Employment Service in Israel

If you are embarking on expanding abroad where you have not incorporated a legal entity yet, you will need our in-country Employer of Record (EOR) services to be able to hire employees fast and in a compliant manner. We make hiring an easy, effective and highly cost efficient experience and take on the burden of all administration. 

Your candidates get hired by Coberon Chronos’ PEO legal entity in accordance with local Labor Laws and can be onboarded in days by signing an employment contract we can provide in Spanish. The employed is eligible and assigned to work with and on your company’s behalf exactly as if he or she were your employee in-country. We prepare the monthly salary, benefits and allowances payroll based any timesheet provided and we calculate all expense reimbursement costs too.

Employment At a Glance

Hiring in Israel

Israeli labour legislation provides for minimum mandatory requirements, which cannot be waived by employees.

This legislation includes:
  • the Minimum Wage Law, which stipulates the minimum wage and is regularly updated;
  • the Wage Protection Law, which regulates the timing and methods of payment of salaries and permitted deductions therefrom, as well as providing penalties for breach;
  • the Hours of Work and Rest Law, which regulates employees’ working hours, overtime, night labour and rest days, as well the payment for each category of work;
  • the Annual Leave Law, which stipulates the minimum annual leave quota and regulates vacations generally;
  • the Sick Pay Law, which stipulates the minimum requirements with respect to paid sick leave;
  • the Severance Pay Law, which stipulates the entitlement for severance pay and the calculation thereof; and
  • the Advance Notice for Dismissal and Resignation Law, which stipulates the minimum requirements for notice before termination by the employer or employee.
Generally applicable expansion orders provide for 4 additional mandatory benefits, which also cannot be waived by employees:
  • reimbursement of travel expenses to and from the workplace;
  • national holidays;
  • convalescence pay; and
  • a pension scheme.

Employment contract in Israel

In general, Israeli law does not require an employment contract to be in writing and an oral agreement is legally binding. However, the Notice to Employee (Terms of Employment) Law obliges the employer to provide each employee with a notice of his or her main employment terms using a stipulated form. In addition, the Foreign Employees Law requires a foreign employee’s employment contract to be in writing, in a language known to the employee and including specific terms and conditions.
All statutory rights and mandatory benefits are implied into all employment contracts and supersede contractual stipulations. The provisions of any applicable collective bargaining agreement or extension order may also be implied into an employment contract.

Probationary period
The probation period can last 1 month, 6 months or 12 months as determined by a collective agreement or individual contract of employment. During this period, the employee’s aptitude for the job is assessed. A probation period may be extended in accordance with any extension conditions stated in the relevant collective agreement or individual contract of employment. In the course of a probation period, the employment may be terminated by a period of notice as stated in the extension order regarding notice periods.
Health Services And Insurance in the Israel
The employer deducts an additional 5% of your income for mandatory health insurance. If you buy private insurance, you will pay your insurance company for a separate, private coverage.
Pension Plans in the Israel
In Israel, the pension ages for men and women are 67 and 64, respectively. Israelis are entitled to a minimum monthly pension of 1350 shekels. If you move abroad, you may receive payments for six months after leaving Israel. For longer stays abroad, you must contact the National Insurance Institute.


Public Holidays and Vacation in Israel

The Annual Leave Law provides that an employee is entitled to 12 to 14 days’ paid annual leave on commencement of employment, increasing yearly according to the employee’s seniority to a maximum of 28 days. In addition, according to the generally applicable expansion order, all employees are entitled to nine paid public and national holidays.
Passover - on April 11.
7th day of Passover- on April 17.
Israel Independence Day – on May 2.
Yom Ha’Atzmaut
Shavuot - on May 31.
Remembrance Day - Tisha B’Av
New Year-Rosh Hashanah - on Sep 21-22.
Yom Kippur - September 30.
Succot  - on October 5.
Working hours, Overtime and Bonus payments in Israel
A typical working week in Israel runs from Sunday to Thursday and is 43 hours long. 
Accordingly, the regular working day of an employee employed for a five-day week (Sunday to Thursday) is 8.6 hours.
Employees employed for a six-day week will work eight hours a day from Sunday to Thursday, with an additional three working hours on Friday.
Any working hours in excess of the regular daily hours (ie, more than eight or 8.6 hours per day) and/or in excess of the regular weekly hours (ie, more than 43 hours) are considered overtime.
Generally, the Hours of Work and Rest Law forbids overtime. However, a general permit issued by the Labour Ministry permits overtime, subject to the following restrictions:
  • Employees working a six-day week cannot be employed for more than four hours of overtime per day and 12 hours of overtime per week.
  • Employees working a five-day week cannot be employed for more than four hours of overtime per day and 15 hours of overtime per week.
Sick Leave in Israel
The Sick Pay Law entitles employees to 18 sick days per year, up to a maximum of 90. The pay for sick leave is as follows:
  • for the first day, employees are not entitled to remuneration;
  • for the second and third days, employees are entitled 50% of their salary; and
  • from the fourth day onwards, employees are entitled to 100% of their salary.
Sick leave pay is subject to a medical certificate and, unlike vacation days, accrued and unused sick days are not redeemable.
Employees are entitled to use a proportion of their accrued sick days for the illness of a child, parent or a spouse, all subject to certain requirements specified under law.
Male employees are entitled to use up to seven sick days for a spouse’s pregnancy check-ups or the birth of a child.
Maternity/Shared Parental Leave in the Israel
Mothers are entitled to two months of paid maternity leave, provided by the paid insurance premiums prior to their maternity. Fathers may also have a shorter paid paternity leave.
Termination of the Employment Contract and Severance in Israel
The Advance Notice for Dismissal and Resignation Law requires both employers and employees to give notice. The length of the notice period is set according to the duration of employment, with a maximum of 30 calendar days.
  • One day during the first six months
  • 6 days plus and additonal 2,5 days for every month worked between 7-12 months of employment
  • 30 days after one year
Employment Taxes in Israel
The tax rate is progressive for Israeli residents. There are different tax rates for income that is derived from personal exertion and for income that is derived from any other source in the state of Israel.

Income tax is calculated by applying a progressive tax rate schedule to taxable income.
The tax rates for personal exertion income are as follows.

Income tax table simulation:
Taxable Income From:  
Taxable Income To:        Total tax on income:     Tax rate on income  
 0  74,640  7,464 10%
 74,641  107,040  6,216 14% 
 107,041  171,840  12,448.8 20% 
171,841 238,800 22,096.8 31%
238,801 496,920 88,168.8 35%
496,921 640,000 147,168 47%
640,000 Over   50%


These rates will also apply to all income earned by an individual of age 60 or over, other than income for which a specific rate is provided. The tax rates for income of an individual under the age of 60 from any other source are as follows (excluding incomes with specific tax rates).

Income tax table simulation:
Taxable Income From:   Taxable Income To:        Total tax on income:     Tax rate on income 
 0 237,600 73,470 31%
237,601 496,920 88,168.8 34% 
496,921 803,519 147,168 48% 
803,520 < 238,800   50%


Social security payments are subject to a monthly cap of I.S. 43,240 (2016). The top rates are: by Employer 7.5%, by Employee 12.0%


Why Coberon Chronos?

Hiring any number of employees in Israel can be time consuming, expensive and complex without the extensive knowledge of the local Labor Code but mostly to apply it to the best practices.

Coberon Chronos can help your business to hire your candidates, handle all the hiring administration and payroll and ensure that you’re in compliance with local labour laws, without the burden of setting up a large office or subsidiary abroad in a rush.Our Global Employer of Record and PEO services lets you focus on running your key business in a new country.
If you have an immediate EOR needs or just wwant to discuss how CoberonChronos can provide a seamless temporary workforce or PEO solutions for hiring employees in Israel, please contact us at


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