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Israel Payroll Outsourcing

We can establish and run your Israel payroll, even if you haven't registered an Israeli entity

Establishing and maintaining an Israel payroll

Israel is a fascinating country, with a rich history ranging back thousands of years, a diverse culture, and a highly developed economy. For these reasons and more, it is a great place to do business and many foreign organizations look to build and expand in the country.

One important element of this kind of foreign expansion is hiring locally, and this means setting up an Israel payroll. Establishing Israel payroll involves navigating a complex set of unique and frequently changing employment laws, which can be a lengthy and difficult process.

At New Horizons, we specialize in providing Israel payroll outsourcing support services, offering organizations a way to outsource the time-consuming process of setting up a payroll. We offer flexible service packages, whether or not your organization already has an Israeli entity.

If you have an entity

If you have already established a legal entity for your business in Israel, we can provide our system for Israel payroll outsourcing to help you build and manage your local payroll. In addition, we can manage all of you HR, contracts, and legal compliance work to ensure you are fully equipped to hire locally as rapidly as possible

This level of outsourcing is a good choice for any company that already has an entity in Israel and could benefit from support from Israel experts.

If you don’t have an entity

If your business has not registered an official entity in the country, then you have the option of hiring through our Israeli subsidiary. We can act as employer of record in the country, set up and manage your Israel payroll, and handle associated HR, administration, and compliance.

This solution provides a low-risk, scalable, and flexible route into the Israeli marketplace so you can access all of the benefits of employing locally without any of the hassle.

Build your business in Israel with help from New Horizons

Reliable Delivery

We guarantee that all payments will be on time, your data will be secure, and you can be up and running within just 48 hours.

An Established Presence

Our in-country subsidiary will act as employer of record, offering you a presence in Israel for legal local employment.

Flexible Solutions

Our team will manage all of the admin, payroll, HR, and taxes, so you can focus on building your business in Israel.

Up-To-Date Compliance

We’ll ensure you stay fully compliant at all times with Israel’s complex business and employment legislation.

A Single Point of Contact

Our centralized service gives you a single point of contact, simplifying the entire Israel employment process.

Proven Global Expertise

Our in-house teams of payroll and HR experts have already helped all kinds of organizations expand globally.

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Israel payroll guide

What withholdings and taxes are required in Israel?

Both workers and employers in Israel must contribute toward national insurance and health insurance schemes. The contributions are 12% of salary for employees and 6.75% for employers.

Income tax is progressive in Israel, with rates ranging from 10% to 50% depending on income level.

As of 2020, the corporate tax rate in Israel is 23%. 

Severance Pay
8.33%
Social Security and Health Insurance
10.95%
Pension Fund
6.50%
Disability Insurance
2.50%
Total Employment Cost
28.28%
Social Security and Health Insurance
15.50%
Pension Fund
6.00%
Total Employee Cost
21.50%
Up to 6,220 NIS
10.00%
6,220 – 8,920 NIS
14.00%
8,920 – 14,320 NIS
20.00%
14,320 – 19,990 NIS
31.00%
19,990 – 41,410 NIS
35.00%
41,410 – 53,333 NIS
47.00%
Over 53,333 NIS
50.00%

Entitlements and terminations

Employees in Israel who are dismissed without proper cause are usually entitled to severance pay.

For terminations, notice must be provided as a legal requirement. In the first six months of employment, only one day of notice is required. For at least six months of employment, six days plus two and a half days for every month after the sixth month is required. After one year of employment, 30 days of notice is required.

Employees can usually offer severance payment in lieu of notice if they choose.

How to establish Israel payroll outsourcing

An important part of the hiring and payroll process for many foreign organizations is setting up an Israeli entity to act as employer of record. This process can be lengthy and expensive, often taking weeks or even months to complete.

You can avoid the unnecessary hassle by outsourcing to the experienced New Horizons Israel payroll outsourcing  experts. Our team will handle everything for you, ensuring you are set up in days, not months. You can also choose to hire using our Israel subsidiary as your employer of record, helping you can focus on expanding your operations whether or not you already have a registered entity in Israel.

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Find out more about out Israel payroll outsourcing