Hire employees in

Israel, hassle-free

Hire employees in Israel, hassle-free

With Deel, your business can easily hire employees in Israel. No more worrying about local laws, complex tax systems, or managing international payroll. Deel takes care of everything in 150+ countries.

The average onboarding time frame in Israel is 1 day with Deel.

Download the Guide

Currency

New Shekel ILS/NIS

Capital

Jerusalem

Official Language

Hebrew

Payroll Cycle

Monthly

Hire employees in Israel. No entity needed.

Usually, to hire in Israel, your business needs an entity. That means a local office, an address registered as a subsidiary, and an account with a local bank. All of this, plus navigating regional benefits, payroll, tax, and HR laws, can take months.

Israel also treats contractors differently than full-time employees, so misclassifying a contractor could lead to fines. Deel lets you hire employees in Israel quickly, easily, and compliantly. We even automate tax document collection, payroll, benefits, and more.

All the necessary benefits for Israel
built right in

Deel allows you to provide localized benefits for employees in Israel within minutes. All in one manageable online dashboard.

  • Pension Fund
  • Public Health Insurance
  • Study Fund

Our quickstart guide to hiring in Israel

Navigate the tabs below to learn everything you need to know about hiring an employee in Israel

Minimum Wage Requirements

The minimum wage is ILS 5,300 per month.

Individual Income Tax

The individual income tax ranges from 10% to 50%. Income tax is calculated according to progressive rates. Multiple additional factors may impact overall rates such as the marital status and the number of children.

The tax rates change annually. These are the rates for 2021.

Gross Annual Income (ILS) Tax Rate (%)
Up to 75,480 10%
75,481- 108,360 14%
108,361- 173,880 20%
173,881- 241,680 31%
241,681- 502,920 35%
502,921- 647,640 47%
Above 647,641 50%

Employer Cost

The employer cost is generally estimated at 29.93% of the employee salary.

  • Severance - 8.33%
  • Pension Fund - 6.50%
  • Bituah Leumi - 7.60%
  • Seniority Pay - ILS 156
  • Keren Hishtalmut - 7.50%

Overtime Pay & Maximum Hours

Standard working hours are 8.4 hours per day, 5 days a week. The standard workweek is from Sunday to Thursday.

The standard workweek can be extended up to 42 hours per week.

Overtime payment is mandatory for hourly-wage workers. Overtime payment is not mandatory for employees with a fixed salary as it is adjusted for in their salaries. Hours outside of standard work hours are considered overtime. Employees can work a maximum of 12 hours of overtime per day, 16 hours of overtime per week. For the first 2 hours of overtime, employees are paid 125% of their hourly wage. For every hour after that, employees are paid 150% of their hourly wage.

Maternity 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.

The employee is not entitled to be paid a salary, but for some of the period, is entitled to be paid a Maternity Allowance (Maternity Pay) by the National Insurance Institute, based on the period for which national insurance taxes were paid.

  • Employee who paid national insurance taxes for 10 out of the 14 months - Maternity allowance of 15 weeks
  • Employee who paid national insurance taxes for 15 out of the 22 months - Maternity allowance of 15 weeks
  • Employee who paid national insurance taxes for 6 out of the 14 months - Maternity allowance of 8 weeks

The maternity allowance rate is determined according to the employee's gross salary based on which National Insurance payments are made, up to the maximum amount of ILS 1,485.83 per day.

The employee is not entitled to any payment or maternity allowance for the remaining weeks of the maternity leave.

Paternity 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 Social Security will be responsible for this pay.

Parental Leave

In Israel, no law covers parental leave. However, employees may be entitled to maternity leave and paternity leave.

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. The sick leave is paid at different rates and by the employer.

Employees can accrue sick leave up to 5 years, a total of 90 days.

Day Number Pay (% of base salary) Payer
1 0% Employer
2 - 3 50% Employer
Over 4 days 100% Employer

Termination Requirements

Compliant terminations include:

  • Voluntarily by the employee
  • Unilaterally by the employer for any reason except:
    • Discrimination (based on age, parenthood, fertility treatments, race, sex, nationality, etc.)
    • Filing a complaint with a legal authority against his employer or an employee of the employer concerning violations of law at the workplace
    • When an employee is absent from work according to instructions of security forces during an attack or other national emergency
    • Reasons specified in a collective agreement, employment contract, or case law
  • By mutual agreement
  • By the expiration of the contract

Notice Period

The minimum notice period is 1 day and will be increased according to the length of the employment:

Length of Employment Notice Period
Between 1 to 6 months of employment 1 day for each month worked
Between 6 to 12 months of employment 2.5 days for each month worked
For 12 months of employment and over 1 month (regardless of how many years worked)

Severance for Employees

In Israel, all employees are entitled to severance pay. Severance pay is 8.33% of the salary for each year of employment. The amount paid is taken from the Severance fund that the employer must pay towards every month.

Paid Time Off

Full-time employees are entitled to 12 days of paid time off (PTO) a year for a 5 day work week.

Part-time employees are entitled to the same as full-time employees (pro-rata) or at 70% of full-time wages.

PTO accrues monthly and is calculated by dividing base pay by 21.67 days per month and multiplying the value, by 10 or 12 (based on employee workweek). The employer must make sure that employees use a minimum of 7 days of PTO per year. Employees are eligible for annual leave after 3 months of work.

Public Holidays

Israel celebrates 9 public holidays:

  1. First Day of Passover
  2. Seventh Day of Passover
  3. Yom Ha'atzmaut
  4. Shavuot
  5. Rosh Hashanah
  6. Yom Kippur
  7. First day of Sukkot
  8. Shemini Atzeret
  9. Simchat Torah

Additional elections holidays may also apply.

Onboarding

Onboarding takes 1 business day.

Employment Contract Details

Contracts must be in Hebrew or English and can be bilingual. They must be in writing and signed by both parties.

A contract must include:

  • Name
  • Start date
  • Base Salary
  • Transportation
  • Vacation Days
  • Sick Days
  • Pension
  • Termination conditions

Probation Period

The typical probation period is 3 months. If the person does not have an active pension fund, it can reach six months. Probationary periods are permitted by Israeli law, but an employee would still be considered a regular employee during such a period.
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Hiring in Israel, hassle-free

With Deel, your business can easily hire employees in Israel. No more worrying about local laws, complex tax systems, or managing
international payroll. Deel takes care of everything in 150+ countries.

Group (8)

599 USD

Management fee

Group (9)

29.93%

Estimate Employer Cost

*of employee salary

Want to learn the cost of hiring an employee in Israel?

View our Employee Cost Calculator

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