Pastors log countless miles for ministry: hospital visits, counseling, meetings, conferences, and more. Because it’s so routine, mileage reimbursement is often overlooked or handled casually. Some churches add “extra pay” for gas or reimburse miles without documentation, not realizing those shortcuts can trigger tax issues.

The good news? When handled correctly, pastor mileage reimbursement is simple, compliant, and completely non-taxable.

TL;DR: Pastor mileage reimbursement allows churches to repay pastors and clergy for ministry-related driving using the IRS standard mileage rate. When mileage is reimbursed under an accountable plan and supported by proper documentation, it is not taxable income. Mileage should never be paid through payroll or added to salary. Using a simple mileage reimbursement form helps churches stay organized and compliant.

What Is Pastor Mileage Reimbursement?

Pastor mileage reimbursement is the process of repaying a pastor for using their personal vehicle for ministry-related purposes. Because the pastor is incurring an expense on behalf of the church, the reimbursement is considered a ministry expense rather than compensation. This distinction is important because reimbursement is not income, while compensation is taxable.

Problems arise when churches attempt to “estimate” mileage and add a flat amount to a pastor’s pay to cover fuel costs. In those cases, the payment becomes taxable wages, even if it was intended to help with ministry travel. Reimbursement must be tied to actual mileage driven for ministry purposes.

Is Mileage Reimbursement Taxable for Pastors?

Mileage reimbursement is not taxable to the pastor or clergy when it is paid correctly. To remain non-taxable, the reimbursement must be made under an accountable plan, must relate to legitimate ministry activity, and must be supported by adequate documentation. The reimbursement also cannot exceed the IRS mileage rate.

Mileage becomes taxable when it is paid without documentation, run through payroll, added to salary, or reimbursed for non-ministry travel such as commuting.

Keeping mileage reimbursement separate from payroll is one of the most important compliance steps a church can take.

The IRS Mileage Rate [2026]

Each year, the IRS publishes standard mileage rates to reflect the average cost of operating a personal vehicle. These rates are designed to account for fuel, maintenance, insurance, depreciation, and other vehicle-related expenses. Churches should always use the IRS mileage rate rather than creating their own custom rate, as this provides a clear and compliant standard for reimbursement.

For 2026, the IRS announced an update to the mileage rates on December 29. The standard mileage rate for business miles increased by 2.5 cents per mile, while the rate for medical miles decreased slightly by half a cent. The charitable mileage rate remains unchanged.

For ministry purposes, churches should use the business mileage rate, which is 72.5 cents per mile for 2026. The IRS mileage rate for medical travel is 20.5 cents per mile, and the rate for charitable mileage is 14 cents per mile.

The increase in the 2026 business mileage rate reflects rising transportation costs across the board. Fuel prices have remained volatile, vehicle maintenance and repair expenses continue to climb, and insurance premiums and financing costs are significantly higher than they were just a few years ago. When these factors are combined with ongoing increases in vehicle depreciation, the IRS determined that a higher mileage rate was necessary to better reflect what drivers are actually spending out of pocket. In short, the 2026 increase is intended to keep mileage reimbursement aligned with the true cost of driving for work-related purposes.

Churches should review the IRS mileage rate each year and ensure their reimbursement practices are updated accordingly. Using the current IRS rate helps maintain consistency, fairness, and compliance for both the church and the pastor.

What Counts as Ministry-Related Mileage?

Ministry-related mileage generally includes travel that would not have occurred if the pastor were not performing their pastoral duties. This often includes trips for hospital visits, counseling appointments, staff meetings held away from the office, conferences, training events, and other ministry responsibilities.

Mileage for commuting from home to the church office is not considered ministry-related and should not be reimbursed. Likewise, personal errands or mixed-use trips should only be reimbursed for the portion that is clearly related to ministry.

Accountable Plans: The Right Way to Reimburse Mileage

An accountable plan is the IRS-approved method for reimbursing expenses without creating taxable income. Under an accountable plan, expenses must have a ministry purpose, be properly documented, and be reimbursed within a reasonable time.

Most churches already follow these principles informally, but documenting and consistently following an accountable plan helps protect both the church and the pastor. Mileage reimbursement fits naturally within an accountable plan when proper records are maintained.

What Documentation Is Required?

Proper documentation is what separates reimbursement from taxable income. For mileage reimbursement, documentation should include the date of travel, where the trip started and ended, the ministry purpose of the trip, and the number of miles driven.

This information does not need to be complicated, but it does need to be complete. Clear documentation ensures that reimbursement remains non-taxable and provides support if the church is ever audited.

Pastor Mileage Reimbursement Form [Included]

To make documentation easy, many churches use a simple mileage reimbursement form. The included form allows pastors to record their ministry-related trips, calculate reimbursement using the IRS mileage rate, and certify that the information is accurate.

Most churches collect mileage reimbursement forms monthly, though some choose quarterly reimbursement. Consistency matters more than frequency, as long as reimbursements are timely.

👉 Download the Pastor Mileage Reimbursement Form (Word Doc)

How Churches Should Record Mileage Reimbursement

Mileage reimbursement should be recorded as a ministry or travel expense in the church’s accounting records. It should never be recorded as payroll or compensation. Keeping mileage reimbursements categorized correctly helps maintain clean financial reports and avoids confusion during year-end reporting.

Using consistent expense categories also makes it easier for treasurers and finance teams to review spending and ensure policies are being followed. 

Common Mileage Reimbursement Mistakes Churches Make

Each of these mistakes can turn a non-taxable reimbursement into taxable income:

• Paying mileage reimbursement through payroll instead of under an accountable plan
• Reimbursing commuting miles (home to church), which are not eligible
• Skipping proper documentation or mileage logs
• Failing to update mileage rates when the IRS changes them
• Treating mileage reimbursement as extra compensation rather than a true reimbursement

Mileage Reimbursement Done Right

Pastor mileage reimbursement doesn’t have to be complicated or risky. When churches follow IRS guidelines, use the standard mileage rate, and require simple documentation, reimbursement remains non-taxable and stress-free for everyone involved.

A consistent, accountable approach protects both the church and the pastor—while honoring the ministry work that happens every mile along the way.

FAQs: Pastor Mileage Reimbursement

Can pastors receive mileage reimbursement if they have a housing allowance?

Yes. Mileage reimbursement is separate from housing allowance and does not affect it.

Can mileage be reimbursed retroactively?

Only if proper documentation exists and reimbursement is made within a reasonable time.

Is an accountable plan required?

Yes, if the church wants mileage reimbursement to remain non-taxable.

Should volunteers be reimbursed for mileage?

Yes, volunteers may also be reimbursed using the same accountable plan rules.

Financial Disclaimer: This article is provided for informational purposes only and does not constitute professional accounting, tax, or financial advice. Church tax laws are complex and subject to change based on federal, state, and denominational regulations. ChurchTrac is a software provider, not a CPA firm. We strongly recommend consulting with a qualified tax professional or certified public accountant before making financial decisions or filing tax-related documents for your ministry.

Rebecca Church Engagement