Global Payroll Services in Israel

Already have an Israeli entity, or running payroll across several countries? We place you with a vetted Israeli payroll partner who keeps Bituach Leumi, income tax, and the mandatory pension and severance fund exactly right, while you stay the legal employer and we stay on your side.

  • Independent advice
  • Vetted partners
  • Multi-country ready

What running payroll in Israel involves

If you already employ people through your own Israeli entity, you stay the legal employer, but you still have to run payroll correctly every month: income tax and Bituach Leumi withheld under the PAYE-style nikui mas bamakor system, plus the mandatory occupational pension and severance-fund (pitzuim) contributions, several moving parts rather than one flat deduction. This is where a specialist payroll partner earns its place: you keep the employment relationship, they keep the mechanics right across all of it.

01

You stay the employer

You stay the legal employer of your Israeli staff. The payroll partner runs the monthly mechanics; you keep the employment relationship.

02

Accurate every cycle

Income tax, Bituach Leumi, and the mandatory pension and severance-fund contributions calculated and withheld correctly, payslips issued, and statutory filings made to the Israel Tax Authority and the National Insurance Institute on schedule, every month.

03

Multi-country consolidation

Run payroll across several markets under one partner and one process, rather than a different vendor and standard in every country.

How managed Israeli payroll works, step by step

From onboarding your employee data to filing and reconciliation.

01 – Scope & onboard

We map your entity, headcount, and where you employ people, place you with the right vetted Israeli payroll partner, and onboard your employee data.

02 – Set up calculations

Income tax, Bituach Leumi, the mandatory pension and severance fund, and any statutory benefits configured correctly to current Israeli rules, so every payslip is right from the first run.

03 – Run monthly payroll

Salaries calculated, income tax and Bituach Leumi withheld, pension and severance-fund contributions made, payslips issued, and people paid on schedule, every cycle.

04 – File & reconcile

Statutory filings to the Israel Tax Authority and the National Insurance Institute made on time, with annual reconciliation (Form 126) handled for you.

What payroll in Israel costs

Your statutory employer costs, plus a payroll partner fee. Israel’s employer burden is bracketed rather than flat; the value of the partner is accuracy and time, in a system where a wrong bracket calculation is visible and penalised.

Employer Bituach Leumi & pension

National Insurance runs 4.51% up to the NIS 7,703/month reduced-rate threshold and 7.6% above it, with a separate mandatory 6.5% pension and 6-8.33% severance-fund contribution configured correctly every payroll run.

Minimum wage (2026)

NIS 6,443.85 per month from 1 April 2026, one national rate with no regional variation to track.

Income tax (employee)

A seven-bracket progressive scale from 10% to 47%, plus a 3% surtax above NIS 721,560/year, calculated and filed correctly on every payslip.

Payroll partner fee

A transparent per-employee or per-payslip fee. We benchmark across our vetted network, typically 15 to 25% below going direct.

Why run it through Bradford Jacobs

One partner, many countries

If you run payroll across several markets, we consolidate it through vetted partners under one point of contact, not a different vendor and a different standard in every country.

  • Independent advice
  • Vetted partners only
  • On your side at renewal

Pricing you can’t get direct

Israel runs a two-tier Bituach Leumi bracket plus a separate mandatory pension and severance fund, and getting the split wrong on a payslip is an easy, visible mistake. We benchmark across our payroll network for rates typically 15 to 25% below going direct, and renegotiate for you at renewal.

  • 15-25% below direct
  • Network benchmarking
  • Renegotiated for you

Bracket rules that expose risk

The Bituach Leumi reduced-rate/full-rate split, the mandatory pension and severance-fund contribution, and the annual reconciliation deadline. We place you with partners who get the specifics right, and we stay on your side if anything needs escalating.

  • Direct escalation
  • No support queues
  • Named account contact

20+ years and the local detail

Two decades running compliant payroll across global markets, the deadlines, the filings, the year-end detail that exposes risk.

  • Two decades of payroll
  • Deadlines & filings
  • Year-end handled

Built to scale across markets

Run payroll in one country or twenty through one partner and one process. As you add markets, the standard does not fragment, you keep a single point of contact and consistent compliance everywhere.

  • One process everywhere
  • Single point of contact
  • Consistent compliance

The payroll slips the National Insurance Institute never misses

These are the ones that catch foreign employers, and the reason a specialist partner pays for itself.

Tax & deduction rates

Misapplying the Bituach Leumi reduced-rate/full-rate split. Getting the mandatory pension-versus-severance-fund contribution wrong. Missing a statutory benefit or leave entitlement. Each is easy to get wrong alone and visible to the Israel Tax Authority and the National Insurance Institute when you do.

Filings, deadlines & reporting

Late remittance of Form 102 monthly withholding or the Form 126 annual reconciliation, where penalties and interest apply automatically. None of these are hard for a specialist; all are easy to get wrong alone. That is the whole case for getting your Israeli payroll partner right.

What managed payroll covers

One transparent fee covers the full monthly payroll cycle. No hidden extras.

Tax, Bituach Leumi & pension

Compliant Israeli payroll processed monthly, with income tax, Bituach Leumi, and the mandatory pension and severance fund correct every run.

Payroll & filings

Monthly payroll run, with income tax and Bituach Leumi calculated, withheld, and filed correctly each month.

Statutory benefits

All statutory benefits administered: annual leave, sick pay, parental leave, notice and a lawful pre-dismissal hearing.

Compliance & support

Ongoing HR compliance and a single point of contact, for the life of the engagement.

Your questions answered

Straight answers on running compliant payroll in Israel.

Do I need an Israeli entity to use payroll services?

Yes. Payroll outsourcing assumes you are the legal employer, which usually means you have an Israeli entity. If you have no entity and do not want one yet, you need an EOR instead, where the partner is the legal employer. We will confirm which applies to you.

Income tax calculation and remittance, employer and employee Bituach Leumi, the mandatory pension and severance-fund contributions, statutory benefits and leave, payslips, and all statutory filings to the Israel Tax Authority and the National Insurance Institute. You keep the employment relationship; they keep it compliant and on time.

The government widened two middle income-tax brackets effective 1 January 2026: the 20% bracket now runs to NIS 19,000/month (up from NIS 16,150), and the 31% bracket now runs from NIS 19,001 to NIS 25,100/month (up from a prior NIS 22,440 ceiling). Bituach Leumi’s own reduced-rate threshold and ceiling also stepped up on 1 January 2026, as they do every year. A good payroll partner has these built in from day one, so nothing is under- or over-withheld during the changeover.

Bracketed, not flat: employer Bituach Leumi runs 4.51% up to NIS 7,703/month and 7.6% above it, plus a separate mandatory 6.5% pension and 6-8.33% severance-fund contribution. Add the transparent payroll partner fee and you have your all-in cost.

Yes, and it is one of the main reasons companies come to us. One point of contact and a consistent process across markets, rather than a separate provider and a different standard in every country.

Yes. When you incorporate and become the legal employer, we move your people from the EOR arrangement onto your own compliant Israeli payroll, and manage the handover so nothing is missed.

Need compliant payroll in Israel?

Tell us your entity setup and headcount and we will come back with the right partner and pricing you will not get direct, usually within a day. One process, every country you operate in.

Tax and labour data verified July 2026 (Bituach Leumi / National Insurance Institute, Israel Tax Authority, PwC). Figures change; we confirm the current position when we scope your payroll.