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.
Employer costs sit around 20%, 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.
*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.