Salary Calculator
Israel

A salary calculator for Israel estimates gross and net earnings by considering different factors. It starts with the gross salary, including base pay, bonuses, and extra compensation. Then, it applies the tax rate.

It also factors in social security contributions from both the employee and employer, which help fund pensions and healthcare. After deducting all taxes and contributions, the net salary is the actual take-home pay.

Both the employer and the employee must make contributions towards pension insurance. The minimum pension fund contributions are 18.5% of gross salary. The employer generally pays 6.5% towards pension funding and 6% towards severance funding, while the employee pays 6% towards pension. 

Employers must also deposit an additional 8.33% of the employee's monthly salary into a severance fund. Plus, they’re obligated to contribute 7.5% of the base salary to the training fund, whereas the employee contributes 2.5%. 

On the other hand, only employees make contributions to health insurance — 3.10% on the first 7,522 ILS and 5.00% on income between 7,522 ILS and 49,030 ILS.

The tax rates on income in Israel are as follows:

-0 - 84,120 ILS → 10%

-84,120 - 120,720 ILS → 14%

-120,720 - 193,800 ILS → 20%

-193,800 - 269,280 ILS → 31%

-269,280 - 560,280 ILS → 35%

-560,280 - 721,560 ILS → 47%

-721,560 and over ILS → 50%

*The tax rates mentioned were accurate at the time of writing.

Employees are entitled to paid annual vacation leave, with a minimum number of days depending on their length of service. For employees working a 5-day week, the minimum annual leave is 12 working days during the first 5 years of service. This can increase to 28 days after a certain period. 

Female employees are entitled to statutory maternity leave, also known as birth and parenting leave (BPL). If an employee has worked for the same employer for at least 12 months, they are entitled to 26 weeks of BPL. Otherwise, the leave is set at 15 weeks. The National Insurance Institute (NII) makes payments for 15 weeks of BPL, while the other 11 weeks of BPL are unpaid. Moreover, fathers receive 8 days of paid paternity leave following the birth of a child.

Employees are entitled to 1.5 days of sick leave for each month of employment, accumulating up to a maximum of 90 days. Another mandatory benefit is the transportation allowance, meaning that employers must reimburse employees for transportation costs up to a specified amount per day, based on the distance from home to work.

In Israel, many employers offer additional perks beyond the mandatory employee benefits to attract and retain talent. Supplemental health insurance is a common offering, providing broader coverage for medical needs not included in the basic national health basket, such as dental, vision, transplants, and long-term care. Wellness programs are also popular, with companies providing on-site gyms, yoga classes, or subsidies for gym memberships to promote employee health and well-being.

Transportation allowances are often provided to cover employee commute costs, and meal subsidies or cafeteria discounts can make daily life a little easier. Discounts on the company's products or services, or those of partner businesses, are also a common perk. A company car may be provided for work-related or personal use in certain roles.

Gross salary in Israel is the total amount before any deductions are made. This is the figure typically stated in employment contracts and used in job negotiations. It includes your base salary plus any additional payments like overtime, bonuses, transportation allowance, and other benefits.

Net salary is what you actually receive in your bank account after all mandatory deductions have been taken out. In Israel, these deductions typically include: income tax, national insurance, health insurance, pension contributions, and training fund.