* Playroll continues to analyse immediate opportunities and fulfilled roles by recruitment partners, contractors and employers to identify in-demand jobs.

Capital City

New Israeli Shekel (₪)


IST (GMT +2)

Employment Cost


Annual Leave

12 days

In-demand Specialties*
Research And Development, Ict, Tourism

The Ultimate Guide to Hiring Employees in Israel

Simplify hiring employees in by partnering with Playroll. Our Employer of Record (EOR) handles hiring, onboarding, payroll, taxes, immigration, benefits administration, and compliance. While you maintain control of day-to-day tasks and responsibilities.


Key Considerations Before Hiring In Israel

Employing in Israel requires employers to own a legal entity in the country and manage payroll, tax, benefits and compliance through their own in-country resources. Grow your team in Israel with our Employer of Record solution, ensuring streamlined, compliant business expansion with no entity.

Playroll allows you to hire employee's in Israel quickly, easily and we even automate tax document collection, benefits, payroll and more.

Good To Know

Recognized as a "startup nation," Israel is renowned for its innovation, boasting the highest number of startups per capita globally. During the COVID-19 pandemic, it ranked 15th among 132 economies for increased innovation, according to the World Intellectual Property Organization's Global Innovation Index.

Israel excels in technology, housing major companies in its high-tech sector and possessing a well-developed network infrastructure. The Silicon Wadi region along the Israeli coast serves as a prominent global centre for high-tech industries.

With a highly educated workforce proficient in English, Israel is an appealing option for companies seeking remote employees. The country leads global rankings in easily finding employees with tertiary education and in-demand skills.

Employees in Israel benefit from a government-mandated 'recreation payment.' Additionally, a 17% VAT is obligatory on the total employment cost unless the team member has no business in Israel and does not engage with Israeli customers.


Fundamental Aspects of Employment in Israel

In Israel, providing a written employment contract is not a legal requirement, except when hiring a foreigner. However, employers are obligated to provide employees with a written statement in a language mutually understood by both parties. This statement functions as an employment notice, including details such as:

  • Identification of both parties
  • Starting date (and duration if possible)
  • Job position and its description
  • Terms of employment
  • Information about the supervisor
  • Basic salary, including compensation and benefits
  • Daily and/or weekly working hours
  • Weekly rest day
  • Social benefits and payments
  • Details and contributions to the pension fund
  • Relevant collective agreements (if applicable)

Probationary Period in Israel

Israeli law permits probationary periods where employees have the status of regular employees in all respects. Mandatory probation lasts one day per month for the initial six months and then increases to two and a half days for each subsequent month of employment, with details specified in the employment contract or collective agreement.

Working hours in Israel

In Israel, the standard workweek consists of 42 hours, with daily hours ranging from 7 to 9, depending on the number of workdays. The workweek runs from Sunday to Thursday, with Fridays and Saturdays as rest days. It is illegal to work more than 12 hours in a single day or accumulate over 16 hours of overtime in a week.

Overtime in Israel

Extra hours worked beyond the regular workweek are paid as overtime and are regulated by the employment contract or collective agreements, requiring mutual consent from both the employer and employee. Compensation for overtime is 125.00% of the regular salary for the first two extra hours and 150.00% of the regular salary for hours worked on weekly rest days. Certain companies choose to offer a fixed monthly amount as compensation for overtime.

Navigating Key Aspects of Payroll in Israel

Israel has a robust and complex payroll and tax system, and as an employer, it pays to understand payroll process basics.

1 January - 31 December

Fiscal Year in Israel

1 January - 31 December is the 12-month accounting period that businesses in Israel use for financial and tax reporting purposes.

Payroll Cycle in Israel

The payroll cycle in Israel is usually monthly, with employees being paid by the 9th of the following month.
33.17 ILS p/h

Minimum Wage in Israel

The minimum wage for employees in Israel is typically 33.17 ILS per hour, amounting to ~5,571.75 ILS per month for a typical 42 hour work week.

Minimum wages and salaries in Israel

In Israel, a law has been enacted to progressively raise the minimum wage annually until the end of 2025, reaching 6,000 ILS by that point.

Bonus Payments in Israel

It is not a legal obligation in Israel to provide 13th-month salary.

Comprehensive Overview of Employment Taxes in Israel

Understanding the tax obligations for both employers and employees is crucial when operating in Israel's business landscape. This section explains how taxes and statutory fees affect payroll and individual earnings in Israel.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 21.78% on top of the employee salary in Israel.

Tax Rate Tax Type

Employee Payroll Tax Contributions

In Israel, the typical estimation for employee payroll contributions cost is around 21.1%.

Tax Rate Tax Type

Individual Payroll Tax Contributions

In Israel, individual income tax rates vary from 10% to 50% and is subject to annual adjustments. The calculation follows progressive rates, and factors like marital status and the number of children can impact the overall tax rates.

Tax Rate Income Bracket

Pension in Israel

Employees aged 20 and above contribute 18.5% to pension insurance (6% from the employee, 12.5% from the employer). To qualify for the old-age retirement pension, individuals must reach retirement age (67 years for men; 62-65 years for women), pass an income test, and have had continuous employer insurance contributions.

The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Israel tailored to your needs.

Easily navigate payroll, taxes and contributions with Playroll.

Grow your distributed workforce today!

Understanding the Protocols for Termination of Employment in Israel

When it comes to terminating employment in Israel, understanding the legal obligations regarding severance pay and contributions is essential. Below is a detailed overview of the key considerations for both employers and employees.

Termination Process

In Israel, ending an employee's contract requires a just process that considers valid reasons, legal obligations, the employment agreement, workplace standards, and any applicable collective agreements. Typically, a hearing is conducted to allow the employee to present their perspective before the employer makes a decision. Acceptable termination scenarios include:

  • Voluntary termination by the employee
  • Unilateral termination by the employer, excluding reasons related to discrimination, complaints against the employer or employee for workplace violations, absence due to a national emergency, or reasons specified in the collective agreement, employment contract, or case law
  • Mutual agreement
  • Expiration of the contract

Notice Period

The notice period duration in Israel depends on the employee's tenure. Upon termination, the employer must pay the salary for the notice period and other necessary amounts. The employee usually continues working during this period, unless directed otherwise. After the termination hearing, the employer may put the employee on garden leave, still compensating them for the notice period. The standard notice periods are as follows:

  • For 0-6 months of service: 1 day notice per month employed
  • After 6 months: 2.5 days’ notice per month employed
  • For more than 1 year: 30 days' notice

Severance Pay

After completing one year of service, employees become eligible for severance pay, calculated by multiplying one month's salary by the total number of years of employment. Severance pay amounts to 8.33% of the salary for each year of service. The employer contributes to a Severance Fund monthly, and this fund is then released to the employee upon termination.

Annual Leave Entitlements and Company Policies in Israel

The annual leave entitlement in Israel is 12 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays in Israel

Israel has nine public holidays each year, and these are separate from the minimum paid leave entitlement. They are taken in addition to the regular annual leave. The following are the national holidays in Israel:

Holiday Date

Paid Time Off in Israel

Maternity Leave in Israel

Paternity Leave in Israel

Sick Leave in Israel

Bereavement Leave

Parental Leave In Israel

Israel's Benefits Built Into Playroll

Competitive benefits package in Israel

Playroll is committed to providing tailored, competitive benefits packages that are designed not only to attract but also retain top talent worldwide. Our global team of benefits experts build custom local packages to ensure your employees in Israel's needs are met. Typically our packages contain some or all of the following benefits.

Health Insurance
Pension or 401k
Life and Disability Insurance
Vision Insurance
Dental Insurance
Discounts & Perks

Playroll Supplementary Benefits For Employment In Israel

Make your benefits package in Israel a talent magnet with Playroll's local plans. We offer benefits that are compliant, comprehensive, and flexible — all at competitive rates. Speak with our local territory experts to explore the localized benefits we can offer you, while you scale your team.

  • Health Insurance
  • Pension
  • Background Checks
  • IT Equipment Sourcing

Statutory benefits for employment in Israel

Playroll allows you to provide localized benefits for employees in Israel within minutes. All in one manageable online dashboard. If you'd like specific information about our benefits packages in Israel create an account or contact our global expansion team, today.

Playroll Benefit Services

Playroll's Expertise in Facilitating Work Visas for Israel

At Playroll we're all about empowering employees to work anywhere, making mobility possible for global teams. We sponsor visas and hire the employee for you, so you don’t have to worry about payroll, taxes, and more.

It's important to note, visa support can be complicated. There are many variables that affect whether sponsorship is possible, including one’s nationality, education, marital status, and the immigration policy for the country in question.

Unfortunately, this means we can’t support visas everywhere - with that being said, we handle the entire visa process in-house, and dig into your situation to give you an overview of what to expect if we're able to help with visa sponsorship in Israel.

Playroll Immigration Support

Integrated EOR Platform

Legal and compliance experts are readily available to provide guidance and case-by-case Q&A support.

Accelerated Immigration Timeline

By leveraging dedicated support from in-house legal and compliance experts for case by case questions and more.

Hire in 50+ Countries

Accelerated Immigration Timeline

Acquiring a visa without an entity has never been easier, leverage Playroll's global coverage to sponsor and hire employees.

Playroll Visa Services

Hiring International Employees is Complex.

Playroll makes it easy!