Israel Guide – Route 38 -Your Business Highway

Employer Guide to Israel

Capital City

Jeruslaem

Currency

New Israeli Shekel ₪

Official Language

Hebrew

Payroll Frequency

Monthly

Population

9,400.000

Average Monthly Salary

12,000 - 13,000 NIS

Employer Taxes

Employers are required to pay 28.28% in social contributions which includes severance pay (8.38%), national insurance (3.55%-7.6%), pension fund (6.54%), and disability insurance.

Time Off

Public Holidays

Israel celebrates 9 public holidays

Parental Leave

Pregnant employees, who have worked for 12 months for the same employer, are entitled to 26 weeks of paid leave. Employees who have worked for less than 12 months for the same employer or in the same place of employment are entitled to 15 weeks of paid leave

Employees, who have worked for 12 months for the same employer, are entitled to 1 month of paid paternity leave if the mother is back to work. Out of 1 month, 1 week must be overlapping with mother’s leave, and the remaining 3 weeks must be taken while the mother is back at work.

The employee will receive 100% of the salary during this period, and SocialSecurity will be responsible for this pay.

In Israel, the father can take paid leave instead of the mother, starting from the sixth week after the beginning of her maternity leave and ending after the 14th week.

Sick Leave

Employees are entitled to 1.5 days of paid sick leave per month, for up to 18 days. The first day is unpaid and considered as a qualifying period. On the second and third day, the employee is entitled to 50% of their regular pay. From the fourth day onward, the employee is entitled to 100% of their regular pay. Upon return to work, the employee must provide a medical certificate from a doctor.

Bereavement Leave

In the event of the death of an immediate family member, the employee is entitled to a number of paid grief days. This leave is capped at 7 days

Statutory Time Off

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.

Employment Lifecycle

Working Hours & Overtime

Employees in Israel work 42 hours per week from Sunday to Thursday.

The first two hours of overtime are paid at a rate of 125% of the regular pay, and 150% after that.

Overtime work and pay rates are usually outlined in the employment contract.

Probation Period

The probationary period in Israel is usually between one and 12 months, depending on the employment contract.

Notice Period

During the first six months, one day of notice is accumulated for each month of employment.

From months 6-12, 2.5 days of notice are accumulated for each month of employment.

From 12+ months, termination requires a 30-day notice.

Termination

Israeli employers are obligated to follow a specific process before terminating an employee.

In Israel, an employer can only terminate an employee after a hearing, following which they must provide the employee with written notice

Severance

Severance is one month’s salary for one year of work, unless the employee’s contract promises more.

Employees who have worked for less than one year are not entitled to severance pay.

If an employee has unused vacation days, the employer is required to pay a regular day’s salary per day.