Remote’s guide to employing in

Israel
israel flag

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

Services available in this country:
Employer of Record ProductContractor ManagementGlobal Payroll

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 ILS 5,880.02 per month from 1 April 2024.

Payroll Cycle

For customers of Remote, all employee payments will be made in equal monthly instalments 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.

10 Public holidays

Apr
Tuesday 23 April 20241Passover (Pesach - פסח)
Monday 29 April 20242Last day of Passover (Pesach - שביעי של פסח)
May
Thursday 9 May 20243Victory in Europe Day (יום הניצחון באירופה)
Tuesday 14 May 20244Independence Day (Yom HaAtzmaut - יום העצמאות)
June
Wednesday 12 June 20245Shavuot (שבועות)
Oct
Thursday 3 October 20246Rosh Hashanah (ראש השנה)
Friday 4 October 20247Second day of Rosh Hashanah (היום השני של ראש השנה)
Saturday 12 October 20248Yom Kippur (יום כיפור)
Thursday 17 October 20249Sukkot (סוכות)
Friday 25 October 202410Simchat Torah (שמחת תורה)

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 practising “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 fulfil 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 holiday days goes up by two per year. An employee can accumulate a maximum of 28 holiday 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.

Fair Pricing in Israel

Employer of Record

Hire and pay your global team

Starting at USD 599/month

for annual plans

Top features

  • Satisfaction guaranteed

  • No deposits or hidden fees

  • Zero onboarding or offboarding fees

  • Compliant equity incentives support including withholding and reporting

  • Built-in security and compliance

  • Fast onboarding (average 2-3 days)

  • Flexible, localised benefits

Contractor Management

Compliantly onboard and pay contractors

USD 29

per contractor/month

Start free trial

Top features

  • Only pay for contractors you actively work with

  • Work with contractors in 200+ countries

  • Create, edit, and sign tailored, localised contracts

  • Approve contractor invoices with one click or auto-pay

  • Transparent payments with complete visibility

Global Payroll

Consolidate your multi-country payroll

USD 50

per employee/month

Top features

  • Reduce costs by centralising payroll management

  • Ensure local compliance for every country

  • Direct support from in-house local payroll experts

  • Accurate, on-time, compliant payroll to level-up your employee experience

  • Tax and labour authority reporting handled for you

HRIS

Manage all of your employees in one place

Free
Sign up

Top features

  • Guided onboarding and offboarding

  • Employee profile and document management

  • Time and attendance (time off and tracking)

  • Expense management and reimbursement

  • Employee self-serve on the platform and mobile app