Frequently Asked Questions

CWS Israel is an Employer of Record (EOR) in-country partner for global companies.

As a third-party organisation, CWS Israel specialises in hiring and paying employees on behalf of our clients while sharing responsibility for all formal employment tasks. Engaging with CWS Israel as your Employer of Record enables you to engage with local or expat workers in Israel in compliance with local employment laws without the need to establish a local entity or risk breaching your legal obligations. Review our pricing packages for our EOR services.

CWS Israel is an Agent of Record (AOR) in-country partner for global companies.

We’re your dedicated partner in Israel, working as your Agent of Record (AOR). We handle the hiring and payment of your contractors while ensuring everyone follows local rules. This means you can work with top Israeli contractors without worrying about setting up a local company or breaking local job laws. With CWS Israel, you get more than just a service. You get a trusted partner who makes HR and rules easy to understand and manage.

CWS Israel offers IC Compliance tests for the globe’s largest corporations, employing contingent staff in Israel. 

We conduct various tests to determine whether a worker can be classified as an Employee or as an Independent Contractor. 

At CWS Israel, we believe in having choices. 

We have two charging models, based on the client’s preference:

1. Fixed Fee
2. Percentage-based Fee

Of course, the services may differ between the two charging models, as described on our Pricing Page

The decision on which pricing structure would be best for your situation, will largely rely on the level of the employee and the complexity of their remuneration package.

Payments and Invoicing is a simple 4-step process:

1. We require salary input by the 8th of the month.
2.  An Invoice is then issued by the 10th of the current month.
3.  The invoice is paid within 14 days.
4. Employee gets paid during the first week of the following month. 

Following this timeline ensures smooth transfer of funds from the Client to the Employee, on time, every time. 

1. Advance Payment – CWS Israel issues an itemised monthly invoice in advance, for the month of Employees’ work.

2. Payment Clearance – Payment will be transferred and cleared in CWS Israel’s account within 14 days of Invoice.

3. Remittance Advice – The Client will issue Remittance Advice on the date of payment.

Our management fees are charged monthly, at the same time as the Employer Costs charge.

In addition, we charge a small Off-Cycle fee, for last minute (or later) changes in remuneration.

At the beginning of the engagement, we charge a deposit, which is equal to a one-month employment costs.

Since every employee situation is different, we need to look at their personal circumstances to ensure compliance.

In general, we need:

1. 2 forms of ID,
2. Work permits and visas, when applicable.
3. Complete forms for tax, social security, health and insurance authorities
4.  Detailed, and executed Employment Agreement, with a detailed Job description. 

Our system keeps track of all of the documentations, including expiration dates, and alerts us when things are about to expire and need to be renewed.

Onboarding new employees is a simple process, which includes asking for the following:

1. Personal details
2. Role details
3. Banking details
4. Copy of passport and / or local ID (Teudat Zehut)

We collect these details using our online onboarding tool. 

CWS Israel doesn’t charge Employees,  or hold any fee from the Employee. Our clients are the Employers (directly and indirectly)  and therefore we charge our clients a fee for our services. 

At CWS Israel, we pride ourselves on transparent and fair financial dealings. Employees and Contractors can expect a clear breakdown of their earnings, with a precise percentage of their gross wages going towards statutory contributions and our service fee. The exact percentage retained from their wages depends on various factors, including the individual’s salary, applicable tax rates, and agreed service fees. We provide personalised calculations to ensure either Employees or Contractors understand their net take-home pay, after all fees and taxes are accounted for, reflecting our commitment to radical transparency and integrity.

CWS Israel offers EOR solutions for white-collar, high-level employees. As such, on top of the standard (award rates) salaries, our clients and employees require additional benefits to be included in their compensation package. Some of the most common benefits are:

1. Education fund – very common for employees of all levels. It’s another form of pension/savings account for the employee, whereby the employee contributes 2.5% of their salary, and the employer adds 7.5% to that fund. see more details here – https://cwsisrael.com/education-fund-in-israel/
2. Meals – an allowance for meals is very common for the high-tech industry and professional services. it’s generally around the 1000 NIS per month and is given as a voucher/app.
3. Loss of income insurance – Employer contribution of 1% of salary.
4. Travel allowance – 400-800 NIS per month. when an employee has to travel for work, they are entitled to a travel allowance of 22.6 NIS per work day. That is mandatory for lower-level employees to pay for public transport.
5. Car Leasing – Higher level employees who generally drive to/from work, either get a leased car with all expenses paid, or a taxi allowance/reimbursement of expenses. Costs between 2000-3000 NIS per month, + an initial payment between 8000-13000 NIS. See some examples here – https://www.shlomo.co.il/car/מסלול_ליסינג_פרטי  (numbers in orange – monthly fee, number underneath – initial deposit).

Compensation (Severance Pay) charge is a mandatory charge for every employee. It is a mandatory insurance policy, taken by the employer as a form of a saving account, in case of  employment termination.  

We do not get to choose whether or not we put it aside, it is our obligation as employers to deposit 8.33% of the salary into a special purpose fund.

In some cases, the employee can receive the compensation funds when they resign, providing they’ve shown good conduct, and the employer agrees to release those funds to the employee. 

One of the most common questions we get asked, is how long is an employment contract for. 

In Israel, every employment contract is signed without an end date. It is an open ended contract, with only the starting date. 

Onboarding a new employee can be as quick as 48 hours. CWS’s process is very quick and efficient, yet to onboard someone new we require the cooperation of both client and employee. The following steps are required for a new employee onboarding:

1. Client provides employee contact details.
2. Client verifies all employment details (salary + perks)
3. CWS issues SOW
4. Client Signs SOW.
5. We send out an onboarding form 
6. Employee submits form with all relevant attachments.
7. CWS sends out an employment contract,
8. Employee signs contract
9. CWS Onboarding team completes onboarding onto our system (1 business day).
10. CWS onboarding team liaises with pension funds / insurance / other perks and benefit providers (1-2 days).

Of course!

Please consider the following requirements and associated costs:

1. Set up – Accounting and tax registration fees – 9,000 NIS + VAT (17%) – 10,530 NIS
2. Legal Set up costs – 12,000 NIS + VAT (17%) – 14,040 NIS
3. Registered office (including mail handling, and translation services when needed) – 7,500 NIS + VAT per month – 8,775 NIS
4. Director, company secretary fees –15,000 NIS per month gross salary. 
5. The Director will be a representative of the company for banking and government authorities. 

All costs include professional fees and applicable government fees. 

Compliance Considerations:

1. Payroll Tax – depends on the number of employees, on a progressive tax scale. 
2. Employer statutory expenses– Social Security (about 7%) and pension by law (about 12%), Pay sick leave, recovery allowance and vacation days upon termination of employer-employee relationship, various insurance policies.
3. All Employer Taxes obligation– Withholding income tax, withholding Social Security, withholding pensions, paying pensions, paying income tax and Social Security, paying Education fund.
4. Financial year – 1st of January to 31st December
5. Financial Auditor period– from company commencement date
6. Minimium capital– not required. 
7. Mandatory benefits – Pension contibutions, Sick days, vacation days, recovery fees, holiday gifts. This is a lot more complicated than that, and depends on the employee, place of work, industry, work conditions, and many other factors. 

1. National Insurance – equivalent to “social Security” in the US. 
2. Pension Contribution – Superannuation. a percentage of the salary deducted for pension. 
3. Compensation – this is a mandatory cost, which is collected by an insurance company (insurance companies also manage pension funds in Israel), which is designed to compensate workers when they get fired. 
4. Recuperation – the law in Israel provides an additional resource for workers to allow them to take a proper vacation – not just their holiday pay, but an additional amount to pay for hotel accommodation and additional activities. Sometime this is translated as “recovery”. 
5. Holiday pay – mandatory – holiday pay, minimum 12 days per year, 
6. Gifts – customary, 2 gifts per annum to employees given before the Jewish high holidays – Rosh Hashana (Jewish New Year) and Passover). 

In cases where an employee is injured or killed due to an act of terror, the compensation and benefits are determined under Israeli law, primarily according to the Compensation for Victims of Hostilities Law, 1970.

In the Event of Injury:

1. National Insurance Institute (NII) – An employee injured in a terror attack may be recognised as a victim of hostilities.

   • Compensation includes coverage for medical expenses, rehabilitation, and monthly payments in cases of partial or full loss of earning capacity.
   • Additional allowances may be granted for disabilities, depending on the percentage of disability determined by the NII’s medical committee.

2. Employer – The employer is generally not required to directly compensate the employee for injuries resulting from a terror attack. However, they may be obligated to pay wages for sick leave if the employee is entitled to it.

In the Event of Death:

1. Compensation for the Family –

   • If an employee dies as a result of a terror attack, the family is entitled to receive compensation from the NII.
   • This includes one-time payments and monthly allowances, based on the family composition and the employee’s earnings prior to the incident.

2. Employer –

   • The employer is not obligated to provide direct compensation in the event of death caused by a terror attack, as such incidents are considered external circumstances unrelated to the workplace.

Compensation Amounts:

The amounts of compensation vary depending on the nature of the injury, the victim’s circumstances (single/married, with children, etc.), and the employee’s earnings prior to the injury.

For specific details regarding the calculation of compensation and rights, it is advisable to consult a legal professional or contact the National Insurance Institute’s division handling victims of hostilities.