Dmei Havraah Recovery Pay Israel: 2026 Employer Guide

What Is Dmei Havraah Recovery Pay in Israel?

Dmei Havraah recovery pay is a mandatory annual payment that Israeli employers must make to every employee who has completed at least one year of service. It is calculated by multiplying a fixed daily rate, set nationally each year, by a number of recovery days that increases with the employee seniority. It is a statutory entitlement, not a bonus, and it cannot be waived by agreement between the parties.

The benefit is often translated as convalescence pay or recuperation pay. Its origin is historical: it was introduced so that workers could afford a rest or a holiday, and the daily rate was once tied to the cost of a night at a convalescence home. That link disappeared long ago. As of 2026 the payment is simply cash, paid through payroll, and the employee is under no obligation to spend it on a holiday or to prove that any rest was taken.

What makes Dmei Havraah unusual for a foreign employer is its legal source. It does not sit in the Israeli statute book alongside severance pay or annual leave. It comes from a general collective agreement between the Histadrut labour federation and the employers organisations, which the Minister of Labour then extends to the whole private sector by an extension order under Section 25 of the Collective Agreements Law, 1957. The practical effect is identical to legislation: once the extension order is published, the rate binds essentially every private-sector employer in Israel, including a foreign company employing a single person remotely.

That legal route is precisely why the obligation is so often missed. A company reviewing Israeli employment law will find the Severance Pay Law and the Annual Leave Law, satisfy itself that it has covered the statutory ground, and never encounter the extension order that creates this liability. For a detailed view of how the individual obligations combine into a single headcount figure, see our Israeli employer cost calculator.

The 2026 Dmei Havraah Rate and What Changed

For the 2026 recovery year the private-sector daily rate is NIS 451.50, up from NIS 418. That is an increase of roughly eight percent, agreed in a general collective agreement signed on 22 June 2026 between the Histadrut and the Presidency of the Business Sector. An extension order applying the new rate across the private sector was published in August 2026, and the agreement runs until 30 June 2027.

The rate applies to the private sector. Public-sector employees, employees whose pay is linked to public-sector wage agreements, and employees of sheltered workshops fall outside this extension order and are governed by their own arrangements. If you are a foreign company employing commercial or technical staff in Israel, the private-sector rate is the one that applies to you.

Two points deserve attention from anyone budgeting for 2026. First, the increase is retrospective in effect for the recovery year in question, so an employer who paid at the old rate earlier in the year may have a shortfall to settle. Second, because the rate is revised periodically rather than on a fixed annual cycle, a budget built on last year assumption will drift. Employers who run Israeli payroll in-house from abroad are the most exposed to this, because nothing in their payroll system prompts them to check for a new extension order. Our Israel payroll outsourcing service applies rate changes on the run they take effect.

The authoritative public reference point for Israeli employment rights, including this one, is the Kol Zchut rights portal maintained in Hebrew, and the National Insurance Institute publishes the wage benchmarks that sit alongside it at the Bituach Leumi English portal.

How Many Recovery Days Does Each Employee Earn?

Entitlement begins only after the employee has completed twelve months of continuous service with the same employer. From that point the number of recovery days rises in steps according to seniority, and the annual payment is the number of days multiplied by the daily rate. An employee in their first year receives nothing under this heading, which is why the obligation frequently surprises a company whose Israeli team has just passed its first anniversary.

The private-sector scale as of 2026 is set out below, with the annual value calculated at the NIS 451.50 rate for a full-time employee.

Years of Service	Recovery Days Per Year	Annual Value at NIS 451.50 Per Day
Under 1 year	0	No entitlement yet
Years 1 to 3	5 days	NIS 2,257.50
Years 4 to 10	6 days	NIS 2,709.00
Years 11 to 15	7 days	NIS 3,160.50
Years 16 to 19	8 days	NIS 3,612.00
Year 20 and beyond	10 days	NIS 4,515.00

Part-time employees receive a proportionate entitlement. An employee working a sixty percent schedule with three years of service earns five days at sixty percent, which is three days, or NIS 1,354.50 at the 2026 rate. Some collective agreements and personal contracts improve on this scale, and where they do, the more favourable term governs. The scale above is the floor, not the ceiling.

How to Calculate Dmei Havraah: Four Worked Examples

The calculation is straightforward once the three inputs are known: seniority, employment percentage, and the current daily rate. Multiply the recovery days for the employee seniority band by the daily rate, then multiply by the employment percentage. The examples below use the 2026 private-sector rate of NIS 451.50.

Example 1: A full-time engineer, two years of service

Two years of service places the employee in the five-day band. Five days multiplied by NIS 451.50 gives NIS 2,257.50 for the year, paid in full because the employee is full-time.

Example 2: A part-time finance manager at 50 percent, five years of service

Five years places the employee in the six-day band. Six days multiplied by NIS 451.50 is NIS 2,709.00, and at a fifty percent schedule the entitlement is NIS 1,354.50.

Example 3: An employee who leaves after eighteen months

The employee passed the twelve-month threshold, so entitlement exists and is pro-rated for the partial year. For the six months worked into the second year the employee earns half of the five-day band, which is 2.5 days, or NIS 1,128.75, payable on termination together with any unpaid balance from the completed first year.

Example 4: An employee who leaves after ten months

No entitlement arises. The twelve-month qualifying period was not completed, and Dmei Havraah is one of the few Israeli entitlements with a genuine service threshold rather than immediate accrual from day one.

Employers commonly ask whether the figure should be grossed up for tax. Dmei Havraah is taxable income in the employee hands and is subject to income tax and National Insurance in the ordinary way. It is not, however, included in the salary base used to calculate severance pay or pension contributions, which is a meaningful distinction when modelling total cost.

When You Must Pay, and What Happens on Termination

There is no single statutory payment date, and this is where practice diverges. Most Israeli employers pay Dmei Havraah once a year as a lump sum, typically in the summer months between June and September, which reflects the historical purpose of the payment. A minority spread it across twelve monthly instalments shown as a separate payslip line.

Both approaches are acceptable provided the annual total is correct and the payment is identified clearly on the payslip. What is not acceptable is folding the amount silently into gross salary. Israeli labour courts have consistently treated an undifferentiated salary as failing to discharge the obligation, on the reasoning that an employee cannot verify a payment they cannot see. An employer who absorbs the sum into base pay may find itself ordered to pay it a second time.

On termination the accrued balance becomes payable immediately, pro-rated for the part-year worked, and it is standard practice to settle it in the final payslip alongside unused annual leave and any severance due. A frequently litigated point is the lookback period: an employee who was never paid Dmei Havraah can generally claim the shortfall for the last several years of employment, not merely for the final year. The cumulative exposure across a team that has been under-paid for several years is therefore materially larger than one year of underpayment suggests.

If you are approaching a termination and want the numbers checked before the conversation happens, our employer of record service in Israel covers final-settlement calculations as part of the standard engagement.

Where Dmei Havraah Sits in Your Total Israeli Employer Cost

Dmei Havraah is not the largest line in the Israeli on-cost stack, but it is the one most often omitted from a foreign company first budget. The table below places it beside the other mandatory employer obligations so the relative weight is visible.

Employer Obligation	2026 Basis	Commonly Missed By Foreign Employers
Dmei Havraah recovery pay	NIS 451.50 per day, 5 to 10 days by seniority	Very often, because it is not in the statute book
Pension contributions	6.5 percent employer, 6 percent employee	Sometimes, particularly the month-six trigger
Severance component	8.33 percent of salary set aside	Rarely, it is widely documented
Bituach Leumi employer share	4.51 percent on the lower salary band, 7.6 percent above it	Rarely, but the two-band structure is often mis-modelled
Annual leave	Statutory minimum rising with seniority	Sometimes, where home-country policy is applied instead

For a company weighing a local entity against an employer of record arrangement, obligations of this kind are the argument for the latter. They are individually small, collectively significant, and they change on a schedule nobody outside Israel tracks. A comparison of the two routes and the point at which the economics reverse is set out in our guide to setting up a company in Israel, and current engagement costs are published on our EOR pricing page.

How CWS Israel Handles Dmei Havraah for Foreign Employers

When CWS Israel acts as employer of record, Dmei Havraah is administered as part of the standard payroll cycle and appears as a discrete line on every payslip. Seniority is tracked from the employee start date, the entitlement is recalculated whenever a rate change is published, and the accrued balance is reported to the client each month so the liability is visible before it falls due rather than after.

The engagement itself is deliberately light. CWS Israel does not issue employment contracts. We send a quote setting out the conditions of employment and linking to our terms and conditions, the client or freelancer accepts that quote, and we then register the employee for payroll, Bituach Leumi and health tax. Onboarding completes within 48 hours in the ordinary case.

What this removes is the monitoring burden. A foreign company running Israeli payroll from abroad has no mechanism that tells it an extension order was published in August, and the first signal is usually a claim or an audit finding. Our compliance framework is reviewed annually by PwC, CWS Israel has worked in Israeli contingent workforce management for twelve years, and we are a member of Staffing Industry Analysts. Service is delivered in English first, with support available in Hebrew, Russian and Arabic.

Common questions about scope, notice periods and termination mechanics are collected in our employer of record Israel FAQ.

Frequently Asked Questions

How much is Dmei Havraah in Israel in 2026?

The private-sector rate for 2026 is NIS 451.50 per recovery day, increased from NIS 418 under a collective agreement signed in June 2026 and extended to the private sector in August 2026. An employee with two years of service earns five days, which is NIS 2,257.50 for the year. Public-sector rates are set separately.

Is Dmei Havraah mandatory for a foreign company employing one person in Israel?

Yes. The extension order applies across the private sector regardless of where the employer is incorporated or how many people it employs in Israel. A single Israeli employee who has completed twelve months of service is entitled to the payment. CWS Israel administers this automatically for clients using its employer of record service.

Can Dmei Havraah be included in the gross salary instead of paid separately?

No, not safely. Israeli labour courts have repeatedly held that an amount absorbed into undifferentiated gross salary does not discharge the obligation, because the employee cannot verify it. The payment must appear as an identifiable line on the payslip. Employers who fold it into salary risk being ordered to pay it a second time.

Does an employee who resigns still get Dmei Havraah?

Yes. Entitlement does not depend on who ended the employment or why. Provided the employee completed at least twelve months of service, the accrued balance is payable on termination, pro-rated for any partial year. It is normally settled in the final payslip alongside unused annual leave.

How far back can an employee claim unpaid Dmei Havraah?

An employee who was never paid can generally claim a shortfall covering several years of employment rather than the final year alone. Across a team that has been under-paid since inception the cumulative exposure is therefore much larger than a single year suggests, which is why a backward-looking check is worth running before it surfaces in a claim.

Do part-time employees in Israel receive recovery pay?

Yes, on a proportionate basis. An employee working a fifty percent schedule receives half the days their seniority would otherwise earn. At the 2026 rate, a fifty percent employee with five years of service receives three days, which is NIS 1,354.50 for the year.