No higher than the heal of your hand, generally 2-4 inches. If using finely textured or double shredded mulch, use 1-2 inches because these materials allow less oxygen to the root zone.

Not against the trunk – keep all mulch 3-4 inches away from the trunk of the tree or shrub, allowing the root flare zone to show just above ground level.

To the tree’s drip line if possible. Remember that the drip line moves out as the tree grows.
 

Other Tips:
If a “fresh” look is desired each season, take some of the old mulch away before adding a new layer to reach the 2-4” depth. Just lightly raking the existing mulch can achieve a finished look. Applying new material over old in successive years is the same as applying a too deep layer all at once!Mulch Around Tree