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Located on the southeastern shore of the Mediterranean Sea and northern shore of the Red Sea, Israel (formerly known as the State of Israel) is a country in Western Asia. Hebrew is the official language, but Arabic is spoken throughout the country as well. Known for its well educated workforce, Israel is home to many medical research firms and is a world leader in stem cell research trials.

Employment contracts in Israel can be verbal or written. However, employers must provide employees written notice of employment terms no later than 30 days from the start date. The notice must include the commencement date, a description of the employee’s primary duties, the identity of the employee’s direct supervisor, the employee’s salary, the length of workdays, and workweeks. If concluded in writing, the employment contract should be in a language understood by the employee and include:

  • identification of the employer and the employee and addresses of both,

  • duration of the contract (if for a fixed term),

  • job description,

  • salary, payment date, method of payment, payment procedure during the employee’s absence, list of deductions from the salary for social security and income tax,

  • social benefits payments by the employer to the pension insurance (8.33% of monthly salary), provident fund payments,

  • dates the employment period starts and ends,

  • notice period,

  • probation period that does not exceed three months,

  • length of workdays, workweek, and daily/weekly rest, and

  • vacation, holidays, maternity leave and sick days.

A foreign employee is required to receive a permit to work in Israel through their employer.

The standard work period in Israel is 42 hours per week. Most employees work five days a week but can work six days a week. The working day for a five-day week (Sunday to Thursday) is 8.6 hours for four days and an additional day of 7.6 hours. Employees working a six-day workweek will work eight hours a day for four days, an additional day of seven hours between Sunday to Thursday, with an additional three working hours on Friday. Evening work should not exceed 58 hours per week, including overtime. Employees are entitled to a break of at least 45 minutes per workday and a brief break to conduct prayers at the workplace. Employees also receive at least 48 hours of rest per week, usually taken on Friday and Saturday. Overtime is limited to two hours a day and 16 hours per week. Employees cannot work more than 12 hours a day, including overtime. Overtime that is expected to exceed two hours per day and work that needs to be done during days of rest require a permit from the Ministry of Economy, Office of Work and Rest. The employer is required to report on how the overtime and days of rest permits are used to the Office of Work and Rest.

Employees in Israel receive 1.5 days of paid sick leave per month of service up to 90 days. Employees must provide a medical certificate signed by a doctor within three days of becoming ill. The certificate should include the employee’s name, identity number, and the estimated period of sickness. There is no payment for the first day, while days two and three are at half pay and fully paid from the fourth day onward. To calculate sick leave, pay, the employer must consider the salary, extra for seniority, extra for family additions, and increase in the cost of living. The employer must pay the sick pay at the time the employees’ wages are paid, provided that the employee gave the employer the sick certificate at least seven days before the due date of the salary payment. However, if the sick certificate was given to the employer after the salary payment due date, the employer must make the sick leave payment immediately after it received the sick certificate. Paid sick leave can also be used for childbirth, mourning, and illness. Employees may use sick days to care for close family members.

Female employees in Israel are entitled to 15 weeks of maternity leave if they have worked for their employer for less than 12 months, and 26 weeks after one year of service. Up to seven weeks of leave can be taken before the expected delivery due date, and the remainder is taken after delivery. A woman who gave birth to more than one baby in the same labor is entitled to extend the maternity leave beyond a 26 week leave by three weeks for each additional child born. The female employee can take unpaid maternity leave for up to 60 days after delivery. Employees will not receive a salary while on maternity leave but will receive benefits from Israel’s social security system if eligible. Generally, the female employee receives 15 paid weeks out of the 26 weeks of maternity leave while the remaining 11 weeks are unpaid. However, the length of paid weeks depends on the number of contributions made to the National Insurance preceding the maternity leave.

Bonuses are common in Israel.

Annual leave in Israel is calculated according to the number of years and the number of actual days worked per calendar year. Employees receive a base of 14 days of paid annual leave for a six-day workweek and 12 days for a five-day workweek. Paid leave requires a 14-day advance written notice. Untaken leave days are carried into the following year and settled every three years.

In Israel, the public holidays are:

  • Passover

  • Independence Day, also called Yom Haatzmaut

  • Shavuot

  • Rosh Hashanah (New Year)

  • Yom Kippur (Day of Atonement)

  • Sukkot (Feast of Tabernacles)

  • Shmini Atzeret/Simchat Torah

Victory Day and Fast of the Ninth of Av are considered holidays, but businesses remain operational, and employees are expected to work.

Israel’s health insurance system covers all residents. It is funded via special income-related health tax in combination with general government revenues. In this system, employers are required to enroll employees, including foreign workers. NHI service includes emergency care, preventive mother and child health services, and treatment of tuberculosis, HIV/AIDS and other sexually transmitted infections.

Either the employer or employee can terminate a contract of employment in Israel for ill health, personal, retirement, or any other reason. The retirement age is 67 years for male employees and 62 for female employees. The employee must notify the employer in advance of retiring. The employer must report to the tax authorities the end of the employee and employer relationship, detailing the:

  • working period,

  • salary for calculating severance pay,

  • amount of retirement grants and severance pay paid to the employee,

  • balance of severance pay, manager’s insurance policies and pension funds transferred to the employee’s ownership (if any), and

  • details of income tax amounts deducted by the employer from the compensation money.

The party that initiates termination is required to give 30 days notice if the employment relationship was over 12 months. If employment was less than 12 months, then the notice period is one day for each month of employment for the first six months of work, and 2.5 days for each additional month after the first six months. This means that the employee whose employment was 11 months is required to give written notice of their resignation 18.5 calendar days in advance. This notice period applies to the cases of a valid termination other than dismissal based on poor performance or the employee's civil or criminal wrongdoing.

  • Local Laws & Regulations

    We understand that local laws and regulations change and sourcing an accurate reference guide is not easy. Our data is researched and verified by our team of local international Employment Attorneys, HR and Benefit Professionals and Tax Accountants through our Atlas team and consultants, to ensure information up-to-date and accurate.

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    Partnering with Atlas when expanding into Israel can dramatically reduce the standard brick and mortar processes of doing business in foreign markets and allow you to focus on what you do best, growing your company! To discover more about how Atlas can simplify your ability to expand globally, please feel free to contact us.

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