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.
Tel Aviv, Herzliya, Raanana, Kfar Saba, Ramat HaSharon
Accountant, Software Engineer, Marketing, Teacher, Computer programmers
The top local universities in Israel includes the following:
Local: 1
World: 226
Local: 2
World: 238
Local: 3
World: 404
Local: 4
World: 445
Local: 5
World: 540
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 |
Nefesh B’Nefesh, JobMaster, JobNet
2,054,000
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 |
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 |
Type of Leave | Time Period | Mandatory |
Annual Leave | 16 days | Yes |
Sick Leave | 18 days | Yes |
Maternity Leave | 26 weeks | Yes |
In Israel, the payroll cycle is monthly.
The National minimum wage in Israel is 5,400.00 ILS per month.
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:
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%
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.
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% |