Israel offers a deep, innovation-driven talent market with mandatory pension and a distinctive severance system. All-in employer cost runs around 1.2x the gross salary. Here is what to know before your first Israeli hire.
Employment runs under a set of protective statutes plus extension orders that apply collective terms broadly. Mandatory pension and severance provisions, plus recuperation pay, shape the employer cost.
The statutory minimum is about ILS 5,880 per month in 2024*, updated periodically.
Monthly payroll, with an annual recuperation payment (dmei havraa) and travel allowance common by extension order.
Around 9 paid public holidays tied to the Jewish calendar, with variations for other communities.
Written terms are required within 30 days. Probation length is set by contract, and pension enrolment begins early in the employment.
Employer costs sit around 19%, combining National Insurance, mandatory pension, and the severance-fund provision.
Employers fund a pension (6.5%) and set aside 8.33% for severance, usually through the pension arrangement, so severance is largely pre-funded.
Employees pay income tax, National Insurance, and health tax, withheld at source, plus their pension share. Withholding is the employer's responsibility, which under EOR means ours.
From 12 up to around 28 days a year depending on tenure, plus the annual recuperation days.
Around 15 weeks of maternity leave with a National Insurance benefit, extendable unpaid.
Accrues at 1.5 days per month, paid on a rising scale from the second day of illness.
Paid leave exists for reserve military duty and certain life events.
A dismissal hearing is required, and notice runs from a day up to a month by tenure.
Severance of about a month's pay per year of service is due, largely covered by the pre-funded severance component.
Set by contract; protections and a hearing still apply to dismissals.
A contractor found to be an employee in substance can claim retroactive employee rights, including severance and social benefits.
*All figures are estimates from public sources (2025-26), pending ops verification - same basis as the EOR cost calculator. Not tax or legal advice.
Compliant Israeli employment contract, payroll, National Insurance, pension, and severance, handled. One invoice, flat $399 per month.