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Your Complete Guide to
Hiring in Israel
Everything you need to know about Israeli employment law, costs, and compliance — in one place.
Everything About Israeli Employment
Navigate Israel's employment framework with confidence. Select a topic to explore.
Types of Employment
- Permanent employment — indefinite contract, most common form
- Fixed-term contract — defined start and end date, requires justification
- Part-time employment — pro-rated entitlements, same statutory protections
- Independent contractors — different legal status; misclassification is a major risk
Working Hours & Overtime
- Standard week: 42 hours/week over 5 or 6 days
- Max daily: 8.6 hours (5-day week) or 8 hours (6-day week)
- Overtime rate: +25% for first 2 overtime hours/day
- Overtime rate: +50% for each hour beyond that
- Employers must maintain detailed timesheets
Notice Periods
- First 6 months: 1 day notice per month worked
- Months 7–12: 6 days + 2.5 days for each month beyond six
- After 1 year: 1 month notice (standard)
- Notice must be in writing
- Employer may pay in lieu of notice
Probation Period
- No statutory probation in Israeli law
- Collective agreements typically allow 3–6 months
- Employer can extend trial period fairly under defined conditions
- Probationary employees still receive full statutory protections
📌 Key fact: Israeli employment law applies to all workers in Israel regardless of nationality. Statutory minimums cannot be waived — only improved upon by contract.
| Benefit | Rate / Amount | Notes |
|---|---|---|
| Pension (employer contribution) | 6.5% of salary | Mandatory since 2008 reforms |
| Severance reserve | 8.33% of salary | 1 month per year of service |
| Annual Leave | 12 days minimum (increases with tenure) | Increases with tenure |
| Sick Leave | 18 days/year | 1.5 days per month, max 90 days accrued |
| Recuperation Pay (Dmei Havraa) | NIS 2,200+ per year | Paid once a year; varies by sector |
| National Insurance (Bituach Leumi) | 4.51%–7.6% | Employer portion; covers health, unemployment |
| Education Fund (Keren Hishtalmut) | 7.5% employer / 2.5% employee | Not mandatory but widely expected |
| Travel Allowance | Up to public transport cost | Mandatory for commuting employees |
Total On-Cost Estimate
- Mandatory on-costs: approximately 30–40% on top of gross salary
- Budget NIS 1.3–1.4 for every NIS 1.0 of gross salary
- Use our Employer Cost Calculator for a precise figure
Common Optional Benefits
- Supplementary health insurance (above Kupat Cholim)
- Meal card (Cibus/Card de Lunch) — very common in tech
- Company mobile phone or allowance
- Remote work equipment budget
- Annual bonus / equity / RSUs
Job Advertisements
- Equal Opportunity Law 1988 applies — no discriminatory ads
- Must not specify protected characteristics (gender, religion, origin)
- Job title must be non-gendered in Hebrew job posts
Employment Agreement Requirements
- Must be in writing within 30 days of start date
- Must include: position, salary, working hours, leave entitlement
- Must reference applicable collective agreements
- Cannot waive statutory minimums
Onboarding Documentation
- Israeli ID (Teudat Zehut) or passport copy
- Bank account details for salary transfer
- Tax status form — Tofes 101 (annual tax coordination)
- Pension fund selection / transfer form
- Previous employer certificate (Tofes 161)
Probation Period Practices
- Typically stated in the employment contract
- 3 months common; up to 6 months for senior roles
- Performance reviews recommended at 30, 60, 90 days
- Dismissal during probation still requires documented cause
Notice Periods (Recap)
- Under 6 months: 1 day per month worked
- 6–12 months: progressive scale
- Over 1 year: 1 full month notice
- Can be paid in lieu — employee gets full month salary
Severance Pay
- 1 month salary per year of service
- Applies after 12+ months of employment
- Based on last month’s gross salary
- Pension contributions may offset severance liability (Tzav 8)
Pre-Dismissal Hearing (Shimua)
- Mandatory before any dismissal decision is final
- Employee must be notified of intended reasons in advance
- Employee has right to respond and bring a representative
- Written record of hearing must be kept
- Skipping this step risks claims of wrongful dismissal
Special Protections
- Pregnant employees: require Ministry of Labor approval to dismiss
- Employees on maternity/paternity leave: cannot be dismissed
- Union members: additional collective agreement protections may apply
- Employees on sick leave: restrictions on dismissal during leave
⚠ Important: Final settlement must include outstanding salary, unused vacation pay, severance (if applicable), recuperation pay, and Tofes 161 (employment certificate). Errors in final settlements are one of the most common sources of labor disputes in Israel.
Who Needs a Work Visa?
- All non-Israeli citizens working in Israel
- Dual citizens of Israel are exempt
- New immigrants (Olim) receive an A5 visa with work rights
- Business visitors cannot work on tourist visas
B1 Expert Work Visa
- Most common visa for foreign professionals
- Requires employer sponsorship — CWS can be the employer of record
- CWS Israel handles B1 applications — fee: NIS 28,000/year
- Valid up to 12 months; renewable annually
- Processing time: typically 6–12 weeks
A5 Visa for New Immigrants (Olim)
- Granted to Jewish immigrants under the Law of Return
- Provides immediate work rights in Israel
- Tax benefits for first 10 years of residency
- CWS supports Olim onboarding — see our Olim First Steps service
B1 Application Requirements
- Verified certificate of good conduct
- Medical certification (tuberculosis, hepatitis, AIDS)
- Completed visa application form + 2 passport photos
- Employer commitment letter and explanation of need
- Proof of valid medical insurance
- Salary at or above the Ministry of Interior threshold
💡 CWS Israel tip: Start the B1 visa process at least 3 months before the intended start date. We manage the entire end-to-end application process as part of our EOR service. Contact us at raz@cwsisrael.com to get started.
Key Israeli Employment Laws
Israel’s employment landscape is governed by a layered legal framework built on foundational statutes.
Hours of Work and Rest Law
Sets the 42-hour work week, defines daily maximums (8–9 hours), mandates overtime premium rates (25% and 50%), and requires employers to maintain timesheets. The cornerstone of working-hours regulation in Israel.
Annual Leave Law
Guarantees minimum paid vacation — starting at 10 days/year and increasing with tenure. Employers cannot pay out unused leave in lieu of actual time off (except on termination). Leave is a protected right, not a benefit.
Equal Opportunity in Employment Law
Prohibits discrimination in hiring, promotion, training, or dismissal based on gender, religion, nationality, origin, age, disability, family status, or sexual orientation. Applies to all employers regardless of size.
Why Companies Use Employer of Record in Israel
Israel’s compliance complexity makes EOR the fastest and safest route to market for most international companies.
- 1
No Israeli Entity Required
CWS Israel is the legal employer. You avoid the cost and 6–12 month timeline of setting up an Israeli company, plus ongoing accounting and legal obligations.
- 2
Compliance Complexity Is Handled
Israeli labor law, pension regulations, National Insurance, tax withholding — CWS manages all of it, backed by PwC-verified 100% compliance since 2014.
- 3
Cost Efficiency
EOR at $599/month (Essential Boutique) or 9.5% of total employer cost (Premium Boutique) is significantly cheaper than establishing and running a local entity with in-house HR and legal staff.
- 4
Speed to Hire
Onboard an employee in Israel within days, not months. Secure your candidate before they accept another offer — no entity setup delay.
Simple, transparent fees
Fixed monthly fee. Great for stable headcount.
Scales with salary. Includes full-service support.
Start With the Right Tool
Use our free resources to calculate costs, assess contractor risk, or get expert advice.
IC vs Employee Calculator
Assess the misclassification risk of your independent contractors in Israel. Get a compliance score instantly.
Run the CalcEmployer Cost Calculator
Enter a gross salary and instantly see total employer cost including all mandatory contributions and levies.
Calculate NowExpert Advice
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Contact CWSReady to Hire in Israel?
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