In Israel, employees are entitled to various forms of paid leave, including national holidays, annual leave (paid vacation), and sick leave. Understanding how holiday pay for employees is structured is essential for both employers and employees to ensure compliance with Israeli labor laws.
This guide provides a detailed breakdown of holiday pay regulations in Israel, covering public holidays, annual leave entitlement, compensation for working on holidays, and special considerations for sick leave and termination.
1. Public Holiday Pay in Israel
Employees in Israel are entitled to paid leave on public holidays if they fall on a scheduled workday. However, certain conditions must be met to qualify for this benefit.
Key Facts About Public Holiday Pay:
- Number of Paid Holidays: There are 9–10 official Jewish holidays per year, depending on the Hebrew calendar.
- Eligibility: Employees must complete at least 3 months of employment to be entitled to paid public holidays.
- Workweek Considerations:
- If the holiday falls on a non-working day (e.g., Saturday), there is no additional compensation.
- If an employee usually works on the holiday, they are entitled to either 150% pay (1.5x salary) or a replacement rest day.
- Overtime on Holidays: If an employee works extra hours on a holiday, they must receive 250% pay (2.5x salary).
List of Paid Public Holidays in Israel
- Rosh Hashanah (2 days)
- Yom Kippur
- Sukkot (First day)
- Simchat Torah
- Passover (First day)
- Passover (Seventh day)
- Independence Day
- Shavuot
- Purim (Applies mainly in Jerusalem and certain industries)
- Yom HaShoah & Yom HaZikaron (not official public holidays but often observed with early leave)
💡 Non-Jewish Holidays:
Muslim, Christian, and Druze employees may request paid leave on their respective religious holidays, depending on their employment agreement.
2. Annual Leave (Paid Vacation Days)
In addition to public holidays, employees in Israel are entitled to annual paid vacation, which is determined by seniority and workweek structure.
Annual Leave Entitlement (Minimum by Law)
Years of Employment |
Annual Leave Days |
| 1 Year | 12 Days |
| 2 Years | 14 Days |
| 3 Years | 15 Days |
| 4 Years | 16 Days |
| 5 Years | 18 Days |
| 6 Years | 19 Days |
| 7 Years | 21 Days |
| 8+ Years | 24 Days Max |
Calculation of Holiday Pay for Annual Leave
- Hourly Employees: Paid based on their average daily earnings over the last 12 months.
- Salaried Employees: Paid at their regular salary rate.
- Unused Leave: Employers must compensate employees for unused leave upon termination.
📌 Important: Employers cannot force employees to take leave but are required to encourage them to use their entitlement. Employees must take at least 7 consecutive vacation days per year.
3. Payment for Working on a Holiday
If an employee works on a public holiday, they are entitled to extra compensation:
| Work on Holiday? | Payment Entitlement |
| Regular Working Day on a Holiday | 150% of normal pay (1.5x salary) or a compensatory rest day |
| Overtime on a Holiday | 250% of normal pay (2.5x salary) |
💡 Example:
If an employee earns ILS 10,000 per month, their daily wage is approximately ILS 500 (based on a 20-day work month). If they work on a holiday:
- Regular holiday pay: ILS 750 (150%)
- Overtime holiday pay: ILS 1,250 (250%)
4. Sick Leave During Holidays
What happens if an employee falls sick during a holiday?
- No double compensation: Employees cannot claim both sick leave and holiday pay for the same day.
- Holiday does not count as sick leave: If an employee is sick during a holiday, it does not reduce their sick leave balance.
- Special cases: If an employee is hospitalized or critically ill, holiday compensation may be deferred to another working day.
5. Holiday Pay for Terminated Employees
If an employee is terminated or resigns with unused holiday leave, the employer must compensate them based on their last salary rate.
📌 Formula for Holiday Compensation at Termination:
(Number of unused vacation days) × (Daily wage rate at last month before termination)
💡 Example:
If an employee has 5 unused vacation days and their daily wage is ILS 600, they will receive:
5 × 600 = ILS 3,000 in compensation.
6. Special Cases & Industry Exceptions
Half-Day Work Before Major Holidays
On the day before certain Jewish holidays (Erev Yom Kippur, Erev Passover), most workplaces finish early:
- 5-day workweek employees may leave 3–4 hours earlier without pay deduction.
- 6-day workweek employees may leave 2 hours earlier.
Employer Discretion & Collective Agreements
- Some industries (tech, finance, international companies) offer more than the legal minimum for vacation or additional paid holidays.
- Employees under collective agreements or specific contracts may have extra benefits beyond labor law requirements.
Other Important Considerations
In addition to the standard regulations, certain situations may require special handling. Employers should be aware of the following factors:
✔️ Holiday Pay for Part-Time & Temporary Employees – Entitlements may be adjusted based on work schedule and contract terms. Part-time workers receive holiday pay only for days they are normally scheduled to work.
✔️ Industry-Specific Leave Policies – Some industries, such as education, finance, and high-tech, provide extended paid leave beyond legal requirements. Employees covered by collective bargaining agreements may have unique vacation and holiday entitlements.
✔️ Unpaid Leave & Holiday Pay – Employees on extended unpaid leave (such as maternity leave, personal leave, or unpaid sick leave) may not be eligible for holiday pay during their absence.
✔️ Religious Holiday Flexibility – Employees who observe non-Jewish holidays (Christian, Muslim, Druze, etc.) may be entitled to substitute public Jewish holidays for their own religious observances, based on their employment contract.
✔️ Holiday Pay for Shift Workers & Night Workers – Employees working non-standard hours may be subject to special pay rates if their shift extends into a holiday period. Employers should ensure holiday calculations align with their workforce structure.
✔️ Company-Mandated Closures – Some businesses enforce company-wide shutdowns during holidays (e.g., Passover, Sukkot, August vacation in some industries). In such cases, employers must notify employees in advance if leave will be deducted from their vacation balance.
✔️ Carrying Over Unused Vacation Days – Employers may allow or restrict rolling over unused vacation days to the following year. Employees should verify their contract terms to understand their entitlements.
Summary of Holiday Pay in Israel
| Type of Holiday Leave | Entitlement & Payment |
| Public Holidays | Paid leave if the holiday falls on a workday. |
| Annual Leave (Vacation) | Paid based on seniority (12–24 days per year). |
| Working on a Holiday | 150% pay (or a compensatory rest day). |
| Overtime on a Holiday | 250% pay. |
| Unused Leave at Termination | Must be compensated based on the last salary rate. |
Final Thoughts
Holiday pay for Employees in Israel is structured to ensure employees receive fair compensation while maintaining work-life balance. Employers must stay compliant with labor laws, while employees should be aware of their rights and entitlements.
If you have questions about holiday pay or need Employer of Record (EOR) services in Israel, CWS Israel is here to help. Get in touch today to ensure full compliance and smooth operations for your workforce.
