Israel

• Purim (Tel Aviv only)
• Shushan Purim (Jerusalem only)
• Passover (begins)
• Passover (ends)
• Yom HaAtzmaut
• Shavuot
• New Year (Rosh HaShana)
• New Year (Rosh HaShana)
• Yom Kippur
• Sukkot
• Simchat Torah

Working Hours

The standard work week is 42 hours from Sunday to Thursday. As a result, an employee working a five-day week (Sunday through Thursday) would work 8.6 hours on four days and 7.6 hours on the fifth day. Employees paid for a six-day work week will work 8 hours a day for four days of the five-day week, with one of those days being seven hours and an additional three hours on Friday.

The compensation for the first two overtime hours is at a rate of 125% of the salary, and for each additional hour of work and work performed during the week and rest days shall be compensated 150% of the salary.

Minimum Wage

Minimum salary: NIS 5,400.00 per month (NIS 29.03 per hour).

The minimum salary is expected to rise in April 2023 and reach NIS 6,000.00 monthly by December 2025.

Employee Tax

Annual income	Tax rate
Up to ILS 81,480	10%
ILS 81,481 - 116,760	14%
ILS 116,761 - 187,440	20%
ILS 187,441 - 260,520	31%
ILS 260,521 - 542,160	35%
ILS 542,161 - 698,280	47%
More than ILS 698,280	50%
National insurance contribution*	0.4% - 7%

*Actual amount depends on the employee’s salary.

Bonuses

Discretionary benefits can include a bonus of a 13th-month salary, a performance bonus, and other benefits such as a company car, mobile phone laptop, etc.

In Israel, employment agreements do not have to be in writing. Although, a written contract is required, if the employer is a manpower agency or the employees are foreign nationals.

However, the Labour Law mandates that employers must give the employee a notice in accordance with a predetermined form that includes the following information:

• Information about the employer and the employee (name, address, and ID number)
• The start date of the job
• Length of service
• Position and primary responsibilities
• Direct manager
• Salary
• Hours worked each day and each week
• Days off
• Social payments and benefits
• Information about (and contributions to) the pension fund
• Any collective bargaining agreements that may be relevant

Typically, there are two types of contracts: fixed-term contracts for a specified time, or activity and indefinite period agreements for permanent employment.

Annual Leave

Leave entitlement is 14 days for six working days in the first two years. Leave entitlement is 12 days, for five working days in the first two years. Leave days can be carried over for up to two years. Vacation time increases with the length of service.

Seven mourning days can also be taken with the passing of a close relative.

Sick Leave

The law provides for one and a half days of sick leave for every month of employment, with a maximum of 90 days.

Employees get paid 37.5% of their salary from the second sick day and 75% starting the fourth day.

Some industries provide remuneration from the first day of taking sick leave.

Parental Leave

• Maternity leave: 15 weeks for less than 12 months' employment service and 7.5 weeks for 6-10 months' employment service. Half of the maternity leave can be scheduled before the childbirth.
• Paternity leave: After the mother has taken maternity leave for at least six consecutive weeks following the birth and the father's leave is at least 21 days, the father can take the mother's place if it is mutually agreed.

Termination Process

If there is no collective bargaining agreement in place, employers in Israel are free to terminate a contract as long as they have cause and adhere to a fair internal procedure.

It includes holding a hearing, where the employee can speak out against the potential dismissal.

The employer must give the employee written approval with the start and end dates, and the employee must receive this approval no later than 15 days following the last day of employment.

The employee may apply to the labour office if the employer does not provide the approval. The employer's refusal is a criminal felony and may lead to a fine.

After the employment ends, the employee has up to 7 years to file a claim with the Labour Court.

For employees paid monthly, the minimum legal notice requirements are one day during the first six months of employment, 2.5 days during the next six months, and 30 days following the end of the first employment year.

The employment agreement notice period takes precedence when considering legal notice.

Also, annual leave cannot be taken during the notice period.

Severance Pay

The amount of severance pay depends on the grounds for termination and the length of employment. A collective bargaining agreement may also govern severance pay.

Severance pay may be denied in severe cases of misconduct.

If approved, severance pay is paid out within 30 days of termination if the employee is eligible.

Under a Mauve Group Employer of Record solution, clients and workers can reap the benefits of Mauve’s Global Master Insurance Programme – a market-leading unified corporate insurance programme that connects all Mauve entities to its two preferred providers.

The insurance provides coverage in overseas locations through a combination of the master policy and its linked local policies, where required by law in certain jurisdictions. The policies include:

• Employer’s Liability and Public Liability - £10,000,000 combined limit.
• Professional Indemnity - £5,000,000 limit.
• Worker’s Compensation – Limit is dependent on location of work.

For specific information about statutory and recommended insurances in your chosen country, get in touch with Mauve.