To comply with Israeli tax regulations, employees must submit a complete expense report along with supporting documentation. Reimbursements will only be processed once the payroll and finance teams have reviewed and validated all required materials.
Expense Report Requirements:
Description of each expense
Business purpose or context
Trip report (for travel-related expenses)
Conversion rate used if the expense was not incurred in ILS
Supporting Documents:
Receipts or invoices for each expense
Mileage log (if applicable)
All receipts must be issued to the legal entity named in your employment contract
Which Expenses Are Considered Tax-Free?
The following expenses are generally not subject to income tax, provided that proper documentation is submitted:
1. Business Trip Expenses (separate report required for each trip):
Flights
Hotels (within approved ceiling)
Per diem (within approved limits)
Personal meals (only if no per diem is claimed)
Meals with clients
Local transportation
2. IT Equipment
Only if the invoice is addressed to the legal entity on your contract
3. Personal Car Use
Parking fees
Toll charges
4. Client Transportation
Transportation related to client meetings
Valid receipts required
5. Meals
Only reimbursed when incurred during approved business trips
Which Expenses Are Considered Taxable?
Some expenses are considered taxable and may reduce your net salary unless grossed up by the company:
1. Communication Costs:
Mobile phone bills
Home internet services
2. Personal Car Use:
Fuel costs
Mileage reimbursements based on kilometers
Which Taxable Expenses Must Be Grossed Up?
If reimbursed, these expenses must be grossed up to account for their tax impact:
Meals not related to business trips or outside of policy limits
Per diem or travel costs that exceed the approved ceiling
IT equipment not invoiced to the legal entity
Office supplies not invoiced to the legal entity
How Should Expenses Be Submitted?
Submit your complete expense report and all supporting documents using the Remote People platform.
Ensure all invoices are addressed to the legal entity stated in your employment contract.
Retain original receipts, as physical copies may be required for audits.
What Else Should I Be Aware Of?
Late or incomplete submissions may lead to delayed reimbursement or classification of the expense as taxable.
If an expense is considered taxable, it will either be deducted from your net salary or grossed up.