Employer of Record (EOR) in
Palestine
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Here's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in Palestine to stay compliant from day one.
Language(s)
Currency
Capital
Ramallah
Population
5.7 M
Public holidays
9
VAT
16%
Here's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in Palestine to stay compliant from day one.
DEFAULT
Indefinite contract
The default and most common contract type in Palestine. It has no fixed end date and continues until terminated by either party in accordance with the Labour Law (valid grounds, statutory notice, and applicable end-of-service severance). Indefinite-contract employees receive the full range of statutory protections, including severance and arbitrary-dismissal compensation.
Fixed-term contracts specify a defined start and end date, or are tied to completion of a specific project or task. They expire automatically at the end date without requiring notice or severance, though they may be renewed. Repeated back-to-back renewals can risk the relationship being treated as indefinite for employee-protection purposes.
Here's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in Palestine to stay compliant from day one.
Standard working time is capped at 45 hours per week (Article 68), typically distributed as roughly 8 hours/day over 5-6 days, with Friday commonly treated as the weekly rest day. Employees may not work more than 5 consecutive hours without a break, and daily breaks must total no more than 1 hour (Article 70). Overtime is capped at 12 hours per week and paid at 150% of the normal hourly wage (Article 71); night and hazardous work carry a reduced daily-hours threshold (Article 69).
PROBATION PERIOD
3 months max
Article 29 permits one probationary period of up to 3 months per employer; it may be extended once for the same duration (so up to roughly 6 months total) but not repeated indefinitely with the same employer. Either party may end the employment relationship during probation without notice or severance.
13TH / 14TH SALARY
Not Required
Palestinian Labour Law does not mandate a 13th or 14th month payment. Any extra bonus (e.g., around Eid holidays or year-end) is discretionary, based on company policy or a collective bargaining agreement, not a statutory entitlement.
JOB TITLE REGULATIONS
Regulated
Palestinian Labour Law does not prescribe a formal job-title classification or licensing scheme for private-sector roles generally (beyond sector-specific professional licensing, e.g., doctors, lawyers, engineers). Written employment contracts (Article 16) must state the employee's job title/nature of work, wage, and working hours; contracts are typically drafted in Arabic, the official language of the Palestinian Authority.
Here's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in Palestine to stay compliant from day one.
Currently 0% of gross salary — no mandatory social-security-style payroll contribution is collected from employers. Under the suspended 2016/2023-draft Social Security Law, the intended employer rate was 9.8% of wages (covering old-age/end-of-service pension, work injury, and other branches), up from an original 9% proposal, but the law has never taken effect. Employers' de facto equivalent costs are the direct end-of-service severance accrual (~1 month wage per year of service) and privately purchased work-injury insurance.
Currently 0% of gross salary — no social security deduction is withheld from employee pay. Under the suspended/draft Social Security Law the intended employee rate was 6.2% of wages (revised down from an original 7% proposal). Employees are instead subject only to progressive personal income tax withheld under PAYE: 5% on annual income up to ILS 75,000, 10% from ILS 75,001-150,000, and 15% above ILS 150,000 (Income Tax Law No. 8 of 2011).
Figures reflect the Palestinian Labour Law No. 7 of 2000 and related tax law as applied in the West Bank under Palestinian Authority jurisdiction; payroll figures are shown in Israeli new shekels (ILS), the dominant practical settlement currency, though the Jordanian dinar is also used in parts of the West Bank. Gaza Strip administration, enforcement, and practical payroll conditions differ materially and are not covered by these figures. The Palestinian Social Security Law remains suspended/unimplemented as of 2026, so social-security figures represent the current 0% enforcement reality plus the on-paper (not-in-force) draft rates. Employers should confirm current requirements with local counsel or a payroll specialist before acting.
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Calculate your EOR costsHere's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in Palestine to stay compliant from day one.
Type
Duration
Pay During Leave
Sick leave (days 1-3)
100% (no separate 1–3 tier; days 1–14 full pay)
100% days 4–14, then 50% days 15–20
50% days 21–28 (28-day annual cap); unpaid beyond absent extension
Up to 2 weeks (14 days), paid, a one-time entitlement after 5 years of continuous service with the same employer
Hajj (pilgrimage) leave
3 days paid leave on the death of a relative up to the second degree (spouse, parent, child, sibling)
Bereavement (mourning) leave
1 week (7 days) paid per year for labour-related educational or union activities
Labour/cultural (union education) leave
Up to 10 days per year (maximum 3 consecutive days), deducted from the employee's annual leave entitlement
Contingency (emergency) leave
Here's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in Palestine to stay compliant from day one.
Statutory Benefits
In addition to statutory leave, employees are entitled to the following statutory benefits:
Palestine does not currently have an operative, enforced social security/pension contribution system for private-sector employees. The Palestinian Social Security Law (Law No. 19 of 2016) was approved but suspended by presidential decree in 2019 after widespread public protests, and remains unimplemented as of 2026 despite a revised draft circulated for public consultation in 2023.
- Suspended law's proposed employer rate: 9.8% of gross wages
- Suspended law's proposed employee rate: 6.2% of gross wages
- Intended to cover old-age pension, disability, survivors' benefits, work injury, and maternity insurance branches
- Until (and unless) the law is reactivated, employers should budget 0% mandatory social security payroll cost, but must still fund end-of-service severance and work-injury insurance directly
Employers should monitor Palestinian Ministry of Labour / Palestinian Social Security Corporation (PSSC) announcements, since reactivation would materially change payroll cost structure.
WORKPLACE INJURY PROTECTION
Because the Palestinian Social Security Corporation's work-injury branch is not yet operative, work-injury protection is delivered through direct employer liability and private insurance rather than a state fund.
- Employers are legally responsible for compensating employees for injuries or occupational diseases arising out of and in the course of employment
- In practice, most formal-sector employers purchase private work-injury/accident insurance policies to cover this exposure
- Compensation typically covers medical treatment costs, a disability/incapacity payment scaled to injury severity, and death benefits to dependents for fatal accidents
- Coverage and claims are currently administered through the private insurance market and the labour courts rather than a national workers' compensation board
Palestinian Labour Law No. 7 of 2000 grants employees an end-of-service ('severance') payment on termination of an indefinite contract, calculated on the employee's final basic wage (excluding overtime).
- Standard entitlement: one month's wage for each year of service (Article 45), for employees with at least one year of tenure
- Arbitrary/unfair dismissal: an additional compensation of two months' wages for each year of service, capped at a maximum of two years' total wages (Article 47)
- Resignation-based reductions: employees who resign (rather than being dismissed) receive one-third of the end-of-service bonus after under 5 years of service, two-thirds after 5-10 years, and the full amount after 10+ years (Article 42)
- Severance is paid in addition to, not instead of, the statutory notice period
A 13th- or 14th-month salary is not mandated under Palestinian Labour Law.
- Some employers pay a discretionary bonus around Eid al-Fitr, Eid al-Adha, or year-end, but this is a matter of company policy or collective bargaining agreement, not a statutory obligation
- Where offered, such bonuses are contractual or customary rather than a legal entitlement and can typically be structured, prorated, or withdrawn at the employer's discretion, subject to the terms of the employment contract
Here's what you need to know about their employment laws, taxes, termination rules, and more. And many companies choose to work with an Employer of Record in Palestine to stay compliant from day one.
Unfair dismissal
Dismissal without one of the legally recognized grounds, or without following the required notice/procedure, is considered arbitrary/unfair. Protected grounds that can never justify dismissal include trade-union membership or activity, acting as an employee representative, and filing a good-faith complaint or lawsuit against the employer (Article 39). An employee dismissed arbitrarily is entitled — in addition to standard end-of-service pay — to compensation of two months' wages per year of service, capped at two years' total wages (Article 47), and may pursue the claim before the labour courts.
Objective / fair dismissal
Lawful dismissal grounds include: serious misconduct such as falsified qualifications, gross negligence causing major loss, repeated violation of workplace rules after a written warning, unauthorized absence (7+ consecutive days or 15+ cumulative days per year after warnings), breach of confidentiality, a relevant criminal conviction, intoxication at work, or assault/slander against the employer (Article 40 — allows summary dismissal without notice); and termination for genuine technical or economic/restructuring reasons, which requires the employer to notify the Ministry of Labour in advance (Article 41).
During probation
No notice, cause, or severance required (probation up to 3 months).
After probation
Once probation ends, indefinite contracts can only be terminated for valid cause (see fair-dismissal grounds) or for economic/technical reasons, and require statutory notice — 1 month for monthly-paid employees or 1 week for daily/weekly-paid employees (Articles 35/46) — plus payment of accrued end-of-service severance. Dismissal without valid grounds or proper notice exposes the employer to arbitrary-dismissal compensation.
Notice and termination rules described here summarize Palestinian Labour Law No. 7 of 2000 as applied in the West Bank under Palestinian Authority jurisdiction. Enforcement mechanisms, court practice, and local custom can vary, and conditions in Gaza differ materially in practice given the different governing authority and ongoing conflict-related disruption. Employers should confirm current requirements with local legal counsel before relying on these figures for a specific termination.
Content last reviewed Sep 2026. Employment laws change fast, always verify critical hiring decisions, and talk to our team of international experts.
