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
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%.
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.