diff --git a/src/libs/DistanceRequestUtils.ts b/src/libs/DistanceRequestUtils.ts
index fa98cf32ee39..d9b2c7137e43 100644
--- a/src/libs/DistanceRequestUtils.ts
+++ b/src/libs/DistanceRequestUtils.ts
@@ -128,6 +128,7 @@ function getRoundedDistanceInUnits(distanceInMeters: number, unit: Unit): string
  * @param currency The currency associated with the rate
  * @param translate Translate function
  * @param toLocaleDigit Function to convert to localized digit
+ * @param useShortFormUnit If true, the unit will be returned in short form (e.g., "mi", "km").
  * @returns A string that displays the rate used for expense calculation
  */
 function getRateForDisplay(
@@ -137,6 +138,7 @@ function getRateForDisplay(
     translate: LocaleContextProps['translate'],
     toLocaleDigit: LocaleContextProps['toLocaleDigit'],
     isOffline?: boolean,
+    useShortFormUnit?: boolean,
 ): string {
     if (isOffline && !rate) {
         return translate('iou.defaultRate');
@@ -146,11 +148,11 @@ function getRateForDisplay(
     }
 
     const singularDistanceUnit = unit === CONST.CUSTOM_UNITS.DISTANCE_UNIT_MILES ? translate('common.mile') : translate('common.kilometer');
-    const formattedRate = PolicyUtils.getUnitRateValue(toLocaleDigit, {rate});
+    const formattedRate = PolicyUtils.getUnitRateValue(toLocaleDigit, {rate}, useShortFormUnit);
     // eslint-disable-next-line @typescript-eslint/prefer-nullish-coalescing
     const currencySymbol = CurrencyUtils.getCurrencySymbol(currency) || `${currency} `;
 
-    return `${currencySymbol}${formattedRate} / ${singularDistanceUnit}`;
+    return `${currencySymbol}${formattedRate} / ${useShortFormUnit ? unit : singularDistanceUnit}`;
 }
 
 /**
@@ -159,14 +161,26 @@ function getRateForDisplay(
  * @param unit Unit that should be used to display the distance
  * @param rate Expensable amount allowed per unit
  * @param translate Translate function
+ * @param useShortFormUnit If true, the unit will be returned in short form (e.g., "mi", "km").
  * @returns A string that describes the distance traveled
  */
-function getDistanceForDisplay(hasRoute: boolean, distanceInMeters: number, unit: Unit | undefined, rate: number | undefined, translate: LocaleContextProps['translate']): string {
+function getDistanceForDisplay(
+    hasRoute: boolean,
+    distanceInMeters: number,
+    unit: Unit | undefined,
+    rate: number | undefined,
+    translate: LocaleContextProps['translate'],
+    useShortFormUnit?: boolean,
+): string {
     if (!hasRoute || !rate || !unit || !distanceInMeters) {
         return translate('iou.fieldPending');
     }
 
     const distanceInUnits = getRoundedDistanceInUnits(distanceInMeters, unit);
+    if (useShortFormUnit) {
+        return `${distanceInUnits} ${unit}`;
+    }
+
     const distanceUnit = unit === CONST.CUSTOM_UNITS.DISTANCE_UNIT_MILES ? translate('common.miles') : translate('common.kilometers');
     const singularDistanceUnit = unit === CONST.CUSTOM_UNITS.DISTANCE_UNIT_MILES ? translate('common.mile') : translate('common.kilometer');
     const unitString = distanceInUnits === '1' ? singularDistanceUnit : distanceUnit;
@@ -197,8 +211,8 @@ function getDistanceMerchant(
         return translate('iou.fieldPending');
     }
 
-    const distanceInUnits = getDistanceForDisplay(hasRoute, distanceInMeters, unit, rate, translate);
-    const ratePerUnit = getRateForDisplay(unit, rate, currency, translate, toLocaleDigit);
+    const distanceInUnits = getDistanceForDisplay(hasRoute, distanceInMeters, unit, rate, translate, true);
+    const ratePerUnit = getRateForDisplay(unit, rate, currency, translate, toLocaleDigit, undefined, true);
 
     return `${distanceInUnits} @ ${ratePerUnit}`;
 }
diff --git a/src/libs/PolicyUtils.ts b/src/libs/PolicyUtils.ts
index 3f3a2a96a1e1..d1a35587a501 100644
--- a/src/libs/PolicyUtils.ts
+++ b/src/libs/PolicyUtils.ts
@@ -137,16 +137,23 @@ function getCustomUnitRate(policy: OnyxEntry<Policy>, customUnitRateID: string):
     return distanceUnit?.rates[customUnitRateID];
 }
 
-function getRateDisplayValue(value: number, toLocaleDigit: (arg: string) => string): string {
+function getRateDisplayValue(value: number, toLocaleDigit: (arg: string) => string, withDecimals?: boolean): string {
     const numValue = getNumericValue(value, toLocaleDigit);
     if (Number.isNaN(numValue)) {
         return '';
     }
+
+    if (withDecimals) {
+        const decimalPart = numValue.toString().split('.')[1];
+        const fixedDecimalPoints = decimalPart.length > 2 && !decimalPart.endsWith('0') ? 3 : 2;
+        return Number(numValue).toFixed(fixedDecimalPoints).toString().replace('.', toLocaleDigit('.'));
+    }
+
     return numValue.toString().replace('.', toLocaleDigit('.')).substring(0, value.toString().length);
 }
 
-function getUnitRateValue(toLocaleDigit: (arg: string) => string, customUnitRate?: Rate) {
-    return getRateDisplayValue((customUnitRate?.rate ?? 0) / CONST.POLICY.CUSTOM_UNIT_RATE_BASE_OFFSET, toLocaleDigit);
+function getUnitRateValue(toLocaleDigit: (arg: string) => string, customUnitRate?: Rate, withDecimals?: boolean) {
+    return getRateDisplayValue((customUnitRate?.rate ?? 0) / CONST.POLICY.CUSTOM_UNIT_RATE_BASE_OFFSET, toLocaleDigit, withDecimals);
 }
 
 /**
@@ -993,6 +1000,7 @@ export {
     getTagLists,
     getTaxByID,
     getUnitRateValue,
+    getRateDisplayValue,
     goBackFromInvalidPolicy,
     hasAccountingConnections,
     hasSyncError,
diff --git a/tests/unit/PolicyUtilsTest.ts b/tests/unit/PolicyUtilsTest.ts
new file mode 100644
index 000000000000..8178bb99e877
--- /dev/null
+++ b/tests/unit/PolicyUtilsTest.ts
@@ -0,0 +1,48 @@
+import * as PolicyUtils from '@libs/PolicyUtils';
+
+function toLocaleDigitMock(dot: string): string {
+    return dot;
+}
+
+describe('PolicyUtils', () => {
+    describe('getRateDisplayValue', () => {
+        it('should return an empty string for NaN', () => {
+            const rate = PolicyUtils.getRateDisplayValue('invalid' as unknown as number, toLocaleDigitMock);
+            expect(rate).toEqual('');
+        });
+
+        describe('withDecimals = false', () => {
+            it('should return integer value as is', () => {
+                const rate = PolicyUtils.getRateDisplayValue(100, toLocaleDigitMock);
+                expect(rate).toEqual('100');
+            });
+
+            it('should return non-integer value as is', () => {
+                const rate = PolicyUtils.getRateDisplayValue(10.5, toLocaleDigitMock);
+                expect(rate).toEqual('10.5');
+            });
+        });
+
+        describe('withDecimals = true', () => {
+            it('should return integer value with 2 trailing zeros', () => {
+                const rate = PolicyUtils.getRateDisplayValue(10, toLocaleDigitMock, true);
+                expect(rate).toEqual('10.00');
+            });
+
+            it('should return non-integer value with up to 2 trailing zeros', () => {
+                const rate = PolicyUtils.getRateDisplayValue(10.5, toLocaleDigitMock, true);
+                expect(rate).toEqual('10.50');
+            });
+
+            it('should return non-integer value with 3 decimals as is', () => {
+                const rate = PolicyUtils.getRateDisplayValue(10.531, toLocaleDigitMock, true);
+                expect(rate).toEqual('10.531');
+            });
+
+            it('should return non-integer value with 3+ decimals cut to 3', () => {
+                const rate = PolicyUtils.getRateDisplayValue(10.531345, toLocaleDigitMock, true);
+                expect(rate).toEqual('10.531');
+            });
+        });
+    });
+});