Japan has no business mileage rate, and what it has instead

Update, April 2026: the UK approved rate for cars and vans rose from 45p to 55p a mile for the first 10,000 business miles. The 25p rate above that, and the 5p passenger payment, are unchanged. This post describes the position as it stood when it was written.

Every so often someone asks what Japan's equivalent of the 45p rate is. The honest answer is that there is not one, and the reason is more interesting than the absence.

There is no national per kilometre business rate

Japan's National Tax Agency does not publish a standard figure for reimbursing business driving in your own car. No cents per kilometre, no bands, no annual revision.

What a Japanese employee is paid for business driving is whatever their employer's internal rules say. Large employers publish a table. Smaller ones improvise. Two people doing identical work for different companies can be paid materially different amounts for the same journey, and both are correct, because there is no external figure either of them is measured against.

This is not an oversight. It reflects a system where the burden sits with the employer's own expense policy rather than with a national allowance.

What the tax agency does set

The figure the National Tax Agency publishes is a monthly ceiling on tax free commuting allowances, and it is a different animal in three ways.

It is about the commute, not business travel. It covers getting to work, which is precisely the journey Britain refuses to recognise.

It is monthly, not per distance. The ceiling is an amount per month, banded by the one way distance between home and work. Drive further, and the band you fall into allows a larger tax free monthly sum.

It is a ceiling, not an entitlement. It caps how much your employer can pay you free of tax. It does not oblige anyone to pay you anything.

There is also a floor that surprises people: journeys under a short threshold are taxable in full. A commute of a kilometre or two attracts no tax free allowance at all, on the reasoning that you could have walked.

Why this matters if you drive for work in Japan

The practical consequence is that your record has to do more work, not less.

Where a British driver logs distance and applies a published rate, a Japanese driver logs distance and applies their employer's rate. If the employer ever changes it, or if you move jobs, the rate changes with them and the historical claims keep the rate they were made under.

It also means the record is the only thing standing between you and a dispute. There is no national figure to appeal to. If your employer's policy says a rate and your log says a distance, the claim is the product of the two, and both halves need to be defensible.

The three systems, side by side

Setting your own rate

Milesheet ships schemes for the countries that publish a single national figure. Japan is not one of them, which is why the app asks you to enter the rate rather than offering one.

That is deliberate. Inventing a Japanese figure and printing it next to a total would be worse than useless: it would look authoritative and be wrong. The app records the distance either way, and the rate is a setting, because in Japan the rate genuinely is a setting.

Sources

• No.2585 マイカー・自転車通勤者の通勤手当 (National Tax Agency)
• § 5 Bundesreisekostengesetz, for the German comparison
• Travel, mileage and fuel rates and allowances (HMRC)

General information for drivers in Japan and the UK, not tax advice. Employer schemes vary: check yours, and check anything that matters with a tax professional.