Last Updated on February 18, 2015

Employee travel allowance and reimbursement to and from the workplace in Israel.

By: Binyamin Radomsky, CPA

The Right to a Travel Allowance – Israel Labor Laws

Many Olim do not know their basic employment rights – it is the right of every employee in Israel, to receive a travel allowance.

Israeli labor laws require that an employer reimburses their employees for the cost of travel to and from work. The travel allowance rate to be paid is the cost of a bus trip, or a monthly travel-card (using Rav Kav) if that is cheaper. The law caps the amount that the employer is required to pay at NIS 26.40 (correct as at September 2021) per day, although it is of course permissible for an employer to pay more than these amounts.

It is important to note that it is irrelevant how the employee chooses to travel – the requirement to pay is based on an assumption that the employee will use the cheapest public transport available, even if they choose to drive into work. In the event that an employee does not require public transportation in order to get to work (i.e. they live very close to their place of work), they are not entitled to any such payment. Furthermore, anyone who has transport provided to them by an employee (e.g. a company car or shuttle service) is not entitled to these payments. One final point – from a tax perspective these payments are considered a benefit provided by an employer, and hence are subject to both Income Tax and Bituach Leumi.

Some useful Hebrew words for the workplace