Article
4 min read
Employer Costs for an Employee in Israel (2026 Guide)
Employer of record
Global hiring
Author
Jemima Owen-Jones
Last Update
February 04, 2026
Quick Answer: What is the total employer cost for a $100,000 salary in Israel?
For an employee earning $100,000 USD annually in Israel, employers can expect mandatory employer costs of approximately $33,151 USD per year, bringing total compensation costs to $133,151 USD.
Estimated total employer cost (Israel): ~33.2% on top of gross salary (example estimate).
Hiring in Israel can be a great way to access highly skilled talent—whether you’re expanding into the market, building a remote team, or hiring your ideal candidate locally.
But even when two employees earn the same salary, the total employer cost varies by country due to statutory contributions, payroll rules, and mandatory benefits.
This guide provides a ballpark estimate of the mandatory employer cost of hiring an employee in Israel, using an example salary of $100,000 USD per year.
What’s included in this estimate?
This estimate includes mandatory employer-side statutory costs that may apply when hiring an employee in Israel, such as:
- Severance fund contributions
- Pension fund contributions
- National Insurance contributions (Bituah Leumi)
- Monthly travel allowance (common/expected in practice)
- Pension provider administrative fee
- Seniority pay (where applicable)
- Keren Histalmut (education fund) (included in this estimate; may be optional depending on role/employer policy)
What’s not included in this estimate?
This estimate generally does not include additional costs such as:
- Paid annual leave (vacation)
- Sick pay
- Private health insurance
- Employer-provided benefits or allowances beyond those listed
- Bonuses, equity, or commissions
- Equipment and onboarding expenses
- Costs that vary by employee category, industry, or contract structure
Why employer costs vary in Israel (and globally)
Employer costs can differ depending on:
- Salary thresholds and contribution rules
- Whether Keren Histalmut is offered and at what level
- Whether seniority pay applies and how it’s paid
- Employer pension and severance contribution structure
- Changes in regulation year to year
- Currency exchange rate fluctuations (if you pay in a different base currency)
Estimated employer cost breakdown for Israel
Below is an estimated breakdown of mandatory employer costs for hiring an employee in Israel earning $100,000 USD/year.
Example salary used in this estimate
- Annual gross salary: $100,000 USD
- Annual gross salary (approx.): ₪365,000 ILS
Employer mandatory costs (estimated)
| Employer Cost Category | Estimated Annual Cost (ILS) | Estimated Annual Cost (USD) | Notes |
|---|---|---|---|
| Severance | ₪30,404 | $8,330 | Employer contribution to severance fund |
| Pension Fund | ₪23,725 | $6,500 | Employer pension contribution |
| Monthly Travel Allowance | ₪3,000 | $822 | Allowance benchmarked to travel costs |
| Agent Pension Fee | ₪569 | $156 | Pension provider/admin fee |
| Keren Histalmut (Education Fund) | ₪14,141 | $3,874 | Often optional depending on policy |
| Seniority Pay | ₪25,080 | $6,871 | Based on length of service |
| Bituah Leumi | ₪24,084 | $6,598 | National Insurance contribution |
| Total Estimated Employer Costs | ₪121,003 | $33,151 | Total mandatory employer cost estimate |
Total compensation cost (salary + mandatory employer costs)
| Total | ILS | USD |
|---|---|---|
| Gross Salary | ₪365,000 | $100,000 |
| Mandatory Employer Costs | ₪121,003 | $33,151 |
| Total Compensation Cost | ₪486,003 | $133,151 |
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FAQs
What mandatory social security costs do employers in Israel pay?
Employers in Israel typically pay mandatory social security costs through Bituach Leumi, which is managed by the National Insurance Institute. These contributions help fund benefits such as healthcare, disability, unemployment support, and maternity benefits.
What is Bituach Leumi in Israel?
Bituach Leumi is Israel’s national insurance program. An Israeli employer contributes to Bituach Leumi through payroll as part of statutory employer obligations, and it is one of the main non-salary costs when hiring locally.
What should employment contracts include in Israel?
Compliant employment contracts in Israel typically define salary, job duties, working hours, benefits, leave entitlements, notice period requirements, and termination conditions. Clear contract terms help reduce risk and support legal compliance.
What notice period applies in Israel?
The required notice period in Israel can depend on contract terms and the employee’s years of service. Employers should document notice requirements in the employment contract to ensure expectations are clear for both parties.
Do employees receive paid public holidays in Israel?
Yes. Employees are entitled to paid public holidays in Israel, depending on eligibility and employment terms. Public holidays increase the real cost of employment because employees are paid even when not working.
What sick leave entitlements apply in Israel?
Employees are entitled to sick leave under Israeli employment rules. Employers should plan for sick leave costs as part of total employment cost, even when sick leave does not appear as a separate line item in payroll tax estimates.
How do years of service affect employer costs in Israel?
In Israel, years of service can impact employment-related obligations such as severance-related entitlements and other tenure-linked benefits. This can increase the long-term cost of employment beyond base salary.
What do employees receive beyond base salary in Israel?
In addition to base salary, employees receive statutory benefits and employer-funded contributions such as pension deposits, severance fund contributions, and National Insurance coverage. Some roles may also include allowances like travel or education funds depending on employer policy.
Can an Employer of Record help companies hire in Israel?
Yes. If you don’t have a local entity, an Employer of Record can hire on your behalf as the legal employer in Israel, managing employment contracts, payroll, statutory contributions (including Bituach Leumi), and ongoing compliance—while you manage the employee’s day-to-day work.
Jemima is a nomadic writer, journalist, and digital marketer with a decade of experience crafting compelling B2B content for a global audience. She is a strong advocate for equal opportunities and is dedicated to shaping the future of work. At Deel, she specializes in thought-leadership content covering global mobility, cross-border compliance, and workplace culture topics.
