Find your employer of record in Israel

• Employees can receive cell phones or cellphone allowances as a taxable benefit.
• There are meal allowances or vouchers.
• Study fund – The employer can contribute a monthly amount of up to 7.5% of the employee’s monthly salary. And the employee contributes an amount of 2.5% of their salary. Then, after 6 years, the accumulated amount in the fund may be released tax-free. Plus, there is a tax-free ceiling set at 15,712 Shekel, which is updated every year.
• Holiday gifts – There are taxed gifts that are provided twice a year for Rosh Hashana and Passover holidays.
• In some industries, there is additional annual leave.

Whether it is for work or business purposes, professionals who relocate to Israel must use the B/1 work visa. The B/1 work visa combines a work permit and an employment visa, which are both necessary.

And this business visa is given to foreigners who have obtained approval to stay in Israel for a limited time for work purposes. Generally, the authorities issue this visa for scientists, high-tech workers, experts, and artists.

Visa Requirements

To obtain this permit, the applicant must meet the following work visa requirements:

• Obtain approval from the Ministry of the Interior.
• Approve the visa interview.
• Get a verified certificate of good conduct.
• Obtain a medical exam certification. It must be performed by a hospital recognized by the mission or an approved clinic.
• Meet biometrics requirements (fingerprints and photographs).
• Complete the Israeli work permit visa application form.
• Provide two passport-size photos.
• Submit a signed document from the employer stating they are offering an employment position.

Once the applicant arrives in Israel, customs will be in charge of stamping the visa and making it valid for 30 days. After that, it is possible to extend the visa for up to 1 year, allowing the holder to leave and enter the country as many times as they need.

Other Requirements

On the other hand, specialists who work in academic or non-academic fields for more than 3 months must meet the following requirements:

• Have a higher salary (at least double the average wage).
• Submit their CV or resume.
• Provide their academic certificates. If diplomas are not in English, they must be officially translated into Hebrew. Then, an Israeli notary will notarize these documents.
• Submit a copy of their passport, which must be valid for at least 1 year and 3 months from the start of the application process.
• Complete and sign all application forms.
• Power of Attorney.
• Provide 3 passport-size photos.
• Submit marriage and birth certificates (for children under 18) in case the applicant has any accompanying family members. And these documents must be original and with apostille.
• Provide a police clearance, which must have been issued within the last 6 months.
• Submit their medical clearance, issued within the last 3 months.

For these employees, the maximum stay/work period is 5 years and 3 months from their start date in Israel. In addition, note that the visa may take between 2 and 3 months to process. By requesting the services of an Employer of Record in Israel, you can complete the application process in less time.

In Israel, the standard rate of VAT is 17.00%. In case you desire to perform your employer functions, make sure to request the solutions of an Employer of Record in Israel, as well as Contractor Management Services. And with these services, it will be easier to run your company in Israel while complying with the laws.

Termination Process

Termination Process

The standard termination process in Israel stipulates that employers have the right to terminate an employee’s employment in good faith. And that it must be for valid reasons and in compliance with applicable laws, written employment contracts, workplace customs, and collective bargaining agreements.

During the process of termination of employment, there will be a hearing procedure. In other words, the employer must provide the employee with a hearing invitation. In this hearing invitation, the employer details the reasons for the intended termination of employment. And the employer must provide the employee with enough time to prepare for the hearing. The worker’s manager will be in charge of conducting the hearing. Furthermore, during the hearing, the employee needs to receive an opportunity to express their point of view about the employer’s intention to terminate their employment.

After the hearing ends, the employer should take the time to seriously consider the arguments that the employee raised. And the decision that the employer makes should be communicated to the employee in writing. It is suggested that the employer provides a termination letter in person, around 48 hours from the time the hearing was held.

On the other hand, in certain circumstances before deciding on the termination of employment, employers must consider whether they can offer the worker an alternative position, according to the Labor courts’ decisions.

Employers must provide the worker with prior written notice when ending their employment under the Prior Notice Before Termination Law. Besides, note that an employer may opt for paying the employee in lieu of notice. It would be calculated as an equal salary payment to that which the worker would have received had the worker continued to work throughout the notice period. With an Employer of Record in Israel, employers can easily calculate their employees’ payments.

Notice Period

In Israel, the worker’s length of service determines the notice period they must serve.

If an employee served between 0 and 6 months, they will get one day’s notice for each month of employment. And they can accumulate 2.5 days of notice for each month of service following their 6th month (until their first year). Lastly, it will be required a 30-day notice following 1 year of service.

Severance Pay

Employees in Israel who are being dismissed can receive severance pay upon completing 1 year of service. And the employer must calculate their severance pay at 1 month’s salary multiplied by the number of years of employment. Evidently, this calculation must include work for part of a year.

Apart from this, the employer must also carry out monthly contributions equivalent to 8.33% of the worker’s monthly salary payment. According to Section 14 Arrangement, these contributions are towards the severance pay component. And the accrued amount is to be released to the worker upon termination. Furthermore, this applies even if the employee resigned without circumstances that would entitle the employee to severance pay if the employee was not subjected to the Section 14 Arrangement.

Probation Period

According to the Labour Law in Israel, probationary periods are allowed. And during this time, the company considers the employee a regular employee for all intents and purposes. Furthermore, the employment contract or a collective agreement must stipulate the probationary period.

Paid Time Offs

Employees should receive at least 16 days of annual leave for their first 5 years of service. Then, it can increase to 18 days from their 6th year and 21 days from their 7th year. Lastly, from their 8th year onward, they receive one additional day per year of service up to a maximum of 28 days.

Furthermore, employees who have a 6-day workweek can take 6 days of absence from work for every 7 days of leave accrued by law (since within 7 days of leave, a Saturday is included, which is the rest day per week at workplaces where employees work 6 days a week).

On the other hand, employers must calculate annual leave payments at the regular salary pay rate.

Public Holidays

There are 9 national holidays throughout the year.

Vacation Holidays

There are 16 vacation holidays throughout the year.

Sick Days

Employees can accrue sick leaves at a rate of 1.5 days per month and with a maximum of 90 days total. Furthermore, the payment for sickness depends on the length of leave as follows:

• For the first day of sick leave – the employee does not receive any payment.
• For the second and third day of sickness – the employee receives 50.00% of their regular pay.
• From the fourth day onwards – the employee receives 100.00% of their regular pay.

And upon return, the employee must provide their medical certificate from a medical professional. With an Employer of Record, calculating sick days can be an easy task.