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Global Expansion Guide

Israel

Manage and pay your employees easily with BIPO in Israel and 170+ other markets. Build your international teams today with our global Employer of Record service!

employment guide_currency

Currency

Israeli New Shekel (ILS)

employment guide_language

Language

Hebrew, Arabic

Employer of Record Israel

Employment Contract

Statutory Contributions

Minimum Wage

Public Holidays

Working Hours

Leave

Termination and Compensation

BIPO as your Employer of Record

Benefits of BIPO EOR Service in Israel

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Employer of Record Israel

Embark on your business expansion in Israel with BIPO’s Employer of Record (EOR) services. Designed to assist you in navigating the intricacies of local employment laws and regulations, we can help ensure a smooth transition for your business and workforce.

As an Employer of Record (EOR), we act as your legal employment entity, streamlining the process of business expansion. Allowing businesses to focus on their core business operations while the EOR manages all aspects of compliance, payroll, HR, and employee benefits when venturing into the Israeli market. An EOR provider addresses the common challenges associated with local employment laws, payroll regulations, and work permit requirements.

This guide was last updated on 16 March 2026. The content in this guide is current as of this date and based on common business practices.

Employment Contract

While Israel does not require labour contracts to be in writing, employers must provide employees with a written notice outlining the employment terms within 30 days of the employee’s start date. This notice should include the following:

  1. Identity details of both parties, employment start date, and employment term (specify if open-ended).
  2. Main responsibilities of the employee’s role, and the name or position of the immediate supervisor.
  3. Working hours and rest days, including the duration of the normal working day/week and the employee’s weekly rest day.
  4. Total salary, including payment type, frequency (monthly, daily, hourly, etc.), and payment date. If salary is determined according to a collective agreement, the employee’s salary grade should be indicated.
  5. Salary breakdown, covering basic pay, benefits, seniority allowance, bonuses and incentives, overtime, shift allowance, convalescence allowance, and any other fixed or variable work-related allowances.
  6. Social welfare contributions, specifying payments by both parties for pensions, insurance, further education funds (if applicable), and details of employer contributions to relevant institutions.
  7. Collective bargaining agreements, if applicable, including the name of the employee organisation party to the agreement.
  8. Employment termination conditions, if the employer is a labour contractor or party to a work performance or service provision contract.

Statutory Contributions

Scope of Application: Applicable to employees of private enterprises.

Type of Social Insurance Contribution Base Employee Contribution Employer Contribution
Pension Fund Basic salary or average salary calculated in accordance with the National Insurance Law (whichever is lower) 6% 6.5% + 6% (compensation)
National Insurance ≤ ILS 7,703 1.04% 4.51%
ILS 7,703-51,910 7% 7.60%
Medical Insurance ≤ ILS 7,703 3.23% –
ILS 7,703-51,910 5.17% –
Work Injury Insurance – – Fully borne by the employer

Minimum Wage

Effective Date: 1 April 2025

Type Minimum Wage
Per Day (5-Day Workweek) ILS 288.35
Per Day (6-Day Workweek) ILS 249.90
Per Hour (186 Hours/Month) ILS 33.58
Per Hour (182 Hours/Month) ILS 34.32
Per Month ILS 6,247.67

Public Holidays

The public holidays listed below are national public holidays observed across Israel. Please refer to official government announcements for the latest updates.

  • Eve of Pesach (Passover)
  • Pesach (Passover)
  • Last Day of Pesach (Passover)
  • Israel Independence Day
  • Feast of Shavout (Pentecost)
  • Fast of Ninth of Av
  • Rosh Hashanah
  • Yom Kippur (Atonement Day)
  • Sukkot (Feast of Tabernacles)
  • Simchat Torah

Notes:

  • If a public holiday falls on a weekly rest day, there is no mandatory compensatory leave.
  • Overtime Compensation: No holiday pay is required when paid leave coincides with a weekly rest day.
  • Exemptions from Overtime Compensation on Public Holidays: There are no statutory provisions; terms are subject to mutual agreement between employer and employee.

Working Hours

Normal Working Hours

Category Daily Weekly
5-day workweek 9 hours 42 hours
6-day workweek 8 hours
The day before weekly rest days and applicable public holidays 7 hours

Work Breaks

  • Meal Breaks:

    • Minimum 45 minutes (including at least 30 consecutive minutes) for every 6 consecutive working hours.
    • Day before weekly rest or public holidays: Minimum 30 minutes for every 6 consecutive working hours.
  • Toilet Breaks: Employees may take breaks as needed. Employers must ensure that suitable and accessible toilet facilities are available at or near the workplace.

Daily Rest

Employees are entitled to at least 8 consecutive hours of rest between working days.

Weekly Rest

  • Employees are entitled to at least 36 consecutive hours of rest per week.
  • Typical weekly rest day: Saturday for Jewish employees; for non-Jewish employees, it is based on their customary weekly rest day (Friday, Saturday, or Sunday).

Overtime Limits

  • Maximum of 12 hours per day (including regular hours).
  • Maximum of 16 hours per week.

Overtime Compensation

  • On working days:

    • First 2 hours: At least 125% of the normal wage.
    • Beyond 2 hours: At least 150% of the normal wage.
  • On weekly rest days: At least 150% of the normal wage, or compensatory leave may be provided.

Exemptions from Overtime Compensation

  • Seafarers and fishery workers.
  • Aircrew members.
  • Employees in managerial or highly trusted positions.
  • Employees whose work and rest hours cannot be supervised due to the nature of their work or working conditions.

Leave

Annual Leave

  • Employer Type: Single employer.

  • Eligibility & Duration:

    • Within a working year with the same employer or workplace:

      • 1st–4th year: 14 days.
      • 5th year: 16 days.
      • 6th year: 18 days.
      • 7th year: 21 days.
      • 8th year onwards: +1 day per year, capped at 28 days.

  • If employment continues for the full working year:

    • ≥ 200 working days: Full annual leave as above.
    • < 200 working days: Pro-rata calculation.

  • If employment exists only part of the working year:

    • ≥ 240 working days: Full annual leave as above.
    • < 240 working days: Pro-rata calculation.
  • Note: Working year = 12-month period starting 1 April.
  • Allowance: Full wage, paid by the employer.
  • Cash-out: Full compensation for any unused leave prior to resignation.

Sick Leave

  • Eligibility: Employment with the same employer or workplace; submission of medical certificate required.
  • Entitlement: 1.5 days per month, pro-rated for incomplete months; maximum cumulative cap of 90 days.

  • Allowance:

    • 1st day: Unpaid.
    • 2nd–3rd day: Half pay.
    • 4th day onwards: Full pay, borne by employer.

Maternity Leave

  • Eligibility: Employment with the same employer or workplace; medical certificate required.
  • Duration: 12 weeks (up to 6 weeks may be taken before childbirth).

  • Extension/Reduction:

    • Maternal hospitalization (> 2 weeks): Up to 4-week extension; total leave ≤16 weeks; part exceeding 4 weeks may be excluded.
    • Infant hospitalization (> 2 weeks): Up to 4-week extension; total leave ≤16 weeks; part may be split after infant’s discharge.
    • Multiple births: +2 weeks.
    • Infant death: Can be shortened with doctor and employee consent; minimum 3 weeks post-childbirth.

  • Benefit:

    • Application: Submit to the National Insurance Institute (NII) of Israel; not automatic.

    • Payment:

      • Full benefit: Up to 15 weeks, subject to NII contribution of ≥10 months in 14 months before leave, or ≥15 months in 22 months before leave.
      • Partial benefit: Up to 8 weeks, subject to NII contribution of ≥6 months in 14 months before leave.

    • Extensions:

      • Multiple births: +3 weeks (full benefit), +2 weeks (partial benefit) per additional infant.
      • Maternal hospitalisation: Up to +4 weeks (full), +2 weeks (partial).
      • Infant hospitalisation: Up to +20 weeks (full), +12 weeks (partial).

Other Leave Types

  • Miscarriage/Stillbirth Leave:

    • Miscarriage: 7 days (deducted from sick leave), extendable up to 6 weeks on doctor’s advice.
    • Stillbirth: Rights equivalent to maternity leave for pregnancies ≥ 22 weeks.

  • Adoption Leave:

    • Eligible for children < 10 years.
    • ≥ 1 year employment: 26 weeks.
    • < 1 year employment: 15 weeks.
    • +3 weeks for each additional child adopted on the same day.
    • Allowance paid by national insurance.

  • Paternity Leave:

    • Up to 5 days.
    • First 3 days: Deducted from annual leave; last 2 days: deducted from sick leave.

  • Nursing Leave:

    • For full-time employees or those working ≥ 174 hours/month, breastfeeding within 4 months post-maternity leave.
    • 1 hour per day, paid.

  • Care Leave:

    • Deducted from annual/sick leave unless otherwise stated.
    • Caring for sick child (< 16): Up to 8 days/year if spouse employed; 16 days if sole custody.
    • Caring for seriously ill child (< 18): 90–110 days/year depending on employment and custody.
    • Caring for disabled parent: 18–36 days/year depending on spouse employment or custody.
    • Caring for disabled child (any age): 52 hours/year (not deducted from leave).
    • Caring for sick spouse: 6 days/year; seriously ill spouse: up to 60 days/year for ≥ 1 year employment.
    • Caring for sick parent/parent-in-law: 6 days/year if spouse employed.

  • Bereavement Leave:

    • Employees with ≥ 3 months employment.
    • Up to 7 paid days/year for death of immediate family (parents, children, spouse, siblings).

  • Military Leave:

    • Employees must notify employer and provide certification.
    • Entitled to reserve service compensation paid by national insurance.

Termination and Compensation

Notice Period

Monthly-paid Employees

  • Service period ≥ 1 year: 1 month.

  • Service period < 1 year:

    • First 6 months: 1 day per month of service.
    • Thereafter: 2.5 days per month of service.
    • Maximum: 3 weeks.

Daily/hourly-paid employees

  • 1st year of service: 1 day per month of service (up to 12 days).
  • 2nd year of service: 14 days + 1 additional day for every 2 months of service (up to 19 days).
  • 3rd year of service: 21 days + 1 additional day for every 2 months of service (up to 26 days).
  • Service period ≥ 3 years: 1 month.

If a longer notice period is agreed in the employment contract, the employee is entitled to that longer period.

Compensation

Eligibility Criteria

  • Minimum service requirement:

    • Regular employees: At least 1 year of continuous employment with the same employer or at the same workplace.
    • Seasonal employees: Employed for two seasons per year over two consecutive years.

  • Qualifying termination circumstances:

    • Dismissal by the employer.
    • Death or bankruptcy of the employer.
    • Death of the employee.

    • Employee resignation under recognised circumstances, including:

      • Material deterioration of working conditions.
      • Non-renewal of a fixed-term contract.
      • Lack of job security for seasonal employees.
      • Health reasons.
      • Resignation following childbirth.
      • Residence in a shelter for abused. women
      • Relocation.
      • Military or national service.
      • Election to a local government position.
      • Reaching retirement age.

Calculation Method

  • Compensation is calculated at 1 month’s salary per year of service.
  • For daily/hourly-paid employees, compensation is calculated on a pro-rata basis.
  • The salary used for calculation must not be lower than the statutory minimum wage.

BIPO as your Employer of Record

BIPO’s total HR solutions include our award-winning HR Management System, Global Payroll Outsourcing, Employer of Record service, and Athena BI.

As your EOR partner, our services are designed to provide a comprehensive, hassle-free experience:

  • Initial Consultation: The journey typically begins with an in-depth discussion to understand your specific business needs, ensuring our EOR services perfectly align with your objectives.
  • Payroll Management: We offer a streamlined payroll system that ensures timely and accurate salary disbursement, complete with statutory deductions and contributions in full compliance with Israeli regulations.
  • Contributions and Taxes: Our expertise in managing local social statutory contributions and local income tax ensures your business complies with Israel’s financial obligations.
  • Compliance with Working Hours: We guarantee that your employment practices adhere to Israel’s working hours standards, safeguarding your business against potential legal issues.
  • Leave and Paid Time Off Management: Implement and manage leave policies that comply with Israel’s laws, ensuring a fair and transparent leave management system for your employees.
  • Regulatory Compliance: Stay ahead of local labour laws and regulations with our up-to-date compliance services, minimising legal risks for your business.
  • Other services: Work visa, permit applications, termination procedures.

Services may vary across countries.

Benefits of BIPO Employer of Record Service in Israel

Unlock your growth potential with BIPO’s Employer of Record service in Israel. Our EOR service empowers businesses with seamless scalability while ensuring regulatory compliance.

From smooth onboarding to risk mitigation, BIPO handles the administrative HR tasks, enabling companies to concentrate on core business functions and accelerating growth. Our local expertise and global reach ensure efficient operations, enhancing flexibility and reducing operational complexities.

Stay up to date with the latest employment regulations.

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Frequently Asked Questions (FAQ)

An Employer of Record (EOR) is a partner company that acts as the official employer for your employees.

An EOR company handles all the HR aspects and processes, including the legal complexities associated with regulatory and tax compliance.

As your EOR, BIPO supports your organisation by providing a comprehensive range of HR, payroll and advisory services to ensure your business stays compliant. These include end-to-end on/offboarding services for your employees (e.g.: payroll processing, HR and benefits administration, labour contracts, visa applications, payroll/tax compliance, and more).

By engaging BIPO as your EOR, your business benefits from:

  • Compliance in the global markets where you operate
  • Reduced costs and risk mitigation
  • Overall workforce productivity, effectiveness, and efficiencies

A global EOR benefits organisations regardless of size or industry. It is especially useful for organisations that want to:

  • Scale their global business and be fully operational in foreign markets quickly
  • Reduce financial and HR complexities while expanding internationally
  • Minimise time spent trying to understand local labour laws and foreign tax systems
  • Stay compliant across global markets while reducing HR and administrative workflows
  • Benefit from a centralised and intuitive cloud HR platform to manage international teams

A global EOR enables businesses to fast-track their market entry into international market, and reduce the complexities of setting up multiple foreign entities.

When you partner with BIPO, we take on the the day-to-day administrative tasks, while you maintain full control of the business and delegate HR workflows and hiring needs.

Our vast network of business partners across 170+ markets globally supports your business expansion plans, with in-country HR experts providing localised support. Going global has never been easier!

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