Israel has a population of more than 8.6 million people with top industries including industrial and manufacturing sectors, offering many companies  opportunities to expand. There are some considerations before starting a business in Israel, including company formation and registration, depending on the industry.

Labor and Payroll Considerations:

  • The standard work week is 43 hours per week, with a minimum of 36 hours rest per week
  • Employment contracts must be written
  • The minimum wage is 5,300 NIS per month
  • Collective Bargaining Agreements are created at the sector level
  • Income tax and insurance contributions are withheld from employee pay
  • Employers must provide form 106 to employees, detailing annual tax and wage information
  • There are 9 national holidays each year that follow the Jewish calendar, so the specific dates change each year based on the calendar
  • Foreign workers must obtain a work permit and work visa in order to begin employment, with the employer sponsoring the application process

Funding options for payroll are complicated in Israel. To simplify paying your employees, the ideal scenario is to open a local bank account for payroll and VAT purposes. Blue Marble provides money movement services so you can fund payroll in USD and we settle in the local currency, but you must have an escrow account with the in-country provider in order to use money movement services.

Year end reporting is required and must be submitted to tax authorities between March and May each year. Audits are also mandatory for companies with a permanent establishment in Israel.

If you are expanding your business in Israel or need to simplify operations, Blue Marble can help. Our global consulting services can set up business entities, create custom employment agreements, identify statutory benefits and more. We have a cloud-based payroll platform with customized reporting so you have real-time access to your payroll in Israel and across 150+ countries and currencies. Our unique, hybrid service model provides you with a dedicated US service team and direct access to in-country experts when questions come up.

Ensure compliance for your payroll and operations with Blue Marble. To learn more about simplifying payroll in Israel, click here