In Israel, the law mandates a comprehensive set of benefits for all employees. These benefits are designed to ensure a minimum level of security and financial protection for workers.

Paid Leave

Employees in Israel are entitled to various forms of paid leave:

• Annual Leave: Employees are entitled to a minimum of 12 paid vacation days per year, increasing with seniority. The number of vacation days can go up to a maximum of 28 days depending on the number of years employed by the same company.
• Public Holidays: Israel observes various public holidays throughout the year, with employees receiving paid time off on these days. The exact number of public holidays can vary slightly depending on the specific Jewish calendar year.
• Sick Leave: Employees accrue sick leave entitlement, typically around 1.5 days per month. This accumulated sick leave can be used for personal illness or injury.
• Maternity Leave: Female employees are entitled to paid maternity leave following childbirth. The exact duration can vary depending on specific circumstances, but typically ranges from 14 to 26 weeks.
• Paternity Leave: Fathers are entitled to one week of paid paternity leave following the birth of a child.
• Bereavement Leave: Employees receive paid leave in the case of a death in the immediate family.

Social Security and Insurance

• National Insurance: Both employers and employees contribute a percentage of the employee's salary towards National Insurance, a social security program that provides benefits such as unemployment payments, disability benefits, and old-age pensions.

Additional Mandatory Benefits

• Severance Pay: In most cases, employees are entitled to severance pay upon termination of their employment. The specific amount depends on factors like salary, length of service, and reason for termination.

In Israel, employers often offer a range of optional benefits to attract and retain top talent, improve employee well-being, and boost overall satisfaction. These benefits can be categorized into health and wellness, work-life balance, financial benefits, and other perks.

Health and Wellness

• Supplemental Health Insurance: Many companies offer supplemental plans to fill the gaps not covered by Israel's primary health insurance. These plans often provide coverage for dental care, vision, and other services.

• Wellness Programs: On-site gyms, yoga classes, or subsidies for gym memberships are popular ways to promote a healthy lifestyle among employees.

Work-Life Balance

• Flexible Work Hours: Many businesses in Israel are becoming more flexible with work schedules, allowing employees to achieve a better work-life balance.

• Childcare Assistance: Free or subsidized childcare can be a game-changer for working parents. Some employers offer this benefit to ease the burden of childcare costs.

Financial Benefits

• Transportation Allowances: Employers often provide a daily allowance to help cover employee commute costs, with the amount varying based on the distance between home and office.

• Meal Subsidies or Cafeteria Discounts: Offering subsidized meals in a cafeteria or providing discounts at nearby restaurants can be a cost-effective perk for employees.

• Discounts: Some companies offer employees discounts on various products or services, including their own offerings or those of partner businesses.

Other Perks

• Company Car: In certain cases, employers may provide a car for work-related purposes or even for personal use.

• Holiday Gifts: Many employers give gifts to their employees during major holidays like Rosh Hashanah and Pesach. These gifts can range from coupons to personal items, with the value often increasing with seniority.

• Professional Development: Some employers may cover the cost of professional licenses, memberships in relevant organizations, or even provide tuition reimbursement for further education.

Israel's universal healthcare system mandates health insurance for all residents. This system is a blend of National Health Insurance and Health Maintenance Organizations (HMOs). The National Insurance Institute (NII) oversees the National Health Insurance, a mandatory public program that covers essential medical services. It is funded through contributions from employees, employers, and the self-employed. On the other hand, HMOs are non-profit organizations chosen by residents to receive their healthcare services. They provide a set of basic medical services, also known as the "health basket," as defined by the Ministry of Health.

Employer Responsibilities

Employers in Israel have a legal obligation to register their employees with the NII and ensure their contributions to national health insurance are deducted from their salaries alongside social security contributions. While not mandatory, many employers in Israel provide supplemental health insurance plans to their employees. These plans offer additional coverage beyond the basic services provided by the national health basket.

Employee Responsibilities

Employees contribute a portion of their salary towards National Health Insurance, which is deducted by their employer and remitted to the NII. Employees also have the right to choose their preferred HMO from among the various options available.

In Israel, employees have access to a two-pronged approach to retirement security, which includes both mandatory and voluntary options. Understanding these plans is crucial for both employers and employees for informed financial planning.

State Pension

The cornerstone of Israel's retirement system is the state pension. All Israeli residents aged 18 and over contribute to this program through mandatory payroll deductions. To qualify for a state pension upon reaching retirement age (currently 67 for men and 62 for women), individuals must have at least 12 years of contributions. The state pension provides a basic monthly benefit, with the amount determined by pre-retirement earnings and contribution history. It's important to note that this benefit may be means-tested until the recipient reaches 70, potentially reducing the amount for high earners.

Voluntary Retirement Savings Plans

While the state pension provides a foundation, many Israelis participate in voluntary retirement savings plans to supplement their income after retirement. Here are the main options:

• Pension Funds (Keren Pensia): These are long-term investment vehicles offering various risk-return profiles. Contributions are tax-deductible, and investment earnings are tax-deferred until withdrawal at retirement. There are two main types:

  • Old Pension Funds: Offer guaranteed benefits alongside market-linked returns, but come with stricter withdrawal regulations.
  • New Pension Funds: Provide more flexibility in investment choices and withdrawal options, but benefits are not guaranteed.

• Provident Funds (Keren Hishtalmut): These are another popular option, offering tax-deductible contributions and tax-deferred growth. However, unlike pension funds, provident funds typically don't offer guaranteed benefits or survivor benefits upon death.

• Life Insurance with Savings Component: Some life insurance policies integrate a savings component, allowing policyholders to accumulate funds for retirement alongside life insurance coverage.

Many Israeli employers contribute financially to their employees' retirement savings. This can be through matching contributions to pension funds or provident funds, making these plans even more attractive for employees.