Hire in Israel

Israel PEO &

Employer of Record

Hire & manage teams remotely in Israel without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.

    Business Language

    Hebrew, English

    Salary Currency

    New Shekel (ILS)

    Payroll tax

    20.88% - 24.33%

    Payroll Cycle


    Time zone

    UTC +3

    Capital city


    Hire Employees in Israel

    NNRoad provides employer of record (EOR)professional employment organization (PEO) services to ensure that your business in Israel complies with local labor laws and regulations. We process monthly payroll and act as the Employer of Record, taking on all local employer liabilities.

    The NNRoad Advantage ☺

    Pay as you go

    No set-up or overhead costs to global expansion.

    Global account manager

    One point of contact for all of our 50+ serviced countries and regions.


    Ensured compliant contracts and operations.

    Fast Onboarding

    Start working with your remote employees/contractors within a week.

    Foreigner Visas

    NNRoad assists with overseas foreign hires visa needs.


    Access your payroll reports and employee pay stubs on our portal.

    Employer of Record in Israel

    Employer of Record (EOR) services are for companies who do not have a legal entity in Israel, but who want to hire localy. Employment and full liability are outsourced to NNRoad.


    Candidate Selection

    You interviews & select the candidates you want to hire in Israel.


    Employee Onboarding

    We sign a local labor contract with your employees based in Israel.


    Compliance & Payroll

    We manage monthly payroll, mandatory benefits & all HR compliance in Israel.


    Payroll Reporting

    See all payroll reports on our platform & focus on your business in Israel.

    Recruiting process outsourcing – including but not limited to resume screening, shortlisting candidates, coordination for interviews, and assistance for salary negotiation.

    Hiring and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire).

    On-boarding and off-boarding employees following labor law practice.

    Complete payroll solution and benefit administration

    Employee management – employee record retaining, time keeping, bonus and allowance management, expense and claims, and leave employee database management accordingly to the local law.

    Mandatory insurance compliance (i.e. pension, labor and health insurance) according to the local labor laws.

    Payment management (Invoicing customers/clients and vendor payments).

    Work VISA application assistance, if needed.

    Local individual income tax reporting.

    Payroll & PEO in Israel

    Professional Employment Organization (PEO) services are for companies who have a legal entity in Israel, and want to outsource their payroll. Employment liabilities are shared between your organization and NNRoad.


    Compliance & Payroll

    We manage monthly payroll, mandatory benefits & all HR compliance in Israel.


    Payroll Reporting

    See all payroll reports on our platform & focus on your business in Israel.

    Registering the necessary company and personnel information for payroll calculation in the payroll software and system

    Monthly Payroll Processing

    Year-End Adjustment and Annual Declaration

    Taxes & Payroll in Israel

    Employee Income Taxes:

    Individual income tax rates in Israel are based on progressive tax brackets.

    As of 2021, the tax rates range from 10% for income up to 75,720 shekels to 47% for income above 831,240 shekels. There are also various tax deductions and credits available, such as for charitable donations and pension contributions. The tax year in Israel runs from January 1st to December 31st, and taxpayers are required to file their tax returns by April 30th of the following year. The Israel Tax Authority is responsible for administering and enforcing the country’s tax laws.

    Tax Brackets

    10%: 0 to 77,400 ILS
    14%: 77,400 – 110,880 ILS
    20%: 110,880 – 178,080 ILS
    31%: 178,080 – 247,440 ILS
    35%: 247,440 – 514,920 ILS
    47%: 514,920 – 663,240 ILS
    50%: Over 663,240 ILS

    Sample Calculation

    Yearly income = 150,000 ILS
    10% * 77,400 = 7,740
    14% * 33,480 = 4,687.20
    20% * 39,120 = 7,824
    7740+4687.20+7824 = 20251.20

    Yearly income tax = 20,251.20 ILS

    Employer Costs in Israel

    Employer costs in Israel include various mandatory and voluntary payments that employers must make on behalf of their employees. Mandatory costs include social security contributions, which are paid by both employers and employees, as well as payments to the National Insurance Institute for work injury insurance, severance pay, and vacation pay.

    Employers are also required to contribute to pension funds on behalf of their employees. In addition to these mandatory costs, some employers may offer voluntary benefits such as health insurance, life insurance, and retirement plans.

    Employer Contribution

    3.55% – Social Security (on the first 6,331 ILS)
    7.60% – Social Security (on the difference between 6,331 ILS to a maximum of 44,020 ILS)
    8.33% – Severance Pay
    6.50% – Pension Fund
    2.50% – Disability Insurance

    Total employment cost: 28.48%

    Employee Contribution

    0.40% – Social Security (on the first 6,331 ILS)
    7.00% – Social Security (on the difference between 6,331 ILS to a maximum of 44,020 ILS)
    3.10% – Health Insurance (on the first 6,331 ILS)
    5.00% – Health Insurance (on the difference between 6,331 ILS to a maximum of 44,020 ILS)
    6.00% – Pension Fund

    Total employee cost: 21.50%

    Benefits & Insurance in Israel

    Benefits and insurance programs in Israel are designed to provide financial protection for employees and their families in the event of illness, injury, or death. All employees are entitled to health insurance through the National Health Insurance Law, which covers basic medical services and medications. Employers are also required to contribute to a severance pay fund, which provides financial compensation to employees in the event of termination or retirement. Additional insurance benefits may be available through collective bargaining agreements or private insurance plans, such as life insurance, disability insurance, and supplementary health insurance. In some cases, employers may also offer additional benefits such as paid time off, parental leave, and retirement savings plans.

    Pension Fund

    Old age insurance is one of the most important branches of Israel’s social security system, and it is designed to ensure that residents in Israel receive a regular monthly income as they grow older. Any Israeli resident who was born in Israel or first immigrated before the age of 62 for males and before the age of retirement for women is entitled for an old-age pension if he or she meets the eligibility criteria.

    Disability Pension

    A disability pension is paid to those who are unable to work, or whose earning capacity is reduced due to their medical condition.

    Unemployment Insurance

    The National Insurance Institute provides a source of income to unemployed people throughout the duration of their unemployment. Unemployment benefits are granted to salaried workers who have registered as unemployed with the Employment Service (labor exchange) and have reported to the Employment Service to hunt for job.

    Work Injury Insurance

    Work injury insurance is intended to pay insured persons who are injured at work for the loss of income they would experience during the time they are unable to work following the accident. As a result, the National Insurance Institute gives them an injury allowance for up to three months.

    benefits in Israel

    Working Hours in Israel

    Working Hours Per Week

    The standard workweek in Israel is 42 hours, with a maximum of 9 hours per day. Most employees are entitled to one day off per week, usually on Friday or Saturday, depending on their religion or personal preference.

    Overtime work is generally compensated at a higher rate than regular work hours. The exact rate varies based on the employee’s salary and the number of overtime hours worked. Employers are required to provide their employees with breaks throughout the workday, with a minimum of 30 minutes for every six hours worked.

    There are special rules that apply to night work, which is generally defined as work performed between 10 pm and 6 am. Employees working a 6-day workweek will work 8 hours per day for four days, an additional day of 7 hours between Sunday and Thursday, and three hours on Friday.


    Employees are not allowed to work more than 12 hours per day, including overtime and breaks. Overtime is limited at 16 hours per week. Employers must pay 125 percent of a worker’s regular rate for the first two hours of overtime every day, and 150 percent for any further hours. Those who labor on a holiday or on a Saturday are entitled to 150 percent of their regular wage as well as a paid vacation day.

    Termination Laws in Israel

    The basic requirement for termination of employment are:

    1. Hearing – You must hear the reason of the employee before terminating him or her
    2. Notice – Both employer and employee must provide written notice before terminating a contract
    3. General – Some terminations may be found to be illegal (for example, dismissal of a pregnant employee who has worked for the same employer or at the same workplace for at least six months is prohibited unless the employer has received a specific authorization from the competent authority, and dismissal on the basis of the employee’s religion, personal status, or sex, among other grounds, is prohibited, etc.).


    Employees who have worked for the company for at least one year are entitled to severance pay. The salary is calculated yearly, based on the employee’s current earnings. Based on the average salaries of the previous year of employment, the compensation is determined as one month’s wage per year worked.

    Notice Period

    The minimal statutory period of prior notice for dismissal and for resignation of employees whose salaries are paid on a monthly basis is one day during the first six months of employment; 2.5 days during the following six months of employment; and 30 days after completion of the first year of employment. The previous notice time must not coincide with the annual vacation period.

    Employment Contract in Israel

    Employment contracts in Israel are legally binding agreements between employers and employees that outline the terms and conditions of their working relationship. The contracts must comply with the Labor Law and other relevant regulations, and they typically include details such as the employee’s job description, working hours, salary, benefits, and termination procedures.

    Employment contracts can be for a fixed term or an indefinite period, and they can be full-time or part-time. The contracts must be provided to the employee in writing and must be signed by both the employer and the employee. In addition, employers are required to provide their employees with payslips that detail their salary, benefits, and deductions.

    Employment Contract

    In Israel, there are two sorts of contracts: indefinite duration and fixed-term contracts. The most common sort of contract is one with an indefinite length. It means that you will work for a corporation “at-will” for an extended period of time under specific terms and circumstances. After finishing a task or time period, your employer will not cancel your contract.

    Fixed-term contracts require you to work for a set period of time or on a specific project. For freelance and seasonal labor, this is a frequent format. When the time limit expires or the project is completed, the contract comes to an end.

    Probation Period

    New employees can work a suitable probationary period of between one and 12 months depending on the terms of their contract of employment or collective agreement.

    Paid leave in Israel

    Types of Leaves in Israel

    There are several types of leaves that employees in Israel are entitled to under the Labor Law. Sick leave is available for employees who are ill or injured and cannot work, and it can be used for up to 90 days per year. Maternity leave is available for pregnant employees, providing up to 15 weeks of paid leave. Parental leave is also available for both mothers and fathers, allowing up to 14 weeks of unpaid leave for the birth or adoption of a child.

    Vacation leave is another important type of leave, providing employees with paid time off for rest and relaxation. The amount of vacation time is based on the number of years of service, starting at 10 days for the first year and increasing to 23 days after 23 years of service. In addition, employees are entitled to a number of other leaves, including personal leave, bereavement leave, and military reserve duty leave.

    Annual Leave

    Employees are entitled to a minimum of 16 days of annual leave during their first five years of employment, increasing to 18 days in the sixth year, 21 days in the seventh year, and one additional day per year of service up to a maximum of 28 days in the eighth year.

    Sick Leave

    Sick leave accrues at a rate of 1.5 days each month, up to a total of 90 days. Upon return, the employee must provide a medical certificate from a medical professional.

    Maternity Leave

    Following the completion of one year of employment, female employees are entitled to 26 weeks of maternity leave; the employee can take up to seven weeks of leave before the expected due date of the child and the remainder after the birth. If an employee is eligible, Israel’s Social Security system pays for maternity leave, which typically consists of 15 weeks of fully paid leave and 11 weeks of unpaid leave.

    Paternity Leave

    An employee is permitted to remain away from work for up to 24 hours after a partner goes into labor and up to 24 hours after the birth on the basis of earned sick leave. Spouses are entitled to paid paternity leave for the first five days following the birth of their kid.

    Bereavement Leave

    In Israel, if a member of one’s immediate family dies, the employee is entitled to up to seven calendar days of paid leave to mourn their loss. After three months of service, the company completely compensates the employee for bereavement leave.

    Public Holidays in Israel

    Israel has a diverse population with many different religious and cultural traditions, and as a result, the country recognizes a variety of holidays throughout the year. The two main religions in Israel, Judaism and Islam, each have their own significant holidays. For Jews, the major holidays include Rosh Hashanah, Yom Kippur, Passover, and Hanukkah, while for Muslims, the main holidays are Eid al-Fitr and Eid al-Adha. In addition, there are several national holidays in Israel, including Independence Day and Remembrance Day.

    The dates of these holidays can vary from year to year, as they are often based on lunar calendars or historic events. Many businesses and government offices close on these holidays, and some may have reduced hours or limited services. Employers are required to provide their employees with paid time off on these holidays, although the exact number of days may vary depending on the employer and the employee’s contract.

    Public Holidays

  • Pesach I – April 16th
  • Pesach VII – April 22nd
  • Independence day – May 5th
  • Victory Day – May 9th
  • Pentecost – June 5th
  • Fast on Ninth of Av – August 7th
  • Rosh Hashanah – September 26-27
  • Day of Atonement – October 5th
  • Sukkot – October 10th
  • Simchat Torah – October 18th
  • Resources