Quick facts

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Israel's economy is a highly developed, modern economy, with a strong technology sector. The country has a diverse labor market, with significant employment in fields such as high-tech, healthcare, and education. Employment regulations are in place to ensure workers' rights, including minimum wage laws, paid leave entitlements, and a national health insurance system.

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Employment Contracts

In Israel there are 3 types of employment agreements:

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• Fixed-term Employment Contracts
• Indefinite, Open-ended Employment Contracts
• Collective Bargaining Agreements (CBAs)

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Probation Period

New employees may work a probationary period ranging from 1 to 3 months, depending on the terms of their contract or collective agreement.

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Working Hours

A full workweek consists of 42 hours, typically Sunday through Thursday. Regular working days are 8.1 hours, with a 30-minute break.

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Vacation Days

• Employees working five days a week are entitled to 12 net vacation days for the first five years.
• From the sixth year onward: 14 net vacation days for the 6th year, 15 days for the 7th, 16 days for the 8th, and an additional day each year, up to 20 days after 12 years.

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Sick Leave

• For the first day of sick leave, employees are not paid.
• On the second and third days, employees are entitled to 50% of their regular pay.
• From the fourth day onward, employees are entitled to 100% of their regular pay.

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Wages and Salary Payment

• The payroll cycle is monthly, and salaries are paid no later than the 7th day of the following month.
• Minimum wage (since 2024): NIS 5,880 gross per month.

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Public Holidays

• There are 6 national holidays in Israel: Rosh Hashana (2 days), Sukkot (2 days), Yom Kippur, Passover (2 days), Shavuot, and Independence Day.
• There is no substitute holiday system, and holiday eves are typically half days for employees.

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Employer Taxes

• Employers contribute to Social Security, with contributions varying by income brackets.
• Employers also contribute to various funds like the pension fund (6.5%) and severance fund (8.33%).

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Employee Taxes

• Employees must contribute 6% to the pension fund and 8.33% to the severance fund.
• Contributions to National Health Insurance are deducted from employees' salaries.

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Notice Period

• For termination within the first year, the notice period is 1 day for each month worked, with a maximum of 6 days in the first year.
• After the first year, 30 days' notice is required for termination.

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Termination and Severance Pay

Severance pay is calculated at 1 month's salary for every year worked. If the employer contributes 8.33% of the salary to a severance fund each month, no additional severance is required upon termination.