Reimbursement of expenses for travel to and from work in the event of the change of residence
Expenses for travel to and from work are among the work-related expenses that employers must reimburse to workers under Article 130 of the Employment Relationships Act (“ZDR-1”). The collective agreements for specific sectors determine minimal amount of the expenses to the reimbursement of which the worker is entitled, and the Decree on the tax treatment of reimbursement of costs and other income from employment (Official Gazette of the Republic of Slovenia, no. 140/06 as amended, hereinafter “Decree”) determines the amounts up to which the reimbursement of expenses is not included in the tax base for the personal income tax of the worker.
In accordance with the third paragraph of Article 130 ZDR-1, if for reasons on the part of the worker, the expenses of travel to and from work subsequently increase, the worker shall be entitled to the reimbursement of the increased expenses for travel to and from work, if so stipulated in a branch collective agreement or if so agreed with the employer. It is clear from this provision that the worker cannot expect the reimbursement of expenses for travel to increase automatically just because he or she changed the actual place of residence (the situation would be different if, for example, the employer moved its offices and the post of the worker to another place). The right of the worker to higher expenses in the event of the change of residence has to be explicitly defined in the collective agreement or in worker’s employment contract. If the worker changes his or her residence after the conclusion of the employment contract and the new residence is closer to the working place than before the worker will be entitled to lower reimbursement of expenses for travel to and from work.
However, the place where the worker actually goes to work from is the relevant place to calculate the expenses for travel. For example, the Decree uses the term “actual residence” as (a permanent or temporary) residence of the worker that is the closest to the place of work. The second residence is taken into account as actual residence only if the worker drives to work from there at least four times a week. The regulations usually start from the assumption that every worker has the residence registered correctly in accordance with the Residence Registration Act (Official Gazette no. 52/16, ZPPreb-1) and that he or she has not registered as his or her residence the address where he or she actually does not reside.
At the time that the employment relationship is entered into, the worker’s address which the worker communicates to the employer before the employment relationship is entered into is taken into account as a place of residence. It is important that the employer draws the attention of the worker to the fact that the worker must inform the employer from which address he or she will actually come to work (if that address is different from the residence that has been communicated to the employer). For this reason, the change in expenses to which the worker is entitled may only be affected by the change of residence where he or she comes to work from, but not, for example, the change of permanent residence, where he or she does not come to work from. This viewpoint is also accepted in the case-law, which is a settled case-law in relation to these issues.
Authors: Jernej Jeraj, partner
Klemen Šuligoj, associate
