Israel’s high-tech industry is a global powerhouse, driving innovation in sectors such as cybersecurity, fintech, artificial intelligence, software development, and biotech. For companies looking to Hire in Israel, understanding both the local labor laws and the dynamics of the high-tech market is essential. As your trusted Employer Of Record In Israel, we help you navigate this complex landscape with precision.

The Role of an Employer Of Record In Israel

Partnering with an EOR in Israel means you can quickly scale your high-tech workforce while leaving the intricacies of local compliance, payroll, and benefits administration to experts. This enables you to focus on innovation and strategic growth, ensuring that your company remains competitive in the ever-evolving tech environment.

Key Working Laws in Israel 2025: Numbers and Requirements

Israeli labor law is designed to balance employee protection with business flexibility. Here are the critical components, including precise figures and requirements:

1. Minimum Wage

• Mandatory Requirement:

  
  

  In 2025, the minimum wage for a full-time employee (approximately 182 hours per month) is NIS 5,800. In the high-tech industry—where specialized skills are in high demand—salaries often exceed this baseline significantly.

2. Tax Withholdings

• Mandatory Requirement:

  
  

  Employers must deduct income tax following Israel’s progressive tax system, with rates ranging from 10% to 50%. For high-tech roles, where compensation is generally above average, many professionals fall within the 30% to 45% bracket after applicable deductions.

3. Social Security and National Insurance (Bituach Leumi)

• Mandatory Requirement:

  
  

  Registration with Bituach Leumi is compulsory, covering:

  • Pension Contributions: Total contributions average between 18-20% of an employee’s salary, with roughly 12.5% contributed by the employer and 6.5% by the employee.

  • Health Insurance: Employers contribute approximately 3-4% of the monthly salary, ensuring employees have access to the essential services provided by recognized health funds (Kupat Holim).

4. Paid Leave and Overtime

• Mandatory Requirement:

  
  

  Employees are entitled to paid sick leave and annual vacation. Additionally, overtime must be compensated at rates defined by law—an important consideration in fast-paced, innovation-driven environments.

The High-Tech Industry Landscape in Israel

Israel’s high-tech scene is concentrated in several key sectors, each offering unique opportunities and competitive salary packages:

Cybersecurity

• Overview:

  
  

  Known as a global leader in cybersecurity, Israel’s tech ecosystem attracts top talent to protect critical infrastructures.

• Key Positions:

  
  

  Cybersecurity analysts, penetration testers, and security architects.

• Average Salary Rates:

  
  

  Mid to senior-level cybersecurity professionals typically earn between NIS 300,000 and NIS 450,000 annually, with leading firms offering performance bonuses and stock options.

Fintech and Artificial Intelligence

• Overview:

  
  

  Fintech and AI are rapidly growing sectors that blend financial services with cutting-edge technology. These areas demand a mix of analytical and technical skills.

• Key Positions:

  
  

  Data scientists, AI/ML engineers, and product managers.

• Average Salary Rates:

  
  

  Data scientists and AI engineers in the fintech space can expect salaries in the range of NIS 350,000 to NIS 500,000 per year, with senior roles often exceeding these figures.

Software Development and Biotech

• Overview:

  
  

  Software development remains a cornerstone of Israel’s tech industry, while biotech and medtech continue to expand with substantial government and venture capital support.

• Key Positions:

  
  

  Software engineers, R&D engineers, and project managers.

• Average Salary Rates:

  
  

  Software engineers typically earn between NIS 320,000 and NIS 480,000 per year. In biotech, R&D roles can command similar or higher salaries, reflecting the specialized knowledge required.

The Value of Enhanced Benefits: Spotlight on Keren Hishtalmut

A significant advantage for both employers and employees in Israel is the Keren Hishtalmut benefit—a training and professional development fund that has become a hallmark of competitive compensation in the high-tech sector.

• Tax-Advantaged Savings:

  
  

  Contributions to Keren Hishtalmut are capped at about 7.5% of an employee's monthly salary, with some leading firms contributing up to 10%. These funds are accumulated over six years and can be withdrawn tax-free for educational or career development purposes.

• Skill Enhancement:

  
  

  In an industry where continuous learning is vital, Keren Hishtalmut helps employees pursue advanced courses, certifications, or specialized training, thereby boosting both individual career trajectories and overall company innovation.

• Competitive Edge:

  
  

  Offering a robust Keren Hishtalmut package not only attracts top-tier talent but also improves employee retention—a critical factor in the competitive high-tech market.

Why Choose EOR Israel for High-Tech Hiring?

Navigating the intricacies of Israeli labor law and the competitive high-tech industry demands expert guidance. With EOR Israel on your side, you gain:

• Guaranteed Compliance:

  
  

  Our team stays ahead of regulatory changes, ensuring that all aspects—from minimum wage adjustments to tax withholdings and benefit contributions—are managed flawlessly.

• Tailored Benefits Packages:

  
  

  We help design compensation packages that include both mandatory benefits and attractive extras like enhanced Keren Hishtalmut, aligning with industry standards and exceeding employee expectations.

• Operational Efficiency:

  
  

  By managing administrative complexities, we free you to focus on strategic initiatives and innovation within your high-tech enterprise.

Conclusion

For companies aiming to Hire in Israel’s dynamic high-tech industry, understanding the legal framework and industry specifics is key to success. With a minimum wage of NIS 5,800, structured tax withholdings, mandatory pension and health contributions, and the strategic advantage of benefits like Keren Hishtalmut, the landscape is designed to foster growth and innovation.

By partnering with EOR Israel, you ensure full compliance with working laws while offering competitive, industry-tailored packages that attract and retain top talent. Contact us today to learn how we can help you build a compliant, competitive, and forward-thinking workforce in Israel’s thriving high-tech market.