What is the payroll cycle in Israel?

Monthly payroll cycle, typically paid by the 9th of the following month. Payroll is paid in ILS (Israeli new shekel).

Can I run payroll in Israel without a local entity?

Yes. Through an Employer of Record (EOR), Gracemark employs your talent under Israel labor law and runs local payroll, no entity required.

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Payroll in Israel

Payroll in Israel runs in ILS (Israeli new shekel). Monthly payroll cycle, typically paid by the 9th of the following month. No general statutory 13th-month payment, but a mandatory annual recreation payment (Dmei Havraa) is required by law/collective agreements. Statutory employer contributions apply. Gracemark operates it end-to-end, humans, not tickets.

Get an Israel payroll quote Paying an existing team there? Tell us the headcount, email or phone is enough.

Currency

ILS, Israeli new shekel

Payroll cycle

Monthly payroll cycle, typically paid by the 9th of the following month.

Working week

Standard workweek is 42 hours (commonly 5x8.4 hours or 6 days); overtime is paid at 125% for the first two extra hours and 150% thereafter under the Hours of Work and Rest Law.

Minimum wage

National minimum wage is approximately NIS 5,880 per month, effective April 2024.

13th-month

No general statutory 13th-month payment, but a mandatory annual recreation payment (Dmei Havraa) is required by law/collective agreements.

Employer cost

Employer costs include National Insurance (Bituach Leumi) contributions of roughly 7.5% on the reduced-rate portion of salary and higher rates above it, plus mandatory pension contributions of 6.5% and severance provisions of 8.33% of salary under pension arrangements.

Probation

No fixed statutory probation period; commonly 3-6 months by contract, though pension enrollment must begin after set qualifying periods.

Notice period

Statutory notice scales with tenure (1 day per month in year one, up to 30 days after one year); severance pay of one month's salary per year of service is required for dismissal, financed through ongoing pension/severance fund contributions (Section 14 arrangement).

Two ways to run payroll in Israel

Own-entity payroll

For long-term presence in Israel. Gracemark manages statutory filings, pay runs, and year-end reporting under your entity, with a named operator on Western Asia time.

EOR-run payroll

No entity in Israel? Employ and pay talent under Gracemark's local infrastructure via EOR, onboard in 1–2 weeks (eor), no local incorporation.

Compliance essentials in Israel

Mandatory pension and severance (Pitzuim) funds accrue monthly
Annual 'recuperation pay' (Dmei Havraa) is owed
Notice and leave scale with tenure
Deep-tech, cyber and AI talent
Section 14 arrangement can simplify severance

Get a payroll quote for Israel

Send your headcount and salary band. We reply with employer burden, net-to-gross, and setup timeline, no sales scripts.

Get your Israel hiring plan

Send the role, a selected worker or an existing-team requirement in Israel. Get a written recommendation covering the model, cost categories, responsibilities and next steps. One hire is welcome; no meeting required.

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Deeper guide

Hiring guide: Israel →

Employ without entity

EOR services →

All countries

Global payroll overview →