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Hire and manage employees in Israel

As your Employer of Record (EOR) in Israel, we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary.
Last updated:
July 16, 2025
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Quick facts

Israel's economy is a highly developed, modern economy, with a strong technology sector. The country has a diverse labor market, with significant employment in fields such as high-tech, healthcare, and education. Employment regulations are in place to ensure workers' rights, including minimum wage laws, paid leave entitlements, and a national health insurance system.

Employment Contracts

In Israel there are 3 types of employment agreements:

  • Fixed-term Employment Contracts
  • Indefinite, Open-ended Employment Contracts
  • Collective Bargaining Agreements (CBAs)

Probation Period

New employees may work a probationary period ranging from 1 to 3 months, depending on the terms of their contract or collective agreement.

Working Hours

A full workweek consists of 42 hours, typically Sunday through Thursday. Regular working days are 8.1 hours, with a 30-minute break.

Vacation Days

  • Employees working five days a week are entitled to 12 net vacation days for the first five years.
  • From the sixth year onward: 14 net vacation days for the 6th year, 15 days for the 7th, 16 days for the 8th, and an additional day each year, up to 20 days after 12 years.

Sick Leave

  • For the first day of sick leave, employees are not paid.
  • On the second and third days, employees are entitled to 50% of their regular pay.
  • From the fourth day onward, employees are entitled to 100% of their regular pay.

Wages and Salary Payment

  • The payroll cycle is monthly, and salaries are paid no later than the 7th day of the following month.
  • Minimum wage (since 2024): NIS 5,880 gross per month.

Public Holidays

  • There are 6 national holidays in Israel: Rosh Hashana (2 days), Sukkot (2 days), Yom Kippur, Passover (2 days), Shavuot, and Independence Day.
  • There is no substitute holiday system, and holiday eves are typically half days for employees.

Employer Taxes

  • Employers contribute to Social Security, with contributions varying by income brackets.
  • Employers also contribute to various funds like the pension fund (6.5%) and severance fund (8.33%).

Employee Taxes

  • Employees must contribute 6% to the pension fund and 8.33% to the severance fund.
  • Contributions to National Health Insurance are deducted from employees' salaries.

Notice Period

  • For termination within the first year, the notice period is 1 day for each month worked, with a maximum of 6 days in the first year.
  • After the first year, 30 days' notice is required for termination.

Termination and Severance Pay

Severance pay is calculated at 1 month's salary for every year worked. If the employer contributes 8.33% of the salary to a severance fund each month, no additional severance is required upon termination.

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Frequently
Asked
Questions

What is International EOR and PEO?

International EOR (Employer of Record) and PEO (Professional Employer Organization) are services that enable businesses to compliantly hire, manage, and pay employees in foreign countries without the need for establishing a legal entity. EOR acts as the legal employer while PEO co-employs workers, handling administrative tasks such as payroll, taxes, and benefits.

Does Acvian handle time record submissions?

Acvian does not handle time record submissions directly. It is the client’s responsibility to track and submit employee work hours. However, Acvian can offer guidance and best practices to ensure efficient time tracking and compliance with local labor laws.

How can employees view their payroll details?

Employees can view their payroll details through the monthly payslips they receive and also via our Acvian platform. These payslips contain information on earnings, deductions, taxes, and net pay, giving employees a clear overview of their monthly payroll. Please note that in some countries, employers are restricted from viewing payslips due to data protection regulations, and only employees can share their payslips. For more details on these regulations, please contact our specialists.

How Acvian handles payroll disputes?

Acvian addresses payroll disputes promptly, working closely with both the client and the employee to investigate and resolve any issues.

Does Acvian require advanced monthly payments of salaries and service?

Yes, Acvian requires advanced monthly payments for salaries and service to ensure timely and accurate payroll processing.

Can Acvian provide consultations regarding a labor and tax legislation?

Yes, Acvian can provide consultations regarding labor and tax legislation. Our team of experts is well-versed in local regulations and can offer guidance to help your business maintain compliance, reduce risk, and navigate the complexities of international employment and taxation laws.

Which benefits does Acvian provide?

Acvian provides a diverse range of benefits, including but not limited to:

  • Health insurance
  • Car leasing
  • Gym allowance
  • Per diem compensation
  • Maternity leave

We can customize and offer many kinds of benefits requested by the client, ensuring that your employees receive the support and perks that align with your company culture and local regulations.

Can Acvian provide private health insurance?

Acvian can provide private health insurance options as part of its comprehensive employee benefits package.

What would the monthly/yearly costs for the employee be?

The monthly/yearly costs for an ‘average’ package vary depending on the specific plan and location. See our estimated price packages here. Acvian’s team can provide detailed cost breakdowns based on your requirements.

Can Acvian help with entity set up?

While Acvian doesn’t directly provide entity set-up services, we can introduce you to local lawyers who specialize in this area to assist you with your needs. See also, when it's better to set the entity or use the EOR.

Offboarding: how it is handled?

Offboarding is managed by Acvian in a structured and compliant manner. We coordinate with your business to ensure all necessary documentation, exit interviews, and final payments are completed. Acvian also ensures adherence to local labor laws and regulations, including providing any required notice periods and managing the termination process.

When does business need it?

Businesses typically need EOR and PEO services when they:

  • Expand into new international markets.
  • Hire remote employees in foreign countries.
  • Seek to streamline global workforce management.
  • Aim to ensure compliance with local labor laws and regulations.
  • Want to reduce the time and cost of establishing legal entities abroad.

Is Acvian compliant with GDPR?

Yes, Acvian is fully compliant with GDPR regulations. We collect and process personal data in accordance with the law, ensuring that data is used only for general, allowed purposes such as marketing and other legitimate business activities.

Where can Acvian supply EOR services?

Acvian can supply EOR services in over 180 countries, encompassing almost all European nations, the United States, and Canada, providing extensive coverage to support your business’s global expansion and workforce management needs. See our coverage here.

How does payroll work under EOR?

Under EOR, Acvian manages the payroll process by:

  • Acting as the legal employer of your foreign workforce.
  • Handling salary calculations, deductions, and disbursements.
  • Ensuring compliance with local tax and labor laws.
  • Managing payroll taxes, social contributions, and benefits.
  • Providing timely and accurate payroll processing for your employees.

Explore the details here.

Can you provide support for expatriate EOR workers?

Yes, Acvian provides comprehensive support for expatriate EOR workers, including:

  • Visa and work permit assistance.
  • Relocation and housing support.
  • Local registration and compliance.
  • Payroll and tax management.
  • Coordination of benefits and insurance coverage.

Explore in details here.

What are the details of expats support?

Expats support from Acvian encompasses a range of services designed to facilitate a smooth transition for employees working abroad. Key aspects include:

  • Assistance with visa and work permit applications, renewals, and compliance.
  • Support for relocation, including housing, schooling, and local registration.
  • Guidance on local tax regulations and filings.
  • Coordination of locally compliant benefits and insurance coverage.
  • Ongoing support for any changes or issues that may arise during the expatriate assignment.

What happens after onboarding?

After onboarding, Acvian maintains an ongoing relationship with your business and employees, ensuring smooth payroll processing, managing tax and regulatory compliance, handling benefits administration, and providing support for any changes or issues that may arise in the employment lifecycle. This allows you to focus on your core business operations while Acvian manages your international workforce.

How many days will it take for our personnel to be onboarded?

The onboarding process typically takes between 2 to 4 weeks, depending on the country and complexity of the employee’s situation. However, Acvian strives to expedite this process, ensuring a smooth and efficient transition for your personnel. See our story of the urgent employment project.

Does Acvian provide in-country support for employee inquiries or assistance requests?

Yes, Acvian provides in-country or regional support for employee inquiries and assistance requests. We have dedicated managers in the countries where we support your employees, ensuring prompt and knowledgeable assistance tailored to local regulations and practices.

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