Transportation Allowance for Employees in Lebanon (Decree No. 4021)

In response to rising fuel prices and increasing commuting costs, the Lebanese government has approved a new mechanism for calculating transportation allowances for employees. The decision (Decree No. 4021 of 14 October 2026 ) aims to provide fairer compensation and reduce the financial burden on workers who travel daily to their workplaces.

Key Changes in the New Decision

Under the new system, the daily transportation allowance will be linked directly to fuel prices rather than remaining a fixed amount. Employees will receive an allowance equivalent to the cost of five liters of gasoline for each working day. The allowance will be calculated monthly based on the average gasoline price during that month.

The approved mechanism[1] also sets:

• A minimum daily allowance of 500,000 Lebanese pounds (LBP).
• A maximum daily allowance of 800,000 LBP.

Why Was the Change Introduced?

Previously, employees received a fixed transportation allowance of 450,000 LBP per working day, regardless of fuel price fluctuations. As transportation costs continued to rise, workers and labor unions argued that the existing amount was no longer sufficient to cover daily commuting expenses.

The new approach creates a flexible system that automatically adjusts according to fuel prices, helping employees maintain their purchasing power and reducing the need for repeated government interventions.

Government Approval

The proposal was first endorsed by Lebanon’s Index Committee, which includes representatives of workers, employers, and the government. It was subsequently approved by the Lebanese Council of Ministers[2] as part of broader measures aimed at supporting workers amid inflation and economic challenges.

Expected Impact

The new transportation allowance is expected to:

• Help employees cope with rising fuel and transportation costs.
• Provide a fairer and more realistic compensation system.
• Improve income stability for workers in both the public and private sectors.
• Reduce the gap between transportation expenses and employee benefits.

The updated transportation allowance decision marks an important step in protecting Lebanese employees from the impact of fluctuating fuel prices. By linking the allowance to the cost of gasoline consumption, the government aims to ensure that transportation support reflects actual commuting expenses and offers more sustainable protection for workers in the future.

Decree No. 4021 of 14 October 2026 replaces the fixed daily transport allowance of LBP 450,000. The allowance is now the value of 5 liters of gasoline per day of actual attendance at the workplace. It can’t be less than LBP /500,000/ or more than LBP /800,000 /per day. The decree was published in Official Gazette No. 46 on 22 October 2026 and took effect the same day.

How the allowance is calculated

Daily allowance = 5 liters × the average official price per liter, with a minimum of LBP /500,000/ and a maximum of LBP /800,000/.

The Ministry of Energy and Water publishes prices per 20-litre tin, so 5 liters is a quarter of the tin price.

What employers need to do

• October 2026 payroll:
  • Pay for attendance days from 1 to 21 October at LBP /450,000/.
  • Pay attendance days from 22 October at the new rate, and never below LBP 500,000 or above LBP 800,000.
• Until the mechanism is published: pay at least the LBP /500,000/ minimum and be ready to pay the difference once the official rate is set. Some employers may choose to pay an estimate based on current fuel prices to reduce later adjustments.

What are the difficulties that the company will face regarding the transportation allowance decision

The company will face difficulties in calculating the transportation allowance for October because the transportation rate changed during the month: from LBP 450,000 from October 1 to 21 and LBP 800,000 from October 22 to 31.

1. How can the company calculate the transportation allowance?

• Before 22 October: Daily transportation cost was LBP 450,000.
• As of 22 October: Daily transportation cost increased to between LBP 500,000 and LBP 800,000.

Important: This calculation assumes the amounts are daily allowances and that the employee is entitled to the allowance for all 31 calendar days. If the allowance applies only to working days or actual attendance, the company must use the eligible days instead.

2. What difficulties will the company face?

• Budget increase: The daily allowance rises from LBP 450,000 to LBP 800,000, an increase of LBP 350,000, or approximately 77.8%.
• Payroll calculation: The company must divide October into two periods and apply the correct rate to each period.
• Fairness among employees: The company must determine whether all employees receive the same allowance or whether it varies according to their attendance or commuting needs.
• Implementation date: HR must ensure the new rate applies starting October 23, rather than applying it for the entire month.
• Budget planning: The company must assess whether the increased allowance is affordable and whether the same rate will continue in November.

Based on the attached Ministry of Energy and Water decision no 238[3] dated on 30/10/2026 , the average monthly price of a 20-litre can of 95-octane gasoline for October 2026 is: LBP /2,757,677/

As a sample, the calculation for October is as follows:

• Price per litre: 2,757,677 ÷ 20 = LBP 137,883.85
• The calculation should use the October gasoline price, rather than the September price.

New transportation allowance calculation under Decree No. 4021 dated 14 October 2026:

The decree, effective 22 October 2026, provides for five litres of gasoline per actual working day, subject to a minimum of LBP 500,000 and a maximum of LBP 800,000 per day.

Calculation:

(2,757,677/ 20 )*5 =689,419.25

October daily rate: LBP /689,500/

How to calculate October payroll :must be divided into two periods:

For each employee:

[ (450,000* D1)+(689,500*D2 )]

Where:

• D1 = actual attendance days from 1 to 21 October.
• D2 = actual attendance days from 22 to 31 October.

Example: An employee attended 15 days during the first period and 7 days during the second period.

If the October payroll has already been finalized, record the difference as a transportation adjustment in November, clearly identified as relating to October.

Sources:

• Decree No. 4021/2026, Official Gazette No. 46 (22/10/2026), p. 4457 — gazette page — https://494075.fs1.hubspotusercontent-na1.net/hubfs/494075/compliance-portal/decree-no-4021-adjustment-of-daily-transportation-allowance.pdf
• Ministry of Energy and Water, official fuel selling prices (LBP per 20 liters) — https://www.energyandwater.gov.lb/ar/prices?type=1

• CRS — Transportation Allowance Revised, 22 October 2026 

[1] Decree No. 4021/2026, Official Gazette No. 46 (22/10/2026), p. 4457 — gazette page — https://494075.fs1.hubspotusercontent-na1.net/hubfs/494075/compliance-portal/decree-no-4021-adjustment-of-daily-transportation-allowance.pdf

[2] Decree No. 4021/2026, Official Gazette No. 46 (22/10/2026), p. 4457 — gazette page — https://494075.fs1.hubspotusercontent-na1.net/hubfs/494075/compliance-portal/decree-no-4021-adjustment-of-daily-transportation-allowance.pdf

[3] Ministry of Energy and Water, official fuel selling prices (LBP per 20 liters) — https://www.energyandwater.gov.lb/ar/prices?type=1