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* Playroll continues to analyse immediate opportunities and fulfilled roles by recruitment partners, contractors and employers to identify in-demand jobs.
Recognized as a "startup nation," Israel is renowned for its innovation, boasting the highest number of startups per capita globally. During the COVID-19 pandemic, it ranked 15th among 132 economies for increased innovation, according to the World Intellectual Property Organization's Global Innovation Index.
Israel excels in technology, housing major companies in its high-tech sector and possessing a well-developed network infrastructure. The Silicon Wadi region along the Israeli coast serves as a prominent global centre for high-tech industries.
With a highly educated workforce proficient in English, Israel is an appealing option for companies seeking remote employees. The country leads global rankings in easily finding employees with tertiary education and in-demand skills.
Employees in Israel benefit from a government-mandated 'recreation payment.' Additionally, a 17% VAT is obligatory on the total employment cost unless the team member has no business in Israel and does not engage with Israeli customers.
In Israel, providing a written employment contract is not a legal requirement, except when hiring a foreigner. However, employers are obligated to provide employees with a written statement in a language mutually understood by both parties. This statement functions as an employment notice, including details such as:
Israeli law permits probationary periods where employees have the status of regular employees in all respects. Mandatory probation lasts one day per month for the initial six months and then increases to two and a half days for each subsequent month of employment, with details specified in the employment contract or collective agreement.
In Israel, the standard workweek consists of 42 hours, with daily hours ranging from 7 to 9, depending on the number of workdays. The workweek runs from Sunday to Thursday, with Fridays and Saturdays as rest days. It is illegal to work more than 12 hours in a single day or accumulate over 16 hours of overtime in a week.
Extra hours worked beyond the regular workweek are paid as overtime and are regulated by the employment contract or collective agreements, requiring mutual consent from both the employer and employee. Compensation for overtime is 125.00% of the regular salary for the first two extra hours and 150.00% of the regular salary for hours worked on weekly rest days. Certain companies choose to offer a fixed monthly amount as compensation for overtime.
In Israel, a law has been enacted to progressively raise the minimum wage annually until the end of 2025, reaching 6,000 ILS by that point.
It is not a legal obligation in Israel to provide 13th-month salary.
In Israel, individual income tax rates vary from 10% to 50% and is subject to annual adjustments. The calculation follows progressive rates, and factors like marital status and the number of children can impact the overall tax rates.
Employees aged 20 and above contribute 18.5% to pension insurance (6% from the employee, 12.5% from the employer). To qualify for the old-age retirement pension, individuals must reach retirement age (67 years for men; 62-65 years for women), pass an income test, and have had continuous employer insurance contributions.
The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Israel tailored to your needs.
In Israel, ending an employee's contract requires a just process that considers valid reasons, legal obligations, the employment agreement, workplace standards, and any applicable collective agreements. Typically, a hearing is conducted to allow the employee to present their perspective before the employer makes a decision. Acceptable termination scenarios include:
The notice period duration in Israel depends on the employee's tenure. Upon termination, the employer must pay the salary for the notice period and other necessary amounts. The employee usually continues working during this period, unless directed otherwise. After the termination hearing, the employer may put the employee on garden leave, still compensating them for the notice period. The standard notice periods are as follows:
After completing one year of service, employees become eligible for severance pay, calculated by multiplying one month's salary by the total number of years of employment. Severance pay amounts to 8.33% of the salary for each year of service. The employer contributes to a Severance Fund monthly, and this fund is then released to the employee upon termination.
Israel has nine public holidays each year, and these are separate from the minimum paid leave entitlement. They are taken in addition to the regular annual leave. The following are the national holidays in Israel:
Legal and compliance experts are readily available to provide guidance and case-by-case Q&A support.
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