Employer of Record & PEO in Israel

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

Native Language

Hebrew, Arabic

Employee Protection


Payroll Frequency


Capital city







New Shekel (ILS)



English Speaking



8.87 Million

Employment Cost


Cost of Living


How NNRoad Employment & PEO Services Work?

NNRoad provides professional employment organization (PEO) & employer of record (EOR) services for companies looking to hire and manage teams in Israel. Registering a legal entity in Israel as a means for employment is an outdated practice that takes both time (months) and money (thousands of USD). NNRoad’s employer of record and PEO services enables companies to hire and manage employees in Israel in full accordance with local labor laws in under a week.

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 in Israel. Employment and full liability are outsourced to NNRoad.

➊ You interviews & select the candidates you want to hire in Israel.
➋ NNRoad arranges a local labor contract with your new employee.
➌ NNRoad arranges a service contract between your organization & NNRoad.
➍ NNRoad organizes, manages & processes  payroll in Israel in full compliance with local employment laws.
➎ You maintain a normal working relationship and manage your team in Israel while NNRoad manages payroll & HR liabilities.

  • Engaging employees through local labor contracts including contract administration, engagement, extension termination and conversion to permanent hire
  • On-boarding and off-boarding employees following Israel labor law practice
  • Registration of employees with social security board and with tax office
  • Complete payroll solution and mandatory benefit administration
  • Employee management according to local laws, including employee record, time keeping, bonus and allowance management, expense and claims, and leave employee database management
  • Payment management, including invoicing customers/clients and salary payments

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.

➊ You interviews & select the candidates you want to hire in Israel.
➋ NNRoad organizes, manages and processes payroll for your local employees in full compliance with local employment laws.
➌ You maintain a normal working relationship and manage your team in Israel while NNRoad manages payroll & HR compliance.

  • Registering and de-registering the necessary company and personnel information for payroll calculation in compliance with local rules
  • Registering all local employees with the social security board, if required
  • Calculation of gross salary, salary deductions, such as social insurances, unpaid leaves, etc., and net salary based on information provided by the Company including irregular payments such as incentive/bonus, allowance, etc. if applicable
  • Assist with Insurance issues, as required
  • Pro-rata calculation for people who join/resign
  • Providing a monthly payroll summary to the Company
  • Monthly issue of electronic pay-slips
  • Prepare annual payroll related reconciliation report

Advantages of NNRoad's Israel Employment Services

  1. With EOR/PEO solutions you can manage client meetings, sales, quality control, marketing, R&D and customer support without a local company in Israel.
  2. Pay as you go
  3. ​​Dedicated account manager – One point of contact for multiple locations
  4. Employment & termination processing
  5. Complete payroll solution and statutory benefit according to local laws
  6. With EOR/PEO solutions you can hire staff while waiting for the registration of your company in Israel.
  7. NNRoad only works with professional locally licensed partners
  8. GDPR compliant
  9. NNRoad manages employee record timekeeping, bonus and allowance, expenses claims and personal leaves according to local law.
  10. NNRoad provides foreigner VISA application services, if needed

Employment Compliance in Israel

Taxes & Payroll in Israel

Employee Income Taxes:

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

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 Contributions:

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 Contributions:

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%

Working Hours in Israel

Working Hours per Week

The standard weekly workweek is 42 hours. An employee working a five-day week (Sunday to Thursday) has a regular working day of 8.6 hours for four days and 7.6 hours for the fifth day. 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.

Benefits & Insurance in Israel

Old Age Pension

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.

Termination Laws in Israel

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.

Basic requirement for termination of employment are:

  • Hearing – You must hear the reason of the employee before terminating him or her
  • Notice – Both employer and employee must provide written notice before terminating a contract
  • 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.).

Severance pay

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.

Holidays in Israel

Public Holidays in Israel

  • 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

Paid Leave in Israel

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.

Employment Contract in Israel

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.

Types of Leaves in Israel

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.

Immigration Laws in Israel

The Israeli government offers several types of visas for foreign nationals. Available options follow:

  • Immigration visa
  • A/1 temporary resident visa
  • A/2 student visa
  • A/3 clergy visa
  • A/4 visa for spouses and children
  • B/1 work visa
  • B/2 visitor’s visa

Before traveling to Israel, foreign employees must get a B-1 work visa. This visa is only valid for 30 days. Employees must get a work permit in order to work in Israel for more than 30 days.


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