Are employees in Israel entitled to a travel (transportation) allowance?

Travel reimbursement in Israel does not come from a single named statute but from a general extension order (tzav harchava) made under the Collective Agreements Law 5717-1957. An extension order takes a sectoral collective agreement and gives it the force of law across the whole economy, so the travel order binds essentially every private-sector employer. It obliges the employer to cover the cost an employee reasonably incurs to commute by public transport between home and the workplace. The amount is the lower of the actual public-transport fare and a daily ceiling that the government updates periodically. Where a monthly travel pass would be cheaper than daily tickets, the order is read to cap the entitlement at the monthly pass price.

Several practical points matter for foreign employees and the companies that hire them. The entitlement is owed only where the employee actually needs transport to reach work, so it does not apply if the employer provides organised transport or the employee lives within easy walking distance. It is a reimbursement of a cost, not a bonus, and it is commonly shown as a separate line on the tlush sachar (pay slip). Because the right flows from an extension order, it cannot be contracted away, and an employee who was never paid it can claim the shortfall in the Regional Labor Court within the seven-year limitation period. Our guide to employment contracts in Israel for foreign workers sets out the other mandatory pay components.

From the full guide: Employment Contracts in Israel for Foreign Workers and Expats

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