Israel – Employment Terms and Conditions

What are the standard working hours in Israel, and how is overtime regulated?

The Hours of Work and Rest Law establishes a standard working week of 42 hours in Israel, normally distributed across five or six days, with daily limits of 8.6 hours in a five-day week or 8 hours across six days. The legislation was updated in 2018 to reduce the weekly ceiling from 43 to 42 hours. The prevailing pattern sees most employees working from Sunday through Thursday — or sometimes Sunday to Friday — a schedule that represents a fundamental departure from the Monday-to-Friday norm familiar to many newcomers from Western countries.

Any employee working at least six hours per day is entitled to a 45-minute rest break, which must include at least 30 consecutive minutes. Employees in non-manual roles may, under a special permit, work full days without this break. In many workplaces, employers incorporate additional time to account for mandatory rest breaks, pushing the practical working week to around 45 hours — though all time worked beyond the 42-hour base is compensated as overtime.

Israeli law also guarantees a minimum consecutive weekly rest period of 36 hours. Jewish employees must receive this rest on Saturday (Shabbat), Muslim employees on Friday (Jumu’ah), and Christian employees may take it on Sunday. This makes Israel’s approach to weekly rest one of the few in the world that explicitly accommodates multiple religious observances in statutory form.

Overtime compensation follows a two-tier structure: the first two hours of daily overtime are paid at 125% of the standard hourly rate, with any further overtime hours attracting 150%. The law caps daily overtime at four hours, meaning total daily working time may not exceed 12 hours. Monthly overtime is generally capped at 60 hours, and annual overtime must not surpass 182 hours unless the employer obtains a specific permit from the Ministry of Labor.

A narrow exemption from the Hours of Work and Rest Law exists for employees whose position demands a particularly high degree of personal trust or whose hours cannot be practically supervised — commonly described as managerial or trust-based roles. Courts apply this exemption strictly, and awarding an employee a senior-sounding title or an elevated salary alone is insufficient to strip them of overtime entitlements.

Authoritative guidance on working hours is published by the Israeli Ministry of Labor, which oversees the Hours of Work and Rest Law 5711–1951.

What employment rights and benefits are workers entitled to in Israel?

Employees on a five-day working week are entitled to a minimum of 12 working days of annual leave during their first five years of employment. This rises to 17 working days between the sixth and ninth year of service, and subsequently increases to a maximum of 23 working days. Where employment ends, employers are obliged to compensate employees for any untaken annual leave accrued over the preceding four years.

Sick leave accrues at the rate of 1.5 days per calendar month, yielding a maximum of 18 days annually, with a total accumulation ceiling of 90 days. The first day of sick absence is unpaid; the second and third days are compensated at 50% of normal pay; and from the fourth day onward, full pay applies. Under an amendment to the Sick Pay Law, employees diagnosed with a malignant disease or a condition requiring ongoing dialysis — or those who have recovered from such a condition — receive full pay from the very first day of absence, up to the 90-day maximum.

Female employees are entitled to 26 weeks of maternity leave in total, with up to seven weeks available to be taken before the expected delivery date. Eligibility requires at least 12 months of continuous employment with the same employer. Bituach Leumi (the National Insurance Institute) funds the paid component of maternity leave for qualifying employees, which in practice amounts to 15 weeks of fully compensated leave, with the remaining 11 weeks unpaid.

Israeli law provides for nine paid public holidays annually. Eight of these correspond to Jewish religious festivals, with one day designated for Israeli Independence Day. Since the Jewish calendar determines when these dates fall, the corresponding Gregorian dates shift from year to year. Employees who do not observe Jewish holidays may direct this entitlement toward their own religious observances.

Employers must provide advance written notice of dismissal that includes the employee’s start date. The required notice period scales with seniority: during the first year of employment, one day of notice for each completed month of service; during the second year, 14 days plus one additional day for every two months worked in that year; during the third year, 21 days plus one day per two months; and upon completion of three years, a full calendar month’s notice is required.

Israeli labor law places no restriction on the employment of foreign nationals. Employers routinely engage non-Israeli workers holding B-1 work permits, and the full body of Israeli labor legislation — including statutory minimums for leave, sick pay, and dismissal notice — applies equally to these employees.

What are the rules around minimum wage and pay in Israel?

Israel’s minimum wage is established by government order and reviewed on a regular basis, typically taking effect in April each year. The rate is determined through negotiations involving the government, the Ministry of Finance, and labour organisations, most prominently the Histadrut federation.

With effect from 1 April 2025, Israel’s monthly minimum wage stands at ILS 6,247.67, representing an increase of 6.25% from the previous figure of ILS 5,880. For employees working 182 hours per month, this translates to a minimum hourly rate of ILS 34.32. A reduced minimum wage applies to workers under the age of 18.

Under Israeli law, only base salary components count toward meeting the minimum wage threshold. Supplementary payments — including bonuses, expense reimbursements, a 13th-month salary, seniority allowances, or family support — are excluded from this calculation. Employers may not incorporate these extras when assessing whether they have satisfied the legal minimum.

Non-compliance with minimum wage obligations carries significant consequences under the Minimum Wage Law (1987). Employers found in breach may face criminal prosecution with potential custodial sentences of up to one year, as well as financial penalties reaching ILS 226,000. The Ministry of Labor publishes updated minimum wage figures and enforcement guidance annually; always consult this source for the most current rates.

How does the employment contract system work in Israel?

Israeli law recognises two principal forms of employment contract: an open-ended arrangement with no fixed end date, and a fixed-term contract tied to a defined period or a specific project. Part-time contracts are also widespread and must specify the agreed number of weekly or monthly working hours; entitlements such as pay, benefits, and leave are then calculated on a pro-rata basis relative to full-time employees.

Where a fixed-term contract is in place, the employer is bound to maintain the employment relationship for the duration set out in the agreement. Should the employer elect to end the arrangement before the agreed date, it may be liable to continue paying the employee’s wages through to the original contractual end point. This provision affords fixed-term workers meaningful protection against premature termination.

The Wage Protection Law obliges employers to update payroll arrangements in response to legislative changes and to issue payslips that itemise base salary, overtime, holiday pay, sick leave, and pension contributions. Contracts and payslips are routinely produced in Hebrew, and expats who are not proficient readers of Hebrew should always obtain a certified translation before committing their signature to any document.

While Israeli legislation does not separately regulate probationary periods, they are commonly included in employment contracts or provided for under collective agreements. Throughout any probationary phase, the complete set of statutory employment protections remains in force — covering minimum wage, sick leave, and overtime rights. The notice period applicable during probation may be shorter than that which applies once probation has been completed, depending on the terms agreed in the contract.

Employment disputes in Israel are handled by a dedicated labour court system. Five regional labour courts deal with localised disputes, while the National Labour Court in Jerusalem has jurisdiction over national-level strike action, collective disputes, and appeals from the regional courts.

How does the workplace pension system work in Israel?

Israel’s pension arrangements operate across two complementary layers: a state-administered social insurance programme and a compulsory privately managed occupational pension scheme. This dual structure combines public and private elements into a comprehensive retirement framework.

The state component is administered by Bituach Leumi, the National Insurance Institute. All Israeli residents aged 18 and over are legally required to pay insurance contributions to Bituach Leumi under the old-age insurance programme. In broad terms, Bituach Leumi performs a function comparable to Social Security in the United States and Canada, or National Insurance in the United Kingdom. One important distinction from the UK’s National Insurance system — which builds entitlement to a state pension based principally on the number of qualifying years — is that Israel’s Bituach Leumi pension is means-tested up to the age of 70, functioning as a basic financial safety net rather than a comprehensive source of retirement income.

All salaried employees not already covered by a collectively negotiated pension arrangement are legally required to participate in a private pension fund, with both employer and employee making mandatory contributions. This occupational pension obligation bears some resemblance to Australia’s Superannuation Guarantee, under which employers must contribute to a private fund on behalf of their workers — though Israel’s requirement applies universally to employees rather than only to those above a specified earnings threshold.

Pension contributions are shared between employer and employee. Employers typically contribute around 6–7.5% of an employee’s salary, incorporating a severance pay component, while employees contribute approximately 6% of their own salary to their private pension fund. These figures can vary where collective agreements or individual contracts provide for different rates. The Ministry of Finance and the National Insurance Institute (Bituach Leumi) are the primary official bodies responsible for pension regulation and oversight. Given that contribution rates are subject to periodic revision, always verify the prevailing figures with these authorities or a qualified pension adviser.

What types of pension arrangements are available to expats in Israel?

All Israeli residents aged 18 and over are legally required to be registered with Bituach Leumi and to pay general insurance and healthcare contributions. Eligibility for coverage is determined by residence in Israel rather than citizenship — specifically, whether Israel is the principal centre of a person’s life. As a consequence, expats who are living and working in Israel are generally obliged to contribute to the Bituach Leumi system regardless of their nationality.

A minimum of 12 years of contributions is required to qualify for a state pension from Bituach Leumi. Expats who arrive in Israel part-way through their working lives may find it difficult to accumulate sufficient qualifying years through Israeli contributions alone to receive the full state pension. Olim (immigrants) who arrive after the age of 60 are generally ineligible for Israel’s standard old-age pension, though they are entitled to an old-age benefit. Those who immigrated for the first time after the age of 60 to 62 — depending on year of birth — do not qualify for an old-age pension.

A person who was receiving a pension in Israel and subsequently relocates to a country that has concluded a bilateral social security convention with Israel will continue to receive their pension in that country, even after ceasing to be an Israeli resident. Israel has entered into bilateral social security agreements with a number of states; you should contact Bituach Leumi to verify whether your home country is a signatory. An Israeli resident who began drawing an old-age pension in Israel and moved to a country without such a convention may also continue to receive the pension despite no longer being an Israeli resident.

Israel extends considerable tax advantages to new immigrants and retirees, making it a financially attractive destination for many. Among the most significant is a 10-year tax exemption available to new immigrants (olim), covering foreign pensions, investment income, and capital gains. This relief can make it advantageous for expats to maintain private pension arrangements from their country of origin while residing in Israel.

For the compulsory occupational pension, contributions paid into an Israeli private pension fund during your working years in the country are held in your name and generally remain accessible even after you depart. The tax treatment of any withdrawal will depend on your individual circumstances, the specific rules of your fund, and whether Israel has a bilateral social security agreement with your destination country. Always confirm the applicable rules with Bituach Leumi, the Israel Tax Authority, or a financial adviser with expertise in both Israeli law and the regulations of your home country.

What is the retirement age in Israel, and how does the pension eligibility system work?

The standard retirement age for men in Israel is 67. For women, the retirement age ranges between 62 and 65, varying according to date of birth. Israel’s parliament enacted legislation to raise the normal retirement age for women incrementally from 62 to 65; the retirement age for men is unaffected and remains at 67. The phased increase proceeds at a rate of four months per year between 2022 and 2024, followed by three months per year from 2025 through to 2032.

To be eligible for an old-age pension, a claimant must have reached the applicable retirement age and satisfy one of two contribution tests: either at least 60 months of contributions in the preceding 10 years, or a cumulative total of 144 months of contributions. In addition, a minimum of 12 years of contributions in total is required before any pension can be claimed. Both qualifying thresholds operate together, and each should be factored into retirement planning.

Once a claimant reaches retirement age and applies for their pension, a means test is applied. Those whose income exceeds defined thresholds will receive only a partial pension — or possibly none at all — until they turn 70. At 70, both men and women become entitled to the full old-age pension without any income assessment.

The baseline old-age pension for an individual under the age of 80 in 2025 is ILS 1,896 per month. A seniority supplement is calculated on the basis of accumulated years of insurance contributions, adding 2% for each contributing year, subject to an overall cap of 50%. Retirees who choose to defer drawing their pension and continue working beyond retirement age receive an enhancement of 5% of the pension amount for each year of deferment.

For the most up-to-date information on pension amounts and contribution thresholds, refer directly to the official Bituach Leumi website, as the relevant figures are reviewed on a regular basis.

What taxes and social contributions are deducted from wages in Israel?

Israeli employers deduct income tax and social contributions at source — a mechanism broadly equivalent to the Pay As You Earn (PAYE) system used in other countries. Most employees are therefore not required to submit an annual tax return, unless they have additional income streams. Self-employed individuals and those with complex financial arrangements are generally obliged to file independently.

Israel operates a graduated income tax structure, with rates running from 10% up to 50% on income above the highest bracket. The overall tax burden is reduced through “credit points” — a system of personal tax credits in which each credit point is worth approximately ILS 223 per month (equivalent to ILS 2,676 annually as of 2025). All residents receive a baseline credit point allocation, with further points available to specific categories of taxpayer, including new immigrants, parents of young children, and individuals with disabilities.

Social insurance contributions to Bituach Leumi are also withheld from wages, with both employers and employees making payments to the National Insurance Institute. These contributions fund old-age pensions, workplace accident insurance, maternity benefits, and unemployment support. Employers are additionally required to withhold supplementary tax from the salary element paid to foreign employees whose earnings exceed twice the national average wage. Expats who qualify as Israeli tax residents are in principle taxed on their worldwide income, though new immigrants may benefit from a generous 10-year exemption on income from foreign sources.

The Israel Tax Authority is the competent authority for all tax-related matters. Expats are strongly advised to consult this authority — or engage a qualified Israeli tax professional — to determine their precise tax status, particularly if they continue to hold income, property, or pension entitlements in another jurisdiction.

What are the rules around trade unions and collective bargaining in Israel?

Trade unions are fully legal in Israel, and approximately one third of the workforce holds union membership. The Histadrut — a large and influential federation of trade unions — occupies a central position in Israeli economic and social life. Historically, the Histadrut played a role not only in wage negotiations but also in the administration of parts of the welfare system, though over recent decades its activities have become more concentrated on collective bargaining across various industries.

Wage determination in Israel has undergone a significant transformation, shifting from a highly centralised, corporatist model that encompassed almost the entire workforce to a more decentralised, pluralist arrangement characterised by a diverse array of sector-specific agreements. As a result, terms and conditions in industries such as banking, healthcare, education, and sections of the public sector may substantially exceed the statutory minimums, being governed instead by collectively negotiated agreements.

Workers in most industries have the right to take strike action, provided that 15 days’ written notice of intent to strike is given in advance. Dismissing an employee for joining a union or participating in union activities — including strikes — is unlawful. The right to strike is, however, restricted in the civil service and in institutions classified as essential services, including healthcare, water supply, energy, and the police.

Israeli law contains no explicit prohibition on foreign nationals joining trade unions. In practice, expats employed in unionised sectors — such as healthcare, teaching, or the public sector — will typically benefit from the same collectively agreed terms as their local counterparts. For information specific to a given sector, the Histadrut website serves as the primary reference.

Are there any particular employment protections or challenges that expats should be aware of in Israel?

Israeli labor law permits the unrestricted employment of foreign nationals, and employers regularly engage non-Israeli workers on B-1 work permits. All provisions of Israeli labor legislation apply equally to these employees. This is a significant point of reassurance: the statutory floors governing wages, leave entitlements, overtime compensation, and dismissal protection cover foreign workers and Israeli nationals alike, meaning that expats are not a legally unprotected category.

In practical terms, however, challenges arise. Employment contracts, payslips, and collective agreements are routinely issued in Hebrew. Expats who cannot read Hebrew comfortably should always commission a certified translation before signing any document. Misinterpretations of benefit entitlements or deduction arrangements are among the most common sources of disputes involving foreign workers. Since payslips are legally required to itemise base salary, overtime, holiday pay, sick leave, and pension contributions, learning to interpret a payslip correctly is a worthwhile investment of time.

Visa-tied employment represents another meaningful practical constraint. The majority of foreign workers in Israel holding a B-1 permit are linked to a specific employer, so changing jobs requires a fresh permit application. If employment ends unexpectedly, your right to continue residing and working in Israel may be affected. Expats should always clarify the immigration implications of any proposed change of employment with the Population and Immigration Authority before proceeding.

The recognition of overseas qualifications differs considerably by profession. Regulated fields — including medicine, law, engineering, and nursing — require formal approval from the relevant Israeli professional body, which may entail examinations, supplementary training, or demonstrated Hebrew language proficiency. Expats entering regulated professions should begin the recognition process well in advance of their planned relocation date. The Ministry of Labor’s website provides guidance on the procedures applicable to each regulated profession.

Expats working within Israel’s thriving technology industry — spanning software development, cybersecurity, and biotechnology — frequently find that market remuneration and overall employment packages substantially exceed the statutory minimums. Many employers in this sector offer equity participation, flexible remote-working arrangements, and enhanced benefits aligned with global technology industry norms. Nonetheless, even within this sector, the full scope of statutory protections continues to apply.

Frequently asked questions

Are overseas qualifications automatically recognised in Israel?

No. Foreign qualifications in regulated professions — including medicine, law, teaching, and engineering — require formal recognition from the relevant Israeli professional body or the Ministry of Education. The procedure may involve submitting documentation, undergoing equivalency assessments, and in some cases passing Hebrew language tests or additional examinations. Given that the process can take a considerable amount of time, it is advisable to begin well before arriving in Israel.

Can I access my Israeli pension contributions if I leave the country?

Contributions made to a compulsory private occupational pension fund during your working years in Israel are held in your name and are generally accessible after you depart. The precise terms of withdrawal — including any associated tax liability — will depend on your personal circumstances, your fund’s rules, and whether Israel has concluded a bilateral social security agreement with the country you are moving to. Consult both your pension fund manager and a qualified financial adviser before leaving, as early withdrawal can give rise to tax obligations.

What happens to my employment rights if my visa status changes?

Your statutory entitlements under Israeli labor law — encompassing minimum wage, overtime, leave, and dismissal protections — remain in force regardless of your visa category for as long as you are employed in Israel. A change in visa status may, however, affect your right to work for a particular employer or in a specific role. If your visa position changes, contact the Population and Immigration Authority and your employer’s HR function without delay.

Is there a probationary period in Israel, and what are my rights during it?

Israeli legislation does not prescribe a fixed statutory probationary period, though many employment contracts include one — typically three to six months. The complete range of statutory protections, including rights to minimum wage, sick leave, and notice, applies throughout any probationary period. The notice period required to end employment during probation may be shorter than that applicable after probation concludes, depending on what is set out in your individual contract.

Do I need to join a trade union in Israel?

Union membership in Israel is entirely voluntary, and there is no legal requirement to join. In industries where collective agreements are operative — such as banking, healthcare, education, and parts of the public sector — those agreements apply to all employees in the relevant sector irrespective of personal union membership. The Histadrut is Israel’s primary union federation, and its website offers useful information about sector-specific agreements.

How is maternity or paternity leave funded in Israel?

The paid portion of maternity leave is funded by Bituach Leumi rather than by the employer directly, provided the employee meets the applicable eligibility conditions. In practice, this translates to 15 weeks of fully paid leave and a further 11 weeks of unpaid leave. Fathers may, subject to qualifying conditions, take over a portion of the paid leave entitlement. As the rules in this area have developed over time, it is advisable to check with Bituach Leumi for the current eligibility criteria.

How does the Israeli tax system treat new immigrants?

New immigrants to Israel benefit from a significant tax concession: a 10-year exemption for olim covering foreign pension income, investment returns, and capital gains. During the first decade of residence, income generated abroad may be fully exempt from Israeli income tax, although the exact scope of the exemption varies according to individual circumstances. For personalised guidance, consult the Israel Tax Authority or a qualified Israeli tax adviser.

What is “recuperation pay” (dmei havra’a), and am I entitled to it?

Recuperation pay — known in Hebrew as dmei havra’a — is a statutory benefit payable to any employee who has completed more than one year of service, with the amount determined by the employee’s length of service. The benefit was partially frozen in 2025, with a portion redirected to fund support for reservists. The standard rate stands at approximately ILS 378 per month of employment, though this has been subject to recent adjustments. This entitlement is paid annually, typically during July or August, and applies to foreign workers as well as Israeli nationals. Always verify the current applicable rate with your employer or the Ministry of Labor.