Charging benefit value for employees activity days
What does the law state in regards to benefit value of company events that were held and financed by the employer?
Generally, in cases where the "best interests of the employer" overrides the "best interests of the employee", the employer will not charge any value from employees who participated in the activity.
This directive is intended to characterize the cases in which a company event will be seen as an activity that is for the best interests of the employer.
In cases where all of the following conditions are met, there will be no need to charge benefit value from employees:
- The workplace needs justify the conduction of activity days for employees. For example: Places that employ a great number of employees, places where teamwork is required, and so on.
- The decision to hold the event is of the employer and the relevant employees are invited to the event.
- The activity days are considered working days and full wages are paid for them.
- The employees are not entitled to bring a spouse or any relative to the event or a part of it.
- The activity takes place only during the working week. In cases where a part of the activity is conducted on the weekend and/or during vacations, the full value of the whole event must be charged.
- The schedule of the activity is determined or approved by the employer.
- The event takes place in Israel.
- The purpose of the event is to improve work relations between employees. Also, the event must include a professional lecture or an enrichment activity.
Additional clarifications and emphases:
- The employer must keep documentation of the above rules.
- The costs incurred by the employer are reasonable in relation to the activity and its purpose. For this purpose, costs that are considered reasonable are (as of today): 400 NIS per activity day without lodging or 700 NIS per activity day that include lodging.
- In any other case, where the activity day does not comply with the above rules, the benefit value must be charged.