Reimbursement of travel expenses to work: how much, for whom, and what to do when it isn’t paid

Service page: Payslip review by a lawyer and CPA.

The “travel” line on the payslip looks like a small detail, but it is a right set in an extension order that applies to every employer in the economy, not a “favor” the employer decides whether to give. Because the amounts are small each month, many employers skip it, pay a lump sum lower than what is owed, or stop paying without notice. In this article we explain what the Order says, exactly how much is owed, what is not counted, and what to do when it is not paid. More guides on wages and payslips are collected in the employment law hub.

The basis: the Extension Order on Employer Participation in Travel Expenses

The right is not set in a law but in the Extension Order on Employer Participation in Travel Expenses to and from Work, an order issued under the Collective Agreements Law, 5717-1957, which applied to all employees and employers in Israel a general collective agreement signed between the Coordinating Bureau of Economic Organizations and the Histadrut (General Federation of Labor). The current Order is dated 11 August 2016, and it set the current cap of NIS 22.60 per working day, in force since 1 February 2016 (until then the cap was NIS 26.40). These are the main provisions:

The Order sets a floor only. A collective agreement, a sector extension order (for example in the cleaning and security sectors) or a personal contract can improve on it, by paying above the cap, paying for days of absence or covering a private car, but they cannot reduce it.

Who is entitled: an “employee who needs transportation”

Entitlement depends on the need for transportation, not on actual use: an employee who comes in their own private car or by carpool is also entitled to the contribution, because they need transportation to get there. A common rule of thumb, which is not written in the Order, is that someone who lives less than about 500 meters from the workplace is treated, in most cases, as someone who does not need transportation, unless a health limitation prevents them from walking. Three situations in which there is no entitlement on those days: the employer provides organized transportation, the employee worked from home, or the employee was absent (illness, vacation, reserve duty). On working from home and what it changes in your rights, see remote work: legal aspects.

How much is owed: the formula and a numerical example

The employer pays the cheaper of two options: (a) the discounted public transportation fare from home to work and back, multiplied by the days actually worked, up to NIS 22.60 a day; or (b) the price of a monthly pass (a regional or national “Hofshi Hodshi” pass) that covers the trip. An employee who travels by private car is not entitled to more: they receive the value of the trip by public transportation, as if they had used it.

A hypothetical example: (by the cap in the Order, in force since 1 February 2016, as of 4 October 2026) an employee travels on two bus lines in each direction, and their daily round-trip fare is NIS 30. They worked 22 days in the month. The contribution is limited to the cap: 22 × 22.60 = NIS 497.20 a month. If a regional monthly pass that covers their trip costs less than NIS 497.20, the employer may pay the price of the pass instead. An employee who was absent that month for four sick days receives payment for 18 days only: 18 × 22.60 = NIS 406.80. When the reimbursement on the payslip is systematically lower than this calculation, the next step is checking employee rights with the employer for the whole period in which the gap built up.

Company car, private car and work-related travel

An employee who received a company car, or whom the employer drives to work, is not entitled to travel expenses: the car or the transportation is the transportation. An employee who uses their private car by choice is entitled only to the value of the trip by public transportation. Travel as part of the job (meetings at clients’ premises, travel between branches) is not “travel to and from work”, and the Order does not apply to it: its reimbursement is set in the employment agreement or in the employer’s procedure, usually by actual expense. It is worth setting this down in writing in the employment contract.

Tax, pension and severance pay

Travel expenses to work are treated as income for tax purposes: income tax, National Insurance contributions and health insurance contributions are deducted from them. On the other hand, they are not a wage component for calculating severance pay under the Severance Pay Law, 5723-1963, and they are not part of the base for pension contributions. Anyone calculating severance pay must leave the travel component out of the determining wage. This is what a payslip review by a lawyer and CPA looks like.

The employer does not pay: what do you do?

1. Check the payslip. The “travel” component must appear separately on the payslip. A wage “including travel” does not release the employer: if the travel expenses were not included on the payslip, there is a presumption that the wage paid does not include them, unless the employer proved otherwise (section 26B(c) of the Wage Protection Law, 5718-1958); and in any case a travel reimbursement is not counted toward the minimum wage (section 3(b) of the Minimum Wage Law, 5747-1987). A missing component, or an amount that stays the same even in months with long absences, justifies a check.
2. Calculate the debt. For each month: days actually worked × the daily contribution (up to NIS 22.60), or the price of the pass, minus what was paid. Attendance reports, payslips and your home address are enough.
3. Write to the employer with the calculation.
4. A claim in the Regional Labor Court, on your own or with representation. The procedure is relatively simple for low amounts, and you can claim up to seven years back under the Prescription Law, 5718-1958. A travel claim is usually joined to a claim for the other rights at the end of employment: recuperation pay, vacation, severance pay and overtime.
5. A complaint to the Regulation and Enforcement Administration (Ministry of Labor): a parallel route, especially suitable when the breach is systematic toward all the employees.

Frequently asked questions

I live 400 meters from my workplace: am I entitled to travel expenses?

As a rule, no. The Order entitles an “employee who needs transportation to get to their place of work”, and a common rule of thumb, which is not written in the Order, is that someone who lives less than about 500 meters from the workplace is treated, in most cases, as someone who does not need transportation. The exception: an employee who, because of a health or physical limitation, cannot walk that distance, and then transportation is needed even for a short distance. If the personal agreement or the collective agreement at the workplace is better, it prevails.

I worked from home for half a month: must the employer pay travel for the whole month?

No. Travel expenses are paid only for days on which the employee actually came to the workplace. Sick days, vacation, reserve duty or working from home are not counted. If you bought a monthly pass in agreement with the employer, the contribution is by the price of the pass even if you were absent on some of the days, so it is worth agreeing in writing in advance which route is paid.

I was dismissed: can I sue for travel expenses not paid in previous years?

Yes. The right does not end with the end of employment, and you can claim it in the Regional Labor Court up to seven years back under the Prescription Law, 5718-1958. The calculation is done month by month: the days actually worked multiplied by the daily contribution that was not paid, up to the cap that was in force in that period. The payslips, the attendance reports and your home address are the main evidence.