GLOBAL EMPLOYER OF RECORD IN 190+ countries
Employer of Record in Israel
Add the talent your business needs in Israel without creating another company simply to make the hire. Acumen acts as your Employer of Record, helping you enter, test or expand the market while keeping incorporation tied to the scale of the opportunity.
GLOBAL EMPLOYER OF RECORD
Global coverage
Acumen International delivers global employment solutions across 190+ countries.
Strategic markets
Hiring and compliance support across North America, Europe, and Asia-Pacific.
Established jurisdictions
Lawful employment and payroll in regulated, compliance-intensive countries.
Growth economies
Expanding into new regions? Hiring support across fast-moving economies.
Risky and remote locations
Compliant employment solutions in jurisdictions with limited infrastructure.
Hire and retain Israeli talent without establishing a local entity, while protecting intellectual property, funding severance obligations and managing Israel’s distinctive employment requirements.
Acumen International supports international companies employing people in Israel, including software engineers, researchers, commercial teams and foreign specialists who need work authorisation.
Employer of Record services in Israel
As a Global Employer of Record, Acumen International holds an Israeli employment contract with each employee as the legal employer, and a service agreement with your company. You select the person, direct the work and own the results.
Acumen International employs software engineers, researchers, commercial teams and foreign specialists in Israel, and people in more than 190 countries, so a team in Israel can grow alongside hires elsewhere through one provider.
Where the right person has not yet been found, Acumen International can also run the search, from specialist recruitment to executive search, with background and education checks before the offer.
When companies hire in Israel through an Employer of Record
Retaining employees relocating to Israel
An employee makes aliyah under the Law of Return, or an Israeli national working overseas decides to return home. The company wants to retain their expertise without establishing an Israeli subsidiary.
Acumen International moves the employee onto Israeli payroll, pension and National Insurance while they continue working for the international business. Israeli citizens and permanent residents do not need work permits.
Acquiring specialist talent from Israeli technology companies
Restructuring in Israel’s technology sector can create opportunities to recruit experienced software engineers, semiconductor specialists and R&D managers.
Acumen International employs these professionals before the company incorporates in Israel. Qualifying computing positions are also exempt from the manpower contractor legislation’s nine-month assignment limit, making longer-term employment possible.
Establishing an R&D team before committing to a subsidiary
An international technology company recruits a small team to develop software, test a product or undertake a defined research programme.
Acumen International employs the team, giving the company access to Israeli technical capabilities without the costs and responsibilities of a subsidiary. The company can expand the operation or establish its own entity once the business case is proven.
Retaining personnel during restructuring
A company closes an Israeli subsidiary or ends a local distribution agreement but needs to retain selected employees.
Acumen International employs the technical, sales or customer-facing personnel the company wants to keep, so it does not maintain an entity solely for those employees.
Supporting clinical and research operations
A pharmaceutical, biotechnology or medical device company needs specialists working alongside Israeli hospitals, universities or commercial partners.
Acumen International employs the specialists for the programme, without a subsidiary for a limited assignment. The role and intended duration determine how the employment is planned under the nine-month rule.
Employing foreign technical experts
A non-Israeli specialist is needed for a semiconductor project, engineering assignment or other work requiring expertise that is not available locally.
Acumen International acts as the Israeli sponsoring employer and obtains the work authorisation that allows the specialist to work in Israel.
Employer of Record vs an Israeli entity vs contractors
| Employer of Record | Own Israeli entity | Independent contractor | |
|---|---|---|---|
| Setup | No company, tax file or National Insurance registration of your own | Company registration, Tax Authority and National Insurance files, pension arrangements | Service agreement only |
| Legal employer | Acumen International | Your Israeli company | None, until a court finds the relationship is employment |
| Ownership of inventions | Assigned to you, with the employee’s compensation claim waived | Owned by your company if the contract includes the waiver | Only what the service agreement assigns |
| Main legal exposure | Nine-month rule for roles outside computing | Corporate, tax and transfer pricing compliance | Reclassification with back pay, pension and severance |
| Best suited to | Teams of any size until, or instead of, an entity | Large, permanent operations | Genuinely independent, project-based work |
The Manpower Contractors Law and Employer of Record in Israel
The Employment of Employees by Manpower Contractors Law, 1996, governs every arrangement in which one company employs a person who works for another. Two rules matter most.
The nine-month rule. A supplied employee who works for the same client for more than nine consecutive months is treated as the client’s employee. Computer-related positions are excluded. Labour courts also look at the substance of the relationship, so a structure that breaks the employment to restart the count does not work. Whether the rule applies turns on how the role and the arrangement are classified, so not every Employer of Record engagement is treated the same way.
Equal terms. A supplied employee is entitled to the same conditions as the client’s comparable employees, taking into account the type of work and seniority, unless an extended collective agreement sets the terms. A client with its own staff in Israel therefore needs pay and benefits for Employer of Record hires aligned with theirs.
For a role outside the computer exception, the plan is set before the offer: either the role is time-limited, or the employment transfers to the client’s Israeli entity before the ninth month, with seniority and pension carried over.
Israel payroll and HR compliance
| Area | What is covered |
|---|---|
| Employment contract | A Hebrew-and-English contract that also serves as the written notice of terms the law requires. |
| Payroll | Monthly salary paid by the ninth of the following month, with a payslip that meets the Protection of Wages Law. |
| Tax and National Insurance | Income tax, National Insurance and health tax withheld, employer contributions paid and returns filed. |
| Pension and education fund | Contributions to the fund the employee chooses, from the date the extension order sets. |
| Statutory additions | Recuperation pay, travel-to-work costs and holiday pay at current rates. |
| Work permits | B/1 sponsorship, renewals and the medical insurance the permit requires. |
| Departures | Notice, final pay and release of the pension and severance funds within the statutory deadlines. |
Salary, working hours and payroll tax in Israel
Minimum wage. NIS 6,443.85 a month for full-time work from 1 April 2026. Extension orders and collective agreements set higher minimums in some sectors.
Working time. The full-time week is 42 hours, or 182 hours a month, usually worked Sunday to Thursday. Every employee has at least 36 consecutive hours of weekly rest, normally Saturday for Jewish employees and Friday or Sunday for others.
Overtime. 125% for the first two extra hours in a day and 150% after that, within 16 overtime hours a week. Fixed “global” overtime payments are common in professional contracts but must reflect the hours actually worked. Senior managers and roles that require a special degree of personal trust fall outside the hours and overtime rules.
Income tax. Progressive from 10% to 47%, reduced by personal credit points. The 2026 reform widened the 20% band to NIS 19,000 a month, lowering tax for anyone earning above NIS 16,150. A 3% surtax applies above NIS 60,130 a month.
Employee National Insurance and health tax. 4.27% on pay up to NIS 7,703 a month and 12.17% above it, up to NIS 51,910.
Items foreign employers often miss. Recuperation pay (dmei havra’a) after the first year, travel-to-work costs under the extension order and, in most professional packages, an education fund (keren hishtalmut). Employees can claim each of them as unpaid wages.
Employment contracts in Israel
Written terms. The employee must receive the main terms in writing, including role, pay, hours, rest days and pension fund, within 30 days of starting, and in writing again whenever they change.
Fixed-term contracts. Lawful, but repeated renewals for permanent work count as one continuous employment, with severance and notice rights accruing across the whole period.
Probation. No statutory probation period exists. Up to three months is usual, and it does not remove the duty to hold a hearing before dismissal.
Inventions. Under the Patents Law, an invention made in the course of employment belongs to the employer, but the employee may claim compensation for it unless that right has been waived. Investors and acquirers check for the waiver as a matter of routine.
Restrictive covenants. Non-competes are enforced only to protect a legitimate interest such as trade secrets, and only if reasonable in scope, time and territory. Confidentiality and non-solicitation clauses carry more weight.
Termination of employment in Israel
Hearing. Before deciding to dismiss, the employer must give written reasons, time to prepare and a real opportunity to respond. Dismissal without a fair hearing can lead to compensation even where the reason was valid.
Notice. For monthly-paid employees, one day per month of service in the first six months, two and a half days for each further month in the first year, and one month after a year. Payment in lieu is allowed.
Severance. After a year of service, a dismissed employee receives one month’s last salary for each year worked. Where severance contributions are made under Section 14 of the Severance Pay Law, they replace this payment for the period and rate they cover. Some resignations also carry severance, for example after a material worsening of conditions.
Protected employees. Dismissal is barred during maternity leave and, in most cases, for 60 days after it, and needs a permit from the Ministry of Labor during pregnancy and fertility treatment. Reservists cannot be dismissed during service, or within 30 days after a call-up of more than two days, without a permit from the Ministry of Defense’s employment committee, and no one may be dismissed because their spouse is serving.
Final settlement. Final salary, unused leave, recuperation pay and any severance balance are paid, the pension and severance funds are released with the required forms, and an employment confirmation letter is issued.
Employment risks in Israel and how Acumen International mitigates them
| Risk in Israel | How Acumen International mitigates it |
|---|---|
| A role outside computing passes nine months and the client becomes the employer by law | Classifies the role before the offer and agrees the term or the transfer date to the client’s entity in advance. |
| Supplied employees claim the same terms as the client’s own Israeli staff | Benchmarks pay and benefits against the client’s comparable Israeli employees, where it has them, before the contract is issued. |
| A reserve call-up removes an employee for weeks or months | Keeps salary running, recovers the National Insurance reimbursement and protects the position during and after service. |
| A dismissal without a fair hearing is compensated by the labour court | Issues written reasons and holds a documented hearing before any decision. |
| Severance falls due as a lump sum for the whole period of service | Contributes under Section 14 from the start of employment, so severance is funded as it accrues. |
| Fixed overtime pay is challenged and back pay is claimed | Records working time where the role requires it and sets any fixed payment against real hours. |
| An employee claims compensation for a service invention | Includes the statutory waiver and a full assignment in the contract. |
| An employee is dismissed during a protected period | Checks pregnancy, fertility treatment, maternity and reserve status before any termination and applies for a permit where one is available. |
| A foreign employee works without a valid permit, or after a role or salary change the permit does not cover | Starts employment only once the permit is issued and re-files with the Population and Immigration Authority whenever the role or salary moves from what was approved. |
Israel work visas for foreign experts
Israeli citizens and permanent residents, including new immigrants under the Law of Return, need no permit. Everyone else needs an employer-sponsored permit from the Population and Immigration Authority before starting work.
B/1 expert permit. The main route for professional hires. The role must call for genuine expertise, and the salary is generally expected to be at least twice the national average wage. The employer obtains the permit, after which the employee receives a B/1 work visa. The first visa is usually issued for a year and can be extended up to 63 months in most cases. The employer pays an annual permit fee of NIS 1,420 in 2026 and must provide private medical insurance for the length of the stay.
Faster tracks. High-tech roles have an expedited track, and a short-term track allows experts to work in Israel for up to 90 days a year on assignments such as installations or training.
What Acumen International contributes
- A qualifying Israeli sponsor, so a company with no Israeli entity can still bring in a foreign expert.
- An offer built to meet the salary threshold and the conditions the permit is approved on, so pay is not the reason an application fails.
- A permit kept valid through every renewal and every change in role or salary, so the expert’s right to work stays current for the whole assignment.
Family members
Spouses and children of B/1 experts usually receive B/2 status linked to the expert’s visa. B/2 status does not allow work, so a working spouse needs separate authorisation.
Cost of hiring in Israel
Employer contributions on top of gross salary, with National Insurance rates from 1 January 2026:
| Contribution | Employer share |
|---|---|
| National Insurance up to NIS 7,703 a month | 4.51% |
| National Insurance from NIS 7,703 to NIS 51,910 a month | 7.6% |
| Pension | 6.5% |
| Severance | 6% minimum, or 8.33% for full Section 14 coverage |
| Recuperation pay | NIS 418 a day, from 5 days a year after the first year |
| Travel to work | Commuting costs up to the daily cap in the extension order |
| Education fund | Contractual, usually 7.5%, with 2.5% from the employee |
On a salary of NIS 25,000 a month, the statutory contributions come to about 19% of gross pay with the minimum severance rate and 21.5% with full Section 14 coverage. An education fund adds 7.5%. The Global Payroll Calculator gives the full employer cost for any salary in Israel.
Hiring cases in Israel and how they are handled
| Case | How Acumen International handles it |
|---|---|
| A French company hires a country sales manager in Israel for an open-ended role. | Acumen International classifies the role as subject to the nine-month rule, employs the manager while the company sets up its Israeli entity, and transfers the employment with seniority and pension intact before the ninth month. The company has its sales lead working before the entity exists and takes over a compliant employment. |
| A German company needs a non-Israeli chip architect in its Israeli team. | Acumen International sponsors the B/1 permit, sets the salary above the expert threshold and arranges the required medical insurance. The architect works in Israel lawfully under a renewable permit. |
| A UK company decides to part with an underperforming salesperson in Tel Aviv. | Acumen International issues written reasons, holds a documented hearing, weighs the response, then gives notice and pays final entitlements. The employment ends without a procedural claim against it. |
| A company has paid an Israeli developer as a freelancer for two years. | Acumen International employs the developer on an Israeli contract with pension, Section 14 severance and an invention waiver, and assigns all work product to the company. The relationship is compliant from that point and the code is owned outright, while any exposure from the freelance period stays with the company. |
| A US company restructures while its Israeli employee is on maternity leave. | Acumen International keeps the employment unchanged during the leave and the protected period after it, then consults on any change once the law allows it. The restructuring proceeds without breaching the Employment of Women Law. |
Benefits and leave in Israel
Annual leave. At least 12 working days a year for a five-day week in the first years of service, rising with seniority. Professional contracts often offer more from the start.
Public holidays. Under the private-sector extension order, employees with three months’ service receive paid leave for nine holidays: two days of Rosh Hashanah, Yom Kippur, the first day of Sukkot, Simchat Torah, the first and seventh days of Passover, Shavuot and Independence Day. Employees may observe the holidays of their own religion instead.
Sick leave. One and a half days accrue per month, up to 90 days. The first day is unpaid, the second and third are paid at 50%, and full pay applies from the fourth day.
Maternity and parental leave. 26 weeks of leave, of which up to 15 weeks are paid by the National Insurance Institute as maternity allowance, subject to qualifying contributions. The employer keeps pension contributions going during the paid period. Fathers can take time around the birth and share the later weeks of paid leave.
Competitive packages. Professional benefit packages in Israel usually include an education fund, disability insurance on top of the pension and a meal allowance, and at senior level often a car or car allowance.
Sources
- Rates of insurance contributions for salaried workers
- Minimum wage
- Workers dismissal due to Women Employment Law
- Employment Law Guide: Israel
- Employment Law in Israel
- IDF Reservists’ Rights
- Workplace protections for reservists’ spouses in Israel
- Recuperation pay (dmei havra’a)
- Waiver of compensation for service inventions
- B/1 Israeli Expert Visa
- Revised income tax brackets boost March salary
FREQUENTLY ASKED QUESTIONS
Got questions?
We’ve got answers
Have questions about hiring globally? You’re not alone. Below you’ll find answers to the most common questions from teams expanding into new markets — from compliance and onboarding timelines to payroll and local benefits.
If you don’t see what you’re looking for, our team of in-country experts is always ready to help you navigate the details.
Can we offer benefits above the statutory minimum in Israel?
Yes. Statutory entitlements form the baseline, not the ceiling. Acumen can help add supplementary benefits that fit the role and the market in Israel, while keeping the package workable from a payroll, tax and administration perspective.
How does Acumen manage ongoing employment compliance in Israel?
Acumen operates the employment relationship under the requirements that apply in Israel and manages changes through local employment expertise rather than treating the country as a generic payroll location. The client remains responsible for business decisions, day-to-day management and obligations that attach to its own activities.
Can payroll in Israel be funded or settled in an international currency?
Employee salary payments in Israel must follow the currency and payroll rules that apply locally. Where foreign-currency payment is permitted and operationally workable, it can be considered; client funding and invoicing can also be arranged separately in an agreed currency where supported. Acumen confirms the workable structure before onboarding.