Israel
Min. wage
(x12 payments)
₪6,443.85 /mo
About the minimum wage
Employer tax
~4.5-7.6%+
Understand employer tax
Annual leave
12 days
Learn about annual leave
Notice period
1 month min
Termination and notice info
Updated
Sep 2026
The default and most common employment arrangement in Israel, with no fixed end date. Indefinite employees accrue full statutory rights (notice, severance, annual/sick leave) based on continuous years of service and can only be dismissed following a fair process, including a pre-termination hearing.
Fixed-term contracts are legal with no general statutory maximum duration, but repeated renewals or successive fixed-term contracts used to avoid granting permanent status can be reclassified by labor courts as indefinite employment. On lawful non-renewal at the agreed end date, notice/hearing obligations are generally reduced, but severance still accrues for service of one year or more.
Under the Hours of Work and Rest Law, standard hours are capped at 42/week (8 hours/day over 5 days, or shorter days over 6 days), with a mandatory weekly rest period of at least 36 consecutive hours generally including the Jewish Sabbath (or another day for non-Jewish employees). Overtime is paid at 125% for the first 2 daily hours and 150% thereafter, capped at 4 hours/day and 16 hours/week. A move to a 40-hour standard week has been publicly discussed but was not enacted as of August 2026.
Israeli law does not set a general legal maximum or minimum probation length for private-sector hires. Employees are protected from day one, including the right to a hearing before dismissal, even while on probation. Separate statutory waiting periods apply to specific entitlements (e.g., new employees typically become eligible for mandatory pension contributions after 3–6 months, or immediately if they had pension coverage with a prior employer).
Israel has no statutory 13th or 14th month salary. However, employees with at least one year of service are entitled to statutory annual "recuperation pay" (Dmei Havra'a), a fixed per-day allowance (set annually by government/collective agreement, several hundred NIS per day) scaled by tenure and typically paid in a lump sum, most commonly between July and September.
Israel does not broadly regulate job titles for private-sector employment. However, certain licensed or regulated professions (e.g., lawyer, accountant, engineer, physician, pharmacist) require use of protected titles tied to professional licensing/registration bodies, and misuse can carry legal consequences.
Combined mandatory employer on-costs (excluding fixed shekel allowances) can reach roughly 22.43% of gross salary for employees earning above the reduced-rate National Insurance threshold: National Insurance ~7.6% (or ~4.51% on the lower salary band), mandatory pension minimum 6.5%, and severance/pension fund contribution 6%–8.33% (often combined under a Section 14 arrangement). Additional small fixed statutory items (recuperation pay, travel reimbursement) further increase total employer cost, generally to roughly 20%–30% above gross salary.
Combined mandatory employee deductions can reach roughly 18% of gross salary above the reduced-rate threshold: National Insurance 0.4% (or 7% above the threshold), health tax 3.1% (or 5% above the threshold), and mandatory employee pension contribution of at least 6%. Progressive income tax (up to 47%, plus a 3% surtax on very high earners) is withheld separately (PAYE/Mas Hachnasa).
In addition to statutory leave, employees are entitled to the following statutory benefits:
Israel's social security system is administered by the National Insurance Institute (Bituach Leumi) and funded through tiered employer and employee contributions, plus a separate employee-only health tax.
Work-related injury and occupational illness coverage in Israel is provided through the National Insurance Institute's Employment Injury Insurance branch, funded as part of standard employer National Insurance contributions rather than a separate private policy.
Employees who suffer a work injury or occupational disease are entitled to an injury allowance (a percentage of their average wage) during recovery, medical treatment coverage, and, where relevant, a disability pension or lump-sum grant based on the assessed degree of permanent disability. Employers are also expected to comply with general workplace safety obligations under Israeli labor law, and additional employer liability insurance is common commercial practice even though the statutory benefit itself is state-funded.
Under the Severance Pay Law, 5723-1963, employees with at least one continuous year of service are generally entitled to statutory severance pay equal to one month's salary (at the final wage rate) for each year of service, prorated for partial years, upon dismissal or in other statutorily protected circumstances (e.g., resignation due to health, relocation for a spouse's job, or resignation shortly after childbirth).
In practice, most employers fund this obligation on an ongoing basis through monthly contributions of approximately 8.33% of salary into a pension/severance fund. Where the employer adopts a "Section 14" arrangement (via collective agreement or ministerial approval), these monthly deposits fully discharge the statutory severance obligation and the accumulated fund is released to the employee upon termination of employment, generally regardless of whether the employee resigned or was dismissed.
Israel has no legally mandated 13th or 14th month salary/bonus.
Employees with at least one year of tenure are, however, entitled to a separate statutory annual payment known as recuperation pay (Dmei Havra'a), a fixed daily allowance set by the state/collective agreements and scaled by years of service and days worked, typically paid once a year (commonly between July and September). Some employers may also pay discretionary bonuses, but these are not a statutory requirement.
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Your employee's hours, time off, holidays, bonuses, and commissions are automatically calculated into payroll. RemoFirst will invoice you in either US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), Australian Dollars (AUD), or Singapore Dollars (SGD) around the 15th of each month to make sure your employees are paid on time. To make it even easier, you can summarize your entire global team's salaries to aggregate them into one payment (instead of many individual payments).
Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.
Whenever the employee or employer has a question about, or anything else related to international employment, they can speak with our customer support team to get answers from our team of experts.
