Government Type: Parliamentary democracy
Currency: Israeli Shekel
Languages: Hebrew, Arabic, English
GDP Per Capita: 41,715 USD (2018)
Main Business sectors: Hi Tech, Communication, Cyber and Services: 50.7%
Employment Rate: 95.3%
Higher Education Rate: 46%
Average monthly salary: 10,428 ILS
Employee Income Tax: 10-50% according to salary
Mandatory paid vacation days: 12-20 days per annum
Israel has been attracting international corporations in the last two decades thanks to its booming Hi-tech and start-up industry.
Israel is considered one of the most developing and interesting countries for fields of Hi-tech, communication, cyber, fintech and life science.
With 6 universities ranked in the 100 best academic institutions globally, the innovative military units and the vibrant entrepreneurial environment, the Israeli workforce embraces global initiatives and is geared up to develop a career in foreign and multinational companies.
Global People, founded in Israel, has a significant advantage in the Israeli market thanks to:
Global people’s services include:
Israeli labor law applies to all employees in Israel, Israeli or foreign. The labor law includes a set of rules, regulations and case law.
Israeli employees cannot waive any minimum rights, to which they are entitled under the Israeli law.
The employment agreement must comply with the Israeli labor law and other regulations while detailing all employment conditions:
Israel’s Equal Employment Opportunity Act protects employees from prohibited discrimination in the workplace, and protects employees from:
0-6 months: one day per month
6-12 Months: 6 days plus 2.5 days for the 7th month forward
12 months or more: 30 days’ notice
Total Employment Cost: 23.43%
Up to 6,330 ILS per month: 10%
6,331 – 9,080 ILS per month: 14%
9,081 – 14,580 ILS per month: 20%
14,581 – 20,260 ILS per month: 31%
20,261 – 42,160 ILS per month: 35%
42,161 – 54,300 ILS per month: 47%
Over 54,301 ILS per month: 50%
Mandatory paid leave days
1-5 employment years: 12 days
6th year: 14 days
7th year: 15 days
8th year: 16 days
9 years or more: 20 days
The paid leave days above do not include sick days, national and religious holidays and bereavement leave.
Every country has different benchmarks regarding employee benefits, and they vary depending on the market and type of position. These benchmarks, as detailed below, act as a key factor when choosing an employer in Israel, especially in the fields of Hi Tech, Communication, Cyber and Life-science industries.
Israel’s most luxurious employee benefit consists of an additional salary, paid either when completing a year of employment or with the December salary.
The 13th salary is a benefit reserved for executives in the financial sector and tech talents.
The Education fund (Keren Hishtalmut in Hebrew) is considered one of Israel’s most popular savings plan and a favorable voluntary employee benefit since it grants a tax exempt saving to employees.
The education fund’s monthly contributions are 10% of the employee’s gross salary and are divided between the employer (7.5%) and the employee (2.5%).
Employees can cash the fund after six years and enjoy a tax exemption.
Since all Israeli citizens enjoy a governmental medical insurance plan, a private medical insurance plan is considered a complementary employee benefit, which includes medical insurance for private medical services for the employee and their children under the age of 18. Employees may also include their partners in their medical insurance and enjoy special rates.
Employees holding executive positions often receive a car for professional and private uses. This benefit usually includes all maintenance costs and a gasoline allowance.
Granting this benefit might have taxation consequences for the employees, that can amount to 3500 ILS per month, but since public transportation in Israel is lacking, it is a favorable benefit.
Some employers provide lunches for the staff in a designated cafeteria in house and offer a full lunch at a subsidized price.
Those who wish to subsidize lunch without catering in house, give a daily allowance that can amount to 50 ILS per day to allow them to enjoy their favorite restaurants. The lunch allowance is considered an industry benchmark in the Tech Sector.
Although the Israeli mandatory paid leave quota includes a total of 21 days, many employees include additional paid leave days as a request during negotiations.
The industry benchmark regarding an additional day is calculated according to the civil service benchmark of 22 paid leave days for the first year, excluding holidays.
The civil service imposes its benchmark in this case as well, and employees may ask to be compensated for all sick days regardless of the sick period.
Employers offer gifts to their employees twice a year: on the Jewish new year and on Passover. Employers can also offer gifts for the employees’ children for other holidays and other special occasions.
Employers in the Tech and Communication industry usually hold special events and galas to mark holidays and other special occasions and invite all employees for an evening of fine dining, live concerts, Etc.
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