Israel

Employment

An agreement is provided to the employee within the first 30 days of employment stating the mandatory provisions.

Payroll

Salaries are paid on monthly basis for work between the first and last day of the month.
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Salaries must be paid by the 9th of every month.

HR & Labor

Working hours: Full time employment should not exceed 43 hours per week, 5 or 6 days. By Jewish law, employers must obtain a permit in order for their employees to work during Sabbath which is observed from Friday afternoon until Saturday night.
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For the first 2 hours of overtime, the compensation is 125% of the regular wages, for any additional hours it is 150% of the regular wages.

Immigration

Foreign employees must apply for B/1 visa at the Semech Unit of the Ministry of Interior. The employer must provide necessary paperwork as a sponsor for the employee.
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The minimum monthly wage for foreign experts has increased to 19,086 NIS Gross (up from 18,668)

Benefits

Employer is responsible for the transportation cost of the employees up to 22.6ILS per day. Employees working 1 year will receive 1,890ILS, 2-3 years will receive 2,268 ILS. (The amounts are determined by law annually).

2018 Update

Hourly workers are now entitled to work one less hour weekly.

Minimum Wage

The minimum wage is 5,000 NIS per month for a full time position (26.88 NIS/Hour) as of January 1st 2017.

Public Holidays

August 1: Ninth of Av Fast (not a public holiday)
September 21/22: Rosh HaShana (New Year)
September 30: Yom Kippur
October 5: Sukkot
October 12: Simchat Torah
December 13 - 20: Chanukah (not a public holiday)

March 1: Purim
March 31: Passover (begins)
April 7: Passover (ends)
April 19: Yom Haatzmaut (Independence day)
May 20: Shavuot
July 22: Ninth of Av Fast (not a public holiday)
September 10/11: Rosh HaShana (New Years)
September 19: Yom Kipur
September 24: Sukkot
October 2: Simchat Torah
December 3-10: Chanukah (not a public holiday)

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.

Severance Payments

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.

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.

Termination Procedure

The employer must provide the employee with at least 30 days notice. Employer can offer a payment in lieu of the notice.

Sick Days

Employer is responsible for 0% of the compensation if the employee is sick for 1 day. If they are sick 2-3 days, employer is responsible for 50% of the salary and over 4 days, 100% of the salary. Employees receive 1.5 days for each month of the employment. Maximum is 90 days.

Vacation Days

For a full time position of 5 days a week, an employee is entitled to 12 annual paid vacation days, during his first 5 years of employment.
From the 6th year and on- the entitlement increases.

Additional Employee Withholdings

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:
National insurance contributions - 3.45%
Health insurance contributions - 0%

For the share of income which exceeds the average wage, up to the maximum of NIS 43,240:
National insurance contributions - 7.50%
Health insurance contributions - 0%

For the share of income which is up to 60% of the average wage – NIS 5,678:
National insurance contributions - 0.40%
Health insurance contributions - 3.10%

For the share of income which exceeds the average wage, up to the maximum of NIS 43,240:
National insurance contributions - 7.00%
Health insurance contributions - 5%

Expat Benefits

In order to qualify for expat benefits, the employee must be non - Israeli tax resident who is in Israel lawfully. They were invited by an Israeli tax resident and during their stay in Israel they will be providing services in their specific field. If the employee meets the following requirements, they are entitled to the deductions such as for meals, living allowance, rent or lodging for the first 12 months of their stay.

VAT

VAT is 17% standard rate.