Payroll Cycle
Minumum Wage
Overtime Pay
Overtime hour Rate
First 2 hours 125%
After 2 hours (and every hour after that) 150%
Visa Immigration

Talent Wiki - Israel

Your quick guide on talent and labor compliance norms in Israel
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Capital
Jerusalem
Currency
Israeli Shekel (ILS)
Languages
Hebrew, Arabic, English
Payroll Frequency
Monthly
GDP per Capita
$52,504
Employer Tax
29.33% to 19.8%

Supplementary Guide for Employment and Expansion in Israel

Talent Overview

Israel is a promising country for investors and foreigners seeking to expand their operations within the region. It has been ranked 35th in the Ease of Doing Business Index by the World Bank and ranked 12th place in the most number of start-up businesses in the world. In turn, the labor market in the country remains to have an increasing trajectory, to meet the demand of their developing business sector.

Major economic hubs:

Tel Aviv, Herzliya, Raanana, Kfar Saba, Ramat HaSharon

Skills in demand :

Accountant, Software Engineer, Marketing, Teacher, Computer programmers

Local Universities

The top local universities in Israel includes the following:

Tel Aviv University

RANKING

Local : 1

World : 292

Hebrew University of Jerusalem

RANKING

Local : 2

World : 318

Technion - Israel Institute of Technology

RANKING

Local : 3

World : 417

Weizmann Institute of Science

RANKING

Local : 4

World : 490

Ben-Gurion University of the Negev

RANKING

Local : 4

World : 735

Salary Data

Some popular jobs in Israel and their corresponding salaries are listed below:

No. Job Title Annual Salary Range (in ILS) Annual Salary Range (in USD)
1 Technical Product Engineer 108,157 - 188,849 34,192.93- 59,703.03
2 Software Developer 170,817 - 303,151 54,002.36 - 95,838.64
3 Data Analyst 151,583 - 267,023 47,921.69 - 84,417.08
4 UX Designer 137,510 – 238,875 43,472.63 - 75,518.32
5 Project Manager 147,409 – 259,671 46,602.12 - 82,092.81
6 Sales Executive 91,552 – 197,964 28,943.40 – 62,584.66

Talent Sourcing Tips

Top Local Job Boards:

Nefesh B'Nefesh, Israemploy, JobMaster, JobNet

Number of LinkedIn users:

2,054,000

Top Recruitment Agencies:

DevsData LLC, UpStartHR, Manpower Israel

Employing in Israel

Gaining familiarity with Israel’s employment regulations is a necessary step when Onboarding employees in the country. The following section should guide you through the process compliantly.

Employee Contract

Employment contracts in Israel should be in a language that employers and employees understand. Although, English is most commonly used.

Probation Period

In Israel, the probation period will depend on the employer’s discretion. But generally, it can be up to 12 months. 

Public and Provincial Holidays

Date Name Type
17 Mar Purim (Tel Aviv) Local Holiday
18 Mar Shushan Purim (Jerusalem) Local Holiday
16 Apr Passover (Day 1) National holiday, Hebrew
22 Apr Passover (Day 7) National holiday, Hebrew
5 May Yom HaAtzmaut National holiday, Hebrew
5 Jun Shavuot National holiday, Hebrew
26 Sep Rosh Hashana National holiday, Hebrew
27 Sep Rosh Hashana (Day 2) National holiday, Hebrew
5 Oct Yom Kippur National holiday, Hebrew
10 Oct Sukkot (Day 1) National holiday, Hebrew
17 Oct Shemini Atzeret / Simchat Torah National holiday, Hebrew

Employee Leaves

Type of Leave Time Period Mandatory
Annual Leave 16 days Yes
Sick Leave 90 days Yes
Maternity Leave 26 weeks Yes

Payroll

Payroll Cycle

In Israel, the payroll cycle is monthly.

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Minimum Wage

The National minimum wage in Israel is 5,400.00 ILS per month. 

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Overtime Pay

Click on the link below to know more about overtime pay in Israel

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Health Examination Clause

Bonus

13th Month Pay

A 13th month pay is not mandatory in Israel. However, most employers in Israel provide 13th month pay for their employees.

Employee Benefits

Benefits for Israeli employees may include the following:

  • ~Health Insurance
  • ~Pension
  • ~Transportation Allowance
  • ~Convalescence Pay
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Taxes

Employer Payroll Tax

  • Contribution to national insurance
  • ~~For residents
Monthly Income (ILS) Tax Rate
Up to 6,331 3.55%
Up to 45,075 7.6%
  • ~~For non-residents
Monthly Income (ILS) Tax Rate
Up to 6,331 0.59%
Up to 45,075 2.65%
  • ~Severance Pay - 8.33%
  • ~Pension Fund - 6.5% ( or 7.5% including disability insurance)
  • ~Advance study fund - upto 7.5%

Employee Payroll Tax

Contribution Type Tax Rate
Social Security (on the first 6,331 ILS) 0.40%
Social Security (on amount above 6,331 ILS, limit: 45,075 ILS) 7%
Health Insurance (on the first 6,331 ILS) 3%
Health Insurance (on amount above 6,331 ILS, Limit: 45,075 ILS) 5%
Pension Fund 6%

Employee Income Tax

Taxable Annual Income (ILS) Tax Rate
0 - 77,400 10%
77,400 - 110,880 14%
110,880 - 178,080 20%
178,080 - 247,440 31%
247,440 - 514,920 35%
514,920 - 663,240 47%
Above 663,240 50%

VAT

The Standard VAT rate in Israel is 17%

Offboarding & Termination

Termination Process

Termination is based on valid reasons and in compliance with law. It includes a hearing process explaining the reasons and the decision to be communicated in writing. Recommended to provide a termination letter in person, preferably in 48 hours after the hearing process.

Notice Period

Notice period for employees during probation and after probation varies. For the former, it will be up to 6 days while the latter is up to 21 days.

Severance Pay

Employees entitled to a severance pay after completing 1 year of service. The pay to be calculated as one month’s pay times(multiplied by) the years of employment.

Visa and Immigration

Foreign employees in Israel need to apply for a work visa from the Israeli Ministry of Interior. Employers are required to secure a work permit on behalf of their employees to legally work in the country.

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