Employer of Record in Palestine

An Employer of Record (EOR) in Palestine is a company that legally hires employees on your behalf. This allows you to build a team in Palestine without setting up a local company. The EOR takes care of all the formal employment tasks, which frees you up to focus on your business. For an EOR provider like Rivermate, this means managing everything from contracts to payroll.

How an Employer of Record (EOR) Works in Palestine

Using an EOR in Palestine simplifies hiring. Here is how it works:

• You find the talent. You identify the person you want to hire in Palestine.
• The EOR becomes the legal employer. The EOR hires the employee for you under a local employment contract that follows Palestinian labor law.
• They handle the paperwork. The EOR manages payroll, taxes, benefits, and makes sure everything is compliant.
• Your employee starts working for you. While the EOR handles the HR and legal tasks, you manage your employee's day-to-day work.

Why use an Employer of Record in Palestine

An EOR can help you hire in Palestine quickly and without the cost and risk of setting up a local entity. It's a practical solution for companies that don't have a legal presence in Palestine.

Here are some key benefits:

• Compliance with local laws. An EOR ensures that you follow all local labor laws, including rules on working hours, paid leave, and termination. The main law governing employment is the Palestinian Labour Law No. 7 of 2000. This law sets standards for things like contracts, working conditions, and health and safety.
• Local expertise. An EOR understands the local market. They can help you create a competitive benefits package to attract top talent.
• Saves time and resources. The EOR manages all HR administration, which saves you time and lets you focus on your business goals.
• Faster entry into the market. Setting up a new company can take months. With an EOR, you can hire employees and start operating in a new market much faster.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Palestine 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 Palestine.

Hiring in Palestine requires understanding a unique legal framework. You'll find a workforce that is eager and educated, with a growing number of professionals in tech and other skilled fields. The Palestinian Labor Law provides the foundation for employment, and it's important to get the details right to build a strong and compliant team.

Employment contracts & must-have clauses

A written employment contract is a must in Palestine. The contract should be in Arabic and clearly outline the terms of employment. This protects both you and your employee.

Here are the essential clauses to include in your employment contracts:

• Parties' Information: Full names and addresses of both the employer and employee.
• Job Details: A clear description of the employee's role and responsibilities.
• Start Date: The official start date of the employment.
• Place of Work: The primary location where the employee will work.
• Compensation: Details of the salary, any allowances, and how often the employee will be paid.
• Working Hours: The daily and weekly work schedule.
• Leave Entitlements: Information on annual leave, sick leave, and public holidays.
• Probationary Period: If there is a probation period, its duration must be stated.
• Notice Period: The required notice for termination for both the employer and employee.

Probation periods

You can include a probationary period in your employment contracts. This gives both you and the new employee time to see if the fit is right.

• The maximum length of a probation period is three months.
• This period cannot be extended for the same employee with the same employer.
• During probation, either party can terminate the contract with a shorter notice period than what is required after probation.

Working hours & overtime

The standard work week in Palestine is 45 hours, spread over six days.

Public & regional holidays

Employees in Palestine are entitled to paid public holidays. The exact number can vary slightly each year as some holidays are based on the lunar calendar. For 2025, the following are the expected public holidays:

• New Year's Day: January 1
• Orthodox Christmas: January 7
• The Prophet's Ascension: January 27
• Eid al-Fitr: March 31
• Eid al-Fitr Holiday: April 1-2
• Labour Day: May 1
• Eid al-Adha: June 7
• Eid al-Adha Holiday: June 8-9
• Islamic New Year: June 27
• The Prophet's Birthday: September 5
• Independence Day: November 15

Hiring contractors in Palestine

You might consider hiring independent contractors in Palestine. This can offer flexibility, but it comes with risks. The main risk is misclassification. If a authorities determine that your contractor is actually an employee, you could face penalties. These can include back pay for benefits and unpaid taxes.

Here are some factors that distinguish an employee from an independent contractor:

An Employer of Record (EOR) can help you avoid these risks. An EOR legally employs the worker on your behalf. This means the EOR handles all the legal and administrative tasks of employment. They ensure compliance with Palestinian labor laws, manage payroll and taxes, and provide statutory benefits. This lets you focus on managing your team's day-to-day work without the legal complexities of international hiring.

Navigating compensation in Palestine means understanding local regulations and economic factors. Your salary offers depend on the cost of living, demand for specific skills, and the size of your company. To attract and keep the best talent, you need to build competitive and compliant compensation packages. This means following labor laws on minimum wage, work hours, and benefits.

Payroll cycles & wage structure

The most common payroll cycle in Palestine is monthly. You will typically pay your employees once a month, often near the end of the month. Some companies choose to pay twice a month, but this is less frequent. You can pay salaries through a direct bank transfer, which is the most common method.

Beyond the basic salary, your compensation packages often include bonuses and allowances. These can be legal requirements or common practices to attract talent.

Common additions include:

• Transportation Allowance: To cover commuting costs.
• Housing Allowance: This is less common but may be offered to employees who are relocating.

Overtime & minimums

The standard workweek in Palestine is a maximum of 45 hours. You must pay overtime at a rate of 150% of the regular salary for any hours worked beyond the standard 45.

Palestine has a national minimum wage to support a basic standard of living for workers. You must ensure that all your full-time employees earn at least this amount. The current minimum wage is 1,880 Israeli Shekels (ILS) per month.

Employer taxes and contributions

You are responsible for making social security contributions on behalf of your employees. These contributions fund benefits like pensions and disability support. Please note that the social security system has been subject to legal changes and debate.

Employee taxes and deductions

You must withhold income tax from your employees' salaries. This is done through a Pay As You Earn (PAYE) system. The income tax rates are progressive, meaning higher earners pay a larger percentage of their income in tax. Employees also contribute to social security from their gross salary.

In Palestine, your employee benefits package is a mix of legally required leave and optional perks. Understanding these helps you attract and keep great people. It's about more than just following the rules. A good benefits plan shows your team you value them. This builds loyalty and a strong company culture.

Statutory leave

Palestinian labor law sets the minimum leave you must provide.

• Annual Leave: Employees get at least 14 paid days off per year for the first five years of service. After five years, this increases to 21 days.
• Sick Leave: An employee can take 14 days of sick leave at full pay. They can take another 14 days at half pay. A medical certificate is often required.
• Maternity Leave: Female employees who have worked for you for at least 180 days get 10 weeks of paid maternity leave. At least six of these weeks must be taken after the baby is born.
• Paternity Leave: Fathers are entitled to three days of paid paternity leave.
• Hajj Leave: Employees may be entitled to paid leave to perform the Hajj pilgrimage once during their employment.
• Weekly Rest: Employees are entitled to a paid rest day each week, which is typically Friday.

Public holidays & regional holidays

Employees in Palestine get paid time off for public holidays. Some holidays follow the lunar calendar, so their dates change each year.

Typical supplemental benefits

To be a competitive employer, you should offer more than the legal minimum. Here’s a look at both required and common optional benefits.

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 for you.

An EOR acts as the legal employer for your staff in Palestine. They handle all the administrative tasks. This includes payroll, taxes, and benefits.

Here's how an EOR helps:

• Compliance: An EOR ensures your benefits package meets all local labor laws. This avoids legal trouble.
• Local Expertise: They understand the local market. They can help you create a competitive benefits package that attracts top talent.
• Administration: The EOR manages the entire benefits administration process. This saves you time and resources.
• Onboarding: They handle the onboarding of new employees, including explaining their benefits.

Using an EOR lets you focus on your business goals. You can be confident that your team in Palestine is well taken care of.

When an employment relationship in Palestine ends, you need to follow a structured process. This process, known as offboarding, ensures you handle the employee's departure in a compliant and professional way. It involves everything from giving the correct notice to handling final payments. Managing this process correctly protects your company and provides a smooth transition for the departing employee.

Notice periods

When terminating an employment contract in Palestine, you must provide a notice period. The length of this period depends on how long the employee has worked for you.

You must give the employee written notice of termination. Failing to provide the correct notice period may require you to pay the employee in lieu of notice. In cases of serious misconduct by the employee, you may be able to terminate the contract without notice.

Severance pay

Employees in Palestine are entitled to severance pay, also known as an end-of-service bonus. To be eligible, an employee must have completed at least one year of service. The payment is calculated as one month's wage for each year of service, based on the employee's last wage.

You must pay all outstanding wages, accrued leave, and severance pay to the employee upon termination. It's important to document all aspects of the termination process, including the notice, reasons for termination, and final payments.

How Rivermate handles compliant exits

Navigating the details of Palestinian labor law can be complex. Rivermate simplifies the offboarding process to ensure you remain compliant every step of the way.

Here’s how we help:

• Compliance review: We review each termination case to ensure it meets the requirements of Palestinian labor law.
• Documentation: We prepare all necessary documentation, including the termination notice and final pay calculations.
• Clear communication: We help you communicate the termination decision and next steps to your employee clearly and respectfully.
• Final payments: We manage the final payment process, ensuring your employee receives all entitled wages, benefits, and severance pay on time.

By handling these critical steps, we help you manage employee exits smoothly and professionally, reducing the risk of legal issues.

Navigating visas and work permits for Palestine presents a unique set of challenges. Entry into the Palestinian territories is controlled by Israeli authorities, which means there is no separate Palestinian visa. Foreign nationals must first comply with Israeli entry requirements. Once in the country, if the purpose is employment, a work permit from the Palestinian Ministry of Labor is necessary to work legally. This dual-layered process requires careful attention to the regulations of both Israeli and Palestinian authorities.

Employment visas & sponsorship realities

For a foreign national to work in Palestine, they need a work permit from the Palestinian Ministry of Labor, and this requires sponsorship from an employing entity within Palestine. The employer is responsible for initiating and supporting the application process.

Here's what that typically involves:

• A valid job offer from a company registered in Palestine.
• Proof of relevant qualifications and experience for the job.
• A completed application form.
• A copy of the individual's passport.
• The employment contract.
• A supporting letter from the employer explaining the need for a foreign worker.

An Employer of Record (EOR) can act as the legal employer, sponsoring the work permit and handling all local HR tasks. This includes payroll, taxes, and ensuring compliance with Palestinian labor law, which can be a practical solution for companies that don't have a legal entity in Palestine.

Business travel compliance

For short-term business visits, such as attending meetings or conferences, a business visa is generally required. The process for obtaining one involves:

• A business letter from the sending company.
• An invitation letter from the sponsoring company in Palestine.
• A valid passport with at least six months of remaining validity.
• A completed visa application form.
• Recent passport-style photos.
• A copy of your round-trip tickets or itinerary.

It's important to note that while some sources state a business visa is necessary, others indicate that no visa is required for Palestine itself, with entry being subject to Israeli regulations. Given this, it is highly advisable to check the most current travel advisories and border crossing regulations before your trip to ensure a smooth entry.