
Lucas Botzen
Founder & Managing Director
Last updated:
September 21, 2025
What is an Employer of Record in Israel?
View our Employer of Record servicesAn Employer of Record (EOR) in Israel is a company that legally hires employees on your behalf. This means you can build a team in Israel without setting up a local entity. The EOR handles all the legal and HR tasks that come with employment. You manage your team's day to day work, and the EOR takes care of the rest. For companies looking to hire in Israel, an EOR provider like Rivermate can simplify the process.
How an Employer of Record (EOR) Works in Israel
Using an EOR in Israel follows a straightforward process. Here’s how it generally works:
- You find the talent. You recruit and select the person you want to hire in Israel.
- You partner with an EOR. The EOR becomes the legal employer of your chosen candidate.
- The EOR creates a compliant employment contract. They draft an agreement that follows Israeli labor laws.
- The EOR onboards your new employee. This includes registering them with the National Insurance Institute (Bituach Leumi).
- They manage payroll and taxes. The EOR handles salary payments, income tax withholding, and social security contributions.
- They administer employee benefits. This includes mandatory benefits like pension contributions and health insurance.
- You manage your employee's daily tasks. You focus on their work and integration into your company culture.
Benefits of Using an EOR for Hiring in Israel
Using an EOR to hire in Israel offers several advantages. It allows you to enter the Israeli market and hire talent quickly and efficiently. You can avoid the time and expense of establishing a legal entity in the country.
Here are some of the key benefits:
- Stay compliant with local laws. Israeli employment laws can be complex. An EOR ensures you follow all legal requirements for contracts, benefits, and terminations.
- Simplify payroll and taxes. The EOR manages all aspects of payroll, including tax deductions and contributions to social security.
- Offer competitive benefits. An EOR can provide your employees with the statutory benefits they are entitled to in Israel.
- Save time and resources. You can focus on your core business operations while the EOR handles the administrative side of employment.
- Reduce risk. The EOR takes on the legal responsibilities of an employer, which can minimize your legal risks.
Responsibilities of an Employer of Record
As an Employer of Record in Israel, Rivermate is responsible for:
- Creating and managing the employment contracts
- Running the monthly payroll
- Providing local and global benefits
- Ensuring 100% local compliance
- Providing local HR support
Responsibilities of the company that hires the employee
As the company that hires the employee through the Employer of Record, you are responsible for:
- Day-to-day management of the employee
- Work assignments
- Performance management
- Training and development
Costs of using an Employer of Record in Israel
Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Israel includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Israel.
Employ top talent in Israel through our Employer of Record service
Book a call with our EOR experts to learn more about how we can help you in Israel







Book a call with our EOR experts to learn more about how we can help you in Israel.
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Hiring in Israel
Hiring in Israel means tapping into a workforce known for its innovation and advanced skills. The job market is strong, especially in the tech sector. To hire employees, you need to understand local labor laws, which cover everything from employment contracts to termination procedures.
Employment contracts & must-have clauses
While you can have a verbal agreement, a written employment contract is highly recommended. In fact, for foreign workers, a written contract is required. At a minimum, you must provide employees with a written notice of their key employment terms.
Your employment contracts should include:
- Employee and employer details: Full names and identification numbers.
- Job description: The employee's title and main responsibilities.
- Start date: The official first day of employment.
- Working hours: The standard daily and weekly hours.
- Salary and benefits: Include the base salary, payment schedule, and details on social benefits like pension funds.
- Leave entitlements: Information on annual vacation and sick leave.
- Termination notice: The required notice period for both parties.
Probation periods
Probationary periods are common in Israel and typically last from three to six months. During this time, both you and the employee can assess if the role is a good fit. Employees on probation are still entitled to all statutory benefits, like minimum wage and social insurance contributions.
Even during probation, you must follow a formal hearing process before ending the employment relationship. However, the notice period for termination during the first year is shorter than for long-term employees.
Working hours & overtime
The standard workweek in Israel is 42 hours. For those working a five-day week, a typical workday is 8.6 hours. Any work beyond these hours is considered overtime.
Here’s how overtime pay works:
Overtime Hours | Pay Rate |
---|---|
First two hours | 125% of the regular hourly wage |
After the first two hours | 150% of the regular hourly wage |
Work on a rest day or holiday | 150% of the regular hourly wage plus an alternative day off |
Public & regional holidays
Employees in Israel are entitled to paid time off for public holidays. There are 9 official Jewish holidays each year.
Here is a list of the main public holidays:
- Rosh Hashanah (2 days)
- Yom Kippur
- Sukkot (first day)
- Simchat Torah
- Passover (first and seventh days)
- Independence Day
- Shavuot
Non-Jewish employees can choose to take paid leave on their own religious holidays instead of the Jewish holidays.
Hiring contractors in Israel
You can hire independent contractors in Israel for project-based or specialized work. This offers flexibility and can be cost-effective since you don't have to provide the same benefits as you would for employees. Contractors manage their own taxes and social security contributions.
However, it's crucial to classify workers correctly. If a contractor's work relationship looks more like a traditional employment arrangement, you risk misclassification. This can lead to serious consequences, including being required to retroactively pay for employee benefits and facing fines.
An Employer of Record (EOR) can help you avoid these risks. An EOR acts as the legal employer for your team members in Israel. They handle all the legal and HR tasks, like payroll, taxes, and benefits, ensuring you comply with local labor laws. This lets you focus on managing your team's day-to-day work without the legal complexities of international hiring.
Compensation and Payroll in Israel
In Israel, your payroll is more than just a transaction. It reflects a unique system governed by a collection of laws rather than a single code. You pay your employees monthly. Staying compliant means understanding various components, from social contributions to specific annual payments. This guide breaks down what you need to know.
Payroll cycles & wage structure
You process payroll in Israel on a monthly cycle. Employees must receive their pay at least once a month. The payslip is typically detailed, showing gross pay and all deductions.
Beyond the base salary, your employee's compensation can include other payments.
- Bonuses and Commissions: You must report and tax any extra payments like bonuses or commissions within the pay cycle they are paid.
- Recreation Payment (Dmei Havraa): After an employee completes one year with your company, you are required to pay them an annual recreation payment. The amount depends on their seniority and is typically paid in the summer months.
Overtime & minimums
You must pay employees at least the national minimum wage. As of April 2024, the minimum wage is NIS 5,880.02 per month.
For any hours an employee works beyond their standard day, you must pay overtime.
- First two hours: Pay 125% of the employee's regular hourly rate.
- After two hours: Pay 150% of their regular rate for any additional hours.
Employer taxes and contributions
As an employer, you contribute a percentage of the employee's salary to social security and pension funds. These payments are mandatory. The total employer cost is typically between 20.8% and 24.33% of an employee's salary.
Contribution | Employer Rate | Notes |
---|---|---|
National Insurance | 3.55% - 7.6% | This covers various social benefits. The rate varies based on the employee's income. |
Pension Fund | 6.5% | A mandatory contribution to the employee's retirement savings. |
Severance Pay (Pitzuim) | 8.33% | Set aside in the employee's pension fund. It is paid out if the employee is laid off. |
Employee taxes and deductions
Employees also contribute to social security and health insurance from their gross salary. You must deduct these amounts and pay them to the government.
Deduction | Employee Rate | Notes |
---|---|---|
National Insurance | 0.4% - 7.0% | The rate depends on income. |
National Health Insurance | 3.1% - 5.0% | This is a mandatory health contribution, also based on income. |
Pension Fund | 6.0% | The employee's direct contribution to their retirement fund. |
Income Tax | 10% - 50% | Israel uses a progressive tax system. Higher earnings are taxed at higher rates. |
How an Employer of Record, like Rivermate can help with payroll taxes and compliance in Israel
An Employer of Record (EOR) manages monthly payroll calculations, employer contributions, and tax filings in-country on your behalf. Rivermate handles registrations, payslips, statutory reporting, and remittances to authorities so you stay compliant with local rules and deadlines—without setting up a local entity. Our specialists monitor regulatory changes and ensure correct rates, thresholds, and caps are applied to every payroll cycle.
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Benefits and Leave in Israel
In Israel, employee benefits and leave are a mix of legal requirements and common practices. You'll find a solid foundation of statutory leave and benefits. Many companies, especially in the tech sector, offer extra perks to attract and keep top talent. This creates a competitive landscape where benefits play a big role.
Statutory leave
Here's a breakdown of the legally required leave you must provide:
- Annual Leave: The amount of paid vacation your employees get increases with their seniority. For the first five years, the minimum is 12 working days for employees on a five-day work week. This entitlement grows to 14 days in the sixth year and 15 in the seventh, with an additional day for each subsequent year up to a maximum.
- Sick Leave: Employees accumulate 1.5 sick days for each month of work, with a cap of 90 days. You don't pay for the first day of sickness. For the second and third days, you pay 50% of their regular wage, and from the fourth day on, it's 100%.
- Maternity Leave: An employee who has worked for you for at least a year is entitled to 26 weeks of maternity leave. The National Insurance Institute pays for 15 of these weeks. For employees with less than a year of service, the leave is 15 weeks.
Public holidays & regional holidays
Your employees are entitled to paid leave for public holidays. The number of days can vary based on the employee's religion. Here are the main public holidays in Israel:
Holiday | 2025 Date |
---|---|
Passover (First Day) | April 13 |
Passover (Last Day) | April 19 |
Independence Day | April 29 |
Shavuot | June 2 |
Rosh Hashanah | September 23-24 |
Yom Kippur | October 2 |
Sukkot (First Day) | October 7 |
Simchat Torah | October 14 |
Typical supplemental benefits
To stay competitive, many companies offer more than the legal minimum. Here’s a look at statutory versus common non-statutory benefits:
Statutory Benefits | Non-Statutory Benefits |
---|---|
Minimum Wage | Supplemental Health Insurance |
Annual Leave | Education Fund (Keren Hishtalmut) |
Sick Leave | Wellness Programs (gym memberships, etc.) |
Maternity & Paternity Leave | Meal Stipends or Vouchers |
Public Holidays | Company Car or Transportation Allowance |
Pension Contributions | Stock Options or Equity |
Severance Pay | Annual Bonuses |
National Insurance Contributions | Professional Development Budgets |
How an EOR can help with setting up benefits
Setting up a benefits plan in a new country can be complex. An Employer of Record (EOR) simplifies this process for you.
An EOR already has a legal entity in Israel. This means you don't have to go through the time and expense of setting one up yourself. They handle all the legal and HR responsibilities that come with hiring employees.
Here's how an EOR can help you with benefits:
- Compliance: An EOR ensures your benefits package complies with all of Israel's labor laws. This saves you from having to become an expert in local regulations.
- Speed: You can hire and onboard employees in a fraction of the time it would take to do it on your own.
- Benchmarking: An EOR can provide insights into what other companies in your industry are offering. This helps you create a competitive benefits package that attracts top talent.
- Administration: The EOR manages the day-to-day tasks of benefits administration. This includes everything from enrolling employees in plans to handling payroll deductions.
By partnering with an EOR, you can offer your employees in Israel a comprehensive and compliant benefits package from day one.
How an Employer of Record, like Rivermate can help with local benefits in Israel
Rivermate provides compliant, locally competitive benefits—such as health insurance, pension, and statutory coverages—integrated into one EOR platform. We administer enrollments, manage renewals, and ensure contributions and withholdings meet country requirements so your team receives the right benefits without added overhead.
Termination and Offboarding in Israel
Ending employment in Israel is a structured process with clear legal steps. It is not as simple as giving a notice and a final paycheck. Israeli labor law protects employees, and you must follow specific procedures. If you misstep, you could face financial penalties and legal trouble. A key part of this process is the pre-termination hearing, known as a "shimu'a". This hearing is a legal requirement where you present your reasons for considering termination, and the employee has a right to respond.
Notice periods
You must provide employees with written notice before termination. The length of the notice period depends on how long the employee has worked for you.
For salaried employees:
- First 6 months: 1 day of notice for each month of work.
- Months 7 to 12: 6 days of notice, plus an additional 2.5 days for each month worked after the sixth month.
- After 1 year: 1 full month of notice.
For hourly employees, the notice period is:
- First year: 1 day for each month worked.
- Second year: 14 days, plus 2 days for every two months of work.
- Third year: 21 days, plus 1 day for every two months of work.
- After three years: 1 full month of notice.
Severance pay
Terminated employees in Israel are generally entitled to severance pay. The standard is one month's salary for each year of service. The calculation uses the employee's average pay over the last 12 months. Some employers contribute a portion of the employee's monthly salary to a severance fund, which can offset this cost.
How Rivermate handles compliant exits
At Rivermate, we manage the entire offboarding process to ensure you comply with Israeli law. We take a clear and structured approach to every employee exit.
Our process includes:
- Pre-termination Hearing: We guide you through the mandatory "shimu'a" hearing. We help you prepare the written invitation with the reasons for the potential termination and ensure the employee has adequate time to prepare.
- Documentation: We handle all necessary paperwork. This includes the final decision letter and any settlement agreements. We make sure everything is clear and properly documented.
- Final Payments: We calculate and process all final payments. This includes the employee's last salary, unused vacation days, and any severance pay they are owed.
- Pension Fund Release: We ensure a prompt release of the employee's pension funds.
- Company Property: We coordinate the return of all company property, such as laptops and phones.
Visa and work permits in Israel
Getting the right visas and work permits in Israel can be complex. The process requires close cooperation between you and your employee. It's important to understand the different visa types and what's practical for your business. Planning ahead is key to a smooth process.
Employment visas & sponsorship realities
The most common route for foreign workers is the B/1 work visa. This visa is for individuals who have a job offer in Israel and have obtained a work permit. The B/1 visa is typically valid for one year and can be renewed.
Here is a breakdown of the process:
- Employer's Role: You, as the employer, must start the process by applying for a work permit from the Ministry of Interior.
- Employee's Role: Once the permit is approved, your employee applies for the B/1 visa in their home country.
- Arrival in Israel: Upon arrival, the employee must register with the local authorities to finalize the process.
An Employer of Record (EOR) can help you navigate this process. They can manage the paperwork and ensure compliance with local laws. However, the Israeli government has not fully established regulations for EORs to sponsor work visas. This means that applications submitted by an EOR may face extra questions and scrutiny. The authorities prefer the company where the employee will physically work to be the direct sponsor.
The most practical route to obtaining a work permit is through direct sponsorship by your company if you have a legal entity in Israel. If you do not have a local entity, an EOR can still be a valuable partner, but you should be aware of the potential challenges.
Business travel compliance
For short-term business trips, many nationalities can enter Israel for up to 90 days without a visa for activities like meetings and negotiations. However, any "productive work," such as hands-on repairs or active consulting, requires a work visa, regardless of the trip's length.
Starting in January 2025, visitors from visa-exempt countries will need an Electronic Travel Authorization (ETA-IL) before traveling to Israel. This authorization is for stays up to 90 days.
For short-term work assignments, the Short-Term Employment Authorization (SEA) offers a faster alternative to the standard B/1 visa process. The SEA program allows for work in Israel for up to 45 days in a calendar year. The application process is quicker, taking about 6-10 working days for approval.
How an Employer of Record, like Rivermate can help with work permits in Israel
Navigating work permits can be complex and time‑sensitive. Rivermate coordinates the entire process end‑to‑end: determining the right visa category, preparing employer and employee documentation, liaising with local authorities, and ensuring full compliance with country‑specific rules. Our in‑country experts accelerate timelines, minimize refusals, and keep you updated on each milestone so your hire can start on time—legally and confidently.
Frequently asked questions about EOR in Israel
About the author

Lucas Botzen
Lucas Botzen is the founder of Rivermate, a global HR platform specializing in international payroll, compliance, and benefits management for remote companies. He previously co-founded and successfully exited Boloo, scaling it to over €2 million in annual revenue. Lucas is passionate about technology, automation, and remote work, advocating for innovative digital solutions that streamline global employment.