Public Transportation Reform in Israel: Implications for Employee

On April 25, 2025, the public transportation fares were updated in the second phase of the “transportation justice” reform. The new fares may affect the rate of reimbursement of employees’ travel expenses.

What are the updated rates?

The public transportation fares were updated on 25.4.2025, such that a single trip fare increased by ILS 2, and the “daily pass” and “monthly pass” fares were updated proportionally.

Concurrent with the hike in fares, the second phase of the “transportation justice” reform expands eligibility for benefits. For example: senior citizens are entitled to travel for free on public transportation as of age 67 (instead of 75 and older up until 25.4.2025), and young people and residents of peripheral regions who purchase “monthly pass” subscriptions are entitled to additional benefits.

Does the reform affect the prices of the “daily pass” and “monthly pass” subscriptions?

Yes. The “daily pass” and “monthly pass” subscription rates were updated proportionally.

Has the statutory rate of travel expenses to and from work changed?

The reform does not change employers’ obligation to reimburse their employees’ travel expenses, and does not affect the maximum reimbursement rate that employers are obligated to pay. Employees are entitled to reimbursements of their travel expenses from their employers at the rate of up to ILS 22.60 per day or according to the daily cost of a “daily pass” or “monthly pass” subscription from the employee’s place of residence to the workplace, whichever is the lower, provided that a higher rate of reimbursement is not specified in an agreement or other arrangement between the employer and the employee.

What are the reform’s implications for employers in the economy?

The reform’s hike in public transportation fares, including for individual trips and for “daily pass” and “monthly pass” subscribers, may lead to an actual update of employees’ travel expenses. We therefore recommend that employers should review the travel costs for each employee, according to the employee’s relevant travel route.

Furthermore, some employees may be eligible for new benefits or discounts in transportation fares (depending upon their age or place of residence), which could affect the actual reimbursement sum.

How do we know if the payment arrangement applying to employees has been changed?

We recommend reviewing the reform’s details and using the calculation tools provided on the “Transportation Justice” reform webpage.

When do employers have to update the travel reimbursements?

The new public transportation fares came into effect on April 25, 2025. 

Do employers have to pay travel expenses for days when employees are absent?

Eligibility for travel reimbursement is for physical arrival at the workplace (and not for vacation days, sick days or working from home). Employees who are entitled to organized transportation or a company car are not entitled to travel reimbursements.

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Adv. Noemie Amar is an associate in our firm’s labor law department.

Barnea Jaffa Lande’s labor law department, which is ranked annually by international and local legal directories, has extensive experience in providing comprehensive high-quality legal advice to local and international employers on a variety of complex issues and is at your service.