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Speed up your global expansion! Expand smartly in 150+ countries with the #1 rated EOR globally.
Explore Multiplier EOR
Your guide to the employment landscape, working customs and local labor laws in Israel
Capital
Jerusalem
Currency
Israeli Shekel (ILS)
Languages
Hebrew, Arabic, English
GDP per Capita
$57,064.44
Employer Tax
29.33% to 19.8%
Payroll Frequency
Monthly
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:
Local: 1
World: 224
Local: 2
World: 272
Local: 3
World: 390
Local: 4
World: 394
Local: 5
World: 575
Nefesh B’Nefesh, JobMaster, JobNet
2,479,000
Top Local Job Boards:
Top Local Job Boards
Number of LinkedIn users:
Number of LinkedIn users
Top Recruitment Agencies:
Some popular jobs in Israel and their corresponding salaries are listed below:
| Job Title | Average Monthly Salary (ILS) | Average Monthly Salary (USD) |
| Financial Manager | 29,477 ILS | 8,142 USD |
| General Manager | 48,515 ILS | 13,401 USD |
| Business Development Manager | 27,245 ILS | 7,526 USD |
| Business Analyst | 17,648 ILS | 4,875 USD |
| Financial Analyst | 19,131 ILS | 5,284 USD |
| Project Manager | 22,803 ILS | 6,299 USD |
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.
Employment contracts in Israel should be in a language that employers and employees understand. Although, English is most commonly used.
In Israel, the probation period will depend on the employer’s discretion. But generally, it can be up to 12 months.
| Date | Name | Type |
| 30 Jan | Municipal Election Day | National Holiday |
| 24 Mar | Purim (Tel Aviv) | Local Holiday |
| 25 Mar | Shushan Purim (Jerusalem) | Local Holiday |
| 23 Apr | Passover (Day 1) | National holiday, Hebrew |
| 29 Apr | Passover (Day 7) | National holiday, Hebrew |
| 14 May | Yom HaAtzmaut | National holiday, Hebrew |
| 12 Jun | Shavuot | National holiday, Hebrew |
| 3 Oct | Rosh Hashana | National holiday, Hebrew |
| 4 Oct | Rosh Hashana (Day 2) | National holiday, Hebrew |
| 12 Oct | Yom Kippur | National holiday, Hebrew |
| 17 Oct | Sukkot (Day 1) | National holiday, Hebrew |
| 24 Oct | Shemini Atzeret / Simchat Torah | National holiday, Hebrew |
| Type of Leave | Time Period | Mandatory |
| Annual Leave | 16 days | Yes |
| Sick Leave | 18 days | Yes |
| Maternity Leave | 26 weeks | Yes |
Leave Compliance
Payroll cycle
In Israel, the payroll cycle is monthly.
Minimum wage
The National minimum wage in Israel is 5,400.00 ILS per month.
Overtime pay
The standard working hours in Israel are 48 hours for a five-day workweek.
Read more
| Type of Contribution | Tax Rate | ||
| National Insurance | For residents | 0 – 6,331 ILS | 3.55% |
| 6,331 ILS – 45,075 ILS | 7.6% | ||
| For non-residents | 0 – 6,331 ILS | 0.59% | |
| 6,331 ILS – 45,075 ILS | 2.65% | ||
| Severance Pay | 8.33% | ||
| Pension Fund | 6.50% (7.50% including disability insurance) | ||
| Advance Study Fund | Up to 7.5% | ||
| Type of Contribution | Tax Rate | ||
| National Insurance | For residents | 0 – 6,331 ILS | 0.40% |
| 6,331 ILS – 45,075 ILS | 7% | ||
| For non-residents | 0 – 6,331 ILS | 0.04% | |
| 6,331 ILS – 45,075 ILS | 0.87% | ||
| Health Insurance (Residents only) | 0 – 6,331 ILS | 3.10% | |
| 6,331 ILS – 45,075 ILS | 5% | ||
| Pension Fund | 6% | ||
| Taxable Annual Income (ILS) | Tax on First amount | Tax Rate |
| 0 – 77,400 | 0 | 10% |
| 77,400 – 110,880 | 7,740 | 14% |
| 110,880 – 178,080 | 12,427 | 20% |
| 178,080 – 247,440 | 25,867 | 31% |
| 247,440 – 514,920 | 47,369 | 35% |
| 514,920 – 663,240 | 140,987 | 47% |
| Above 663,240 | 210,697 | 50% |
The Standard VAT rate in Israel is 17%
A 13th month pay is not mandatory in Israel. However, most employers in Israel provide 13th month pay for their employees.
Benefits for Israeli employees may include the following:
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 for employees in Israel is given as per the table below:
| Year of Employment | Notice period |
| 1st year | 1 day for every month worked |
| 2nd year | 14 days |
| 3rd year | 21 days |
| After 3 years | 1 month |
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.
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.
Read more
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Overtime Pay
Minimum Wage
Overtime Pay
If an employee works for extended hours, they must be given overtime pay at the following rate:
| Overtime hour | Rate |
| First 2 hours | 125% |
| After 2 hours (and every hour after that) | 150% |
Visa and Immigration
By use case
By team
By company size
Israel
