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Does an Israeli employer have to pay a remote employee's home office costs such as internet and electricity?

No Israeli statute obliges an employer to reimburse home office costs, and no general extension order covers remote work. What the law does prohibit is shifting the employer’s own operating expenses onto the employee’s pay: Section 25 of the Wage Protection Law 5718-1958 lists the only lawful deductions, and equipment or utility costs are not among them. In practice the terms come from the employment contract or a hybrid work policy, and once agreed they bind the employer. The Notice to Employee (Employment Conditions) Law 5762-2002 requires any such allowance to appear in the written statement of employment terms.

Israeli labor law regulates working time, wages, and safety rather than the location of the desk, so the Hours of Work and Rest Law 5711-1951 and the duty to keep attendance records apply identically to an employee working from home. What the statute book does not contain is a reimbursement rule. A particular employer can still be bound through a personal contract, a collective agreement, or a settled workplace practice that the Labor Court treats as an implied term. Courts draw a line between a genuine reimbursement of documented expenses, which is not wages, and a fixed monthly sum paid regardless of actual cost, which can be characterised as wages and therefore counted into the base for severance pay and pension contributions.

That distinction usually matters more than the amount. An employer who pays a flat NIS 300 a month labelled as an internet allowance may find the sum counted into the severance base years later, while reimbursement against receipts generally is not. Employees should also check the travel allowance separately, because the extension order that funds public transport costs is tied to days the employee actually travels to the workplace, so a fully remote employee has no claim to it. Anything agreed about equipment, insurance of company property kept at home, and ownership of the laptop belongs in writing at the start of the arrangement. Our guide to remote work and employee rights in Israel covers hours, monitoring, and the hybrid policy checklist.

⚖ In Practice
  • Governing law: Section 25, Wage Protection Law 5718-1958; Notice to Employee (Employment Conditions) Law 5762-2002; Hours of Work and Rest Law 5711-1951
  • Competent authority: Regional Labor Court (Beit Din Ezori LaAvoda); the Labor Ministry’s enforcement arm handles unlawful wage deduction complaints
  • No statutory reimbursement: there is no law or extension order requiring payment of home internet, electricity, or equipment costs (2026)
  • Travel allowance: the transportation extension order applies only to days on which the employee actually travels to the workplace
  • Wages or expenses: a fixed allowance paid without receipts can be treated as wages and included in the severance and pension base
  • Documentation: the written employment statement must be given within 30 days of the start of employment and updated whenever terms change

From the full guide: Remote Work in Israel: Employee Rights and Employer Obligations

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Get a Free Consultation with Adv. Eli ShimonyPrepared under the direction of Adv. Eli Shimony, Eli Shimony Law Office · Editorial policy

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