estimate of expenditure” but may choose to use blended averages if employee vehicle types are unknown
How to Apply the Rates:
Tier 1 (covers fixed + running costs): applies to total annual vehicle use or up to 14,000 km.
Tier 2 (running costs only): applies beyond 14,000 km.
If you don’t keep a logbook, Tier 1 applies up to 3,500 km, and Tier 2 thereafter
Click here to read more including examples on how to apply these rates
Source: Inland Revenue