Overview

Capital
Jerusalem
Currency
New Shekel
Date Format
יי-חח-שששש‎ (am); dd-mm-yyyy (ce)

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Taxes

Employer
8.33% - Severance Pay
10.95% - Social Security and Health Insurance
6.50% - Pension Fund
2.50% - Disability Insurance
Employee
15.50% - Social Security and Health Insurance
6.00% - Pension Fund
10.00% - Up to 6,220
14.00% - 6,220 - 8,920
20.00% - 8,920 - 14,320
31.00% - 14,320 - 19,990
35.00% - 19,990 - 41,410
47.00% - 41,410 - 53,333
50.00% - Over 53,333

Termination

Termination Process
Employers must provide their employees with at elast 30 days notice. Employers can offer payment in lieu of notice.
Advance Notice
Advance notice for the first 6 months is 1 day of notice added for each month. After 6 months until the first year, 2.5 days of notice is added. After the first year, 30 days of notice is mandatory.
Severance Pay
Employer is responsible for depositing 8.33% of the employee’s monthly salary into severance fund. Employee receives the severance payment at the time of termination.

Minimum Wage

General
The minimum wage is 5,300 NIS per month.

Working Hours

General
Full time employment is considered 48 hours weekly.
Overtime
Paid at 150%-200% of regular salary depending on hours worked.

VAT

General
17% standard rate.

Payment

Payroll Frequency
Salaries are paid on monthly basis for work between the first and last day of the month by the 9th of the following month.

Mandatory Benefits

Pension Fund
The employer contributes 6.5% for the pension fund and up to 2.5% for disability fund. The employee contributes contributes 6% for the pension fund.
Social Security
The National Insurance Institute is responsible for the social security of the residents of Israel, and therefore guarantees basic subsistence to those unable to provide for themselves. Every resident of Israel is insured for healthcare under the National Health Insurance Law, through payment of monthly premiums to the National Insurance Institute (Bituach Leumi) for the share of income which is up to 60% of the average wage – NIS 5,678.