Talent Wiki - Israel
Your quick guide on talent and labor compliance norms in Israel
Capital
Jerusalem
Currency
Israeli Shekel (ILS)
Languages
Hebrew, Arabic, English
Payroll Frequency
Monthly
GDP per Capita
$56,358.84
Employer Tax
29.33% to 19.8%
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: 226
Hebrew University of Jerusalem
Ranking:
Local: 2
World: 238
Technion – Israel Institute of Technology
Ranking:
Local: 3
World: 404
Weizmann Institute of Science
Ranking:
Local: 4
World: 445
Ben-Gurion University of the Negev
Ranking:
Local: 5
World: 540
Salary Data
Some popular jobs in Israel and their corresponding salaries are listed below:
| Job Title | Average Monthly Salary (ILS) | Average Monthly Salary (USD) |
| Financial Manager | 29476.67 ILS | 8395.33 USD |
| General Manager | 48514.67 ILS | 13817.60 USD |
| Business Development Manager | 27245 ILS | 7759.72 USD |
| Business Analyst | 17647.58 ILS | 5026.26 USD |
| Financial Analyst | 19130.92 ILS | 5448.73 USD |
| Project Manager | 22802.83 ILS | 6494.54 USD |
Talent Sourcing Tips
Top Local Job Boards:
Nefesh B’Nefesh, JobMaster, JobNet
Number of LinkedIn users:
2,054,000
Top Recruitment Agencies:
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 (2023)
| Date | Name | Type |
| 6 Apr | Passover (Day 1) | National holiday, Hebrew |
| 12 Apr | Passover (Day 7) | National holiday, Hebrew |
| 26 Apr | Yom HaAtzmaut | National holiday, Hebrew |
| 26 May | Shavuot | National holiday, Hebrew |
| 16 Sep | Rosh Hashana | National holiday, Hebrew |
| 17 Sep | Rosh Hashana (Day 2) | National holiday, Hebrew |
| 25 Sep | Yom Kippur | National holiday, Hebrew |
| 30 Sep | Sukkot (Day 1) | National holiday, Hebrew |
| 7 Oct | Shemini Atzeret / Simchat Torah | National holiday, Hebrew |
Employee Leaves
| Type of Leave | Time Period | Mandatory |
| Annual Leave | 16 days | Yes |
| Sick Leave | 18 days | Yes |
| Maternity Leave | 26 weeks | Yes |
Payroll
Payroll Cycle
In Israel, the payroll cycle is monthly.
Minimum Wage
The National minimum wage in Israel is 5,400.00 ILS per month.
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
Taxes
Employer Payroll Tax
| 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% | ||
Employee Payroll Tax
| 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% | ||
Employee Income Tax
| 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% |
VAT
The Standard VAT rate in Israel is 17%
Offboarding & Termination
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.
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.
