The public transportation reform, which was implemented on August 1, 2022, affects all employers who reimburse their employees for travel expenses according to public transportation rates. The reform also affects people who use public transport but not necessarily for work.

Since the transportation reform program (“Derech Shaveh”) changed both the single trip rate and the “monthly free” חופשי חודשי subscription rate, it directly affects the amounts that employers will pay to employees as travel expense reimbursements.

There are two main relevant changes:

The first change is in the “monthly free” tickets חופשי חודשי.

From now on, there are only 2 types of “monthly free” subscriptions:

1. “Free nationally”- חפשי ארצי (throughout Israel, except for Eilat, up to a distance of 225 kilometers). The subscription cost is NIS 225. A distance greater than 225 kilometers will cost NIS 610 for a monthly national subscription.

2. “Zone 1 free” – ,חופשי אזור 1 a cheaper monthly subscription that is intended to benefit the residents of localities outside the major metropolises of Tel Aviv, Haifa and Jerusalem. It is valid anywhere that is not in those three major metropolises (zone 1 on the map) and allows unlimited travel up to 40 km within the area, at a fixed cost of NIS 99.

There is no regional monthly free ‘חופשי חודש’ subscription within the major metropolises of Tel Aviv, Haifa and Jerusalem, so anyone traveling in these cities must purchase the national monthly free subscription.

The second main change is the cost of a trip.

The second change is the cost of a single trip. From now on, the price of a single trip on public transportation is uniform throughout the country and is determined according to the distance between the starting point and the destination. That is, a single ticket for each direction costs according to the distance traveled (5.5 NIS / 12 NIS / 16 NIS / 27 NIS / 68.5 NIS).

For more information, check the “Derech Shaveh” website, which also provides a calculator to check out the cheapest way to travel. The website is in English.

Other aspects of the reform that affect the payment of travel reimbursements:

1. Populations entitled to a 50% discount: teenagers, women and senior citizens (women from age 62 and men from age 67) up to age 75, people with disabilities and recipients of income support. The employer’s participation in travel expenses for these groups is according to the discounted rate that applies to the employee.

2. From now on, people over the age of 75 will be entitled to travel for free, on all means of public transportation. Therefore, an employer who employs someone over the age of 75 is exempt from reimbursing travel expenses (unless there is a personal or collective agreement that states otherwise).

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