Israel
Make employment in Israel easy. Let us handle payroll, benefits, taxes, compliance, and even stock options for your team in Israel, all in one easy-to-use platform.
- Capital City
Jerusalem
- Currency
Israeli new shekel (₪, ILS)
- Languages
Hebrew, Arabic, and English
- Population size
9,305,440
- Remote-Owned Local Entity
Facts & Stats
- Capital City
Jerusalem
- Currency
Israeli new shekel (₪, ILS)
- Languages
Hebrew, Arabic, and English
- Population size
9,305,440
- Ease of doing business
Very easy
- Cost of living index
$$$$ (9 of 139 nations)
- Payroll frequency
Monthly
- VAT - standard rate
17%
- GDP - real growth rate
3.5%
Established shortly after World War II, Israel sits on the eastern side of the Mediterrannean Sea. While Israel claims Jerusalem as its capital, most countries maintain their embassies in Tel Aviv, the country’s technological and economic center. With several holy sites contained within its borders, Israel regularly receives Jewish, Christian, Muslim, and other visitors to see its rich history.
Grow your team in Israel with Remote
Looking to employ workers in Israel? Companies hiring in Israel must either own a legal entity in the country or work with a global employment solutions provider, usually one that provides employer of record services.
Remote can employ your team in Israel on your behalf through our local legal entity in the country and handle payroll, benefits, taxes, and compliance for your Israel team. You can also pay contractors now in Israel with Remote.
Risks of misclassification
Israel, like many other countries, treats self-employed individuals or contractors and full-time employees differently. Misclassification of contractors in Israel may lead to fines and penalties for the offending company.
Employing in Israel
Without a central constitution, much of Israel’s employment law exists through direct legislation and case law. Employees in Israel do have certain rights employers must observe, including the right for Jews to rest on the Sabbath each week and protections for all workers from being fired while on strike. For companies hiring from abroad, the complexity of Israeli employment law can sometimes feel overwhelming.
Contact Remote to learn more about your options for employing workers in Israel.
Minimum Wage
In Israel, the minimum wage is 5,300 ILS per month.
Payroll Cycle
For customers of Remote, all employee payments will be made in equal monthly installments on or before the last working day of each calendar month, payable in arrears.
Onboarding Time
We can help you get a new employee started in Israel fast. The minimum onboarding time we need is only 5 working days.
Our team ensures your employees are onboarded and paid as quickly as possible while keeping your business compliant with all local employment legislation. The minimum onboarding time begins after the employee submits all required information onto the Remote platform. The onboarding timeline is also dependent upon registration with local authorities.
For all non-nationals of the country of employment, the Right to Work assessment (if applicable) will add three extra days to the total time to onboard. There may be extra time required if we need to follow-up on the right to work assessment.
Please note, payroll cut-off dates can impact the actual first day of employment. Remote has a payroll cut-off date of the 10th of the month unless otherwise specified.
9 Public holidays
Competitive benefits package in Israel
At Remote, we’re obsessed with helping you craft the best possible employee experience for your team. We are leading the way in practicing “fair equity,” which means making sure employees everywhere have access to both the required and supplemental benefits they need to thrive (and that will allow you to attract the best local talent).
Our benefits packages in Israel are tailored to fulfill the local needs of your employees. Typically, our packages contain some or all of the following benefits:
Health Insurance
Dental Insurance
Vision Insurance
Mental Health Support
Pension or 401(K)
Life and Disability Insurance
Taxes in Israel
Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in Israel.
3.55-7.6%
National Insurance for residents
0.59-2.65%
National Insurance for nonresidents
6.50-8.33%
Pension
2.50%
Disability
7.5%
Study Fund
20.64-28.58%
Total Cost of Employment
Types of leave
All employees in Israel with a five-day workweek are entitled to a minimum of 12 days leave per year. Employees with a six-day workweek are entitled to 14 days of leave per year. After four years of employment, the number of vacation days goes up by two per year. An employee can accumulate a maximum of 28 vacation days. There are also nine paid public holidays. Israel also observes four additional holidays where, though not mandatory, many businesses and government offices offer collective or optional paid leave.
Employment termination
Termination process
In Israel, employers are obligated to follow a fair and transparent process before terminating an employee. Israel requires employers to invite the employee to a hearing with a document in writing that presents the reason(s) why they would like to proceed with a termination. The employee is given time to respond at the hearing and has the option of appointing a lawyer to present their case. The employer must take into account everything that was said by the employee at the hearing and assess the need for termination again. Companies should consult legal counsel before proceeding with a termination in Israel.
Notice period
During the first six months, one day of notice is accumulated for each month of employment. In addition to the six days accumulated, 2.5 days of notice are accumulated for each month of employment from the sixth month to the end of the first year. Following the first year, termination requires a 30-day notice.
Severance pay
Terminated employees in Israel receive one month’s salary for every year of service as severance pay. Employees who have worked for less than one year are not entitled to severance pay. The monthly salary used to calculate the severance payment is the employee’s average salary over the last 12 months. Some employers add a severance component of 8.33% to the employee’s monthly compensation.
Probation periods
Probationary periods are informally allowed in Israel, usually lasting a few months. While employees are to be treated as full employees with all accorded benefits during the probationary period, employers may dismiss employees during the probationary period more easily than they can dismiss more tenured employees.