Israeli Job Offer Checklist for Olim: What Sits Above the Bruto

The Number on the Offer Letter Is Just the Beginning

When you receive a job offer in Israel, you will see a single number: the ברוטו (Bruto) (gross salary). But unlike in many countries, the gap between Bruto and נטו (Neto) (net / take-home) is enormous, often 35-45% for a typical salary. More importantly, the Bruto alone does not tell you the full value of the compensation package, because employer-side contributions like Keren Hishtalmut, pension and severance savings add roughly a quarter on top.

What does your employer actually pay above your salary?

For every shekel of Bruto you receive, your employer pays significantly more. Here is a breakdown for a salary of 20,000 NIS/month:

Note how the national insurance line is built, because this is where quick estimates go wrong. The employer rate is not a single percentage: it is 4.51% on the part of the salary up to NIS 7,703 and 7.6% on the part above it, up to a ceiling of NIS 51,910. On a NIS 20,000 salary that comes to roughly NIS 1,282, not the roughly NIS 900 a flat 4.51% would suggest. The total employer cost lands around 127% to 129% of your Bruto depending on whether the severance component is at the 6% base rate or the full 8.33%. When an employer discusses budget for a position, they are thinking in terms of this total cost, not just your salary.

Keren Hishtalmut: The Benefit You Cannot Afford to Skip

קרן השתלמות (Keren Hishtalmut) is an employer-funded savings plan that is unique to Israel. The standard arrangement is 7.5% from the employer and 2.5% from the employee. There is a tax ceiling on it: for tax year 2025 the maximum monthly salary on which the employer contribution is exempt from tax is NIS 15,712 a month, or NIS 188,544 for a full year, and contributions above that are treated as employment income in your hands. After 6 years, you can withdraw the balance.

Why it matters so much: On a salary of 20,000 NIS, the employer puts in 1,500 NIS/month. Over 6 years, that is 108,000 NIS in employer contributions alone, plus your own 36,000 NIS and investment returns. The entire amount is tax-free upon withdrawal. No other savings vehicle in Israel offers this combination of employer matching and tax exemption.

Negotiation tip: If an employer offers Bruto without Keren Hishtalmut, you should treat it as a 7.5% pay cut compared to an offer that includes it. Some employers, especially smaller ones, may try to skip it. Always ask and negotiate.

Pension: Quality Matters, Not Just the Check Box

קרן פנסיה (Keren Pensia) (pension fund) contributions have been mandatory for all employees in Israel since 2008, under the pension expansion order issued by the Minister of Labour. The order also sets the floor: where a preferential arrangement applies, the total contribution rate has been at least 18.5% of salary since 1 January 2017, and in every case the employer must contribute to the severance component at no less than the rate in the order. But which fund your money goes into makes a real difference. Key factors to evaluate:

• Management fees (Dmei Nihul): These compound over decades. A difference of 0.5% in annual management fees on a 1 million NIS balance costs you 5,000 NIS/year. Negotiate fees directly with the pension company. New olim can often get preferential rates.
• Investment track: Pension funds offer multiple investment tracks (from conservative to aggressive). For younger olim, a more equity-heavy track typically produces better long-term returns.
• Insurance components: Israeli pension funds include disability and survivors insurance. Check the coverage levels and costs, as these deduct from your savings.

What benefits come on top of your salary in Israel?

Israeli compensation packages often include non-salary benefits worth evaluating:

• Company car (Rechev Tzamud): Common in tech and sales roles. The car is a taxable benefit (roughly 2,800-5,500 NIS/month added to your taxable income depending on the car), but the actual cost to you is lower than buying and maintaining a car yourself.
• Cell phone: Many employers provide a phone line. This is a taxable benefit but typically worth 100-200 NIS/month.
• Meal allowance / Cibus card: Some employers provide daily meal credits (typically 30-60 NIS/day) via cards like Cibus, Shufersal, or 10Bis. These are partially tax-exempt.
• דמי הבראה (Dmei Havra'ah) (recreation pay): A statutory annual payment, currently 418 NIS per day of entitlement. A new employee gets 5 days in the first year, increasing over time. This amounts to 2,090 NIS/year minimum, usually paid as a lump sum in July.

How much vacation and leave are you entitled to?

Israeli labor law sets minimum entitlements:

Important note: Sick days in Israel work differently than in most countries. You get no pay for the first day, 50% for days 2-3, and full pay from day 4 onward. Unused sick days accumulate without limit.

How does overtime pay work in Israel?

The Hours of Work and Rest Law sets a maximum of 45 hours a week, but an expansion order published on 19 March 2018 shortened the standard week to 42 hours from 1 April 2018. A normal working day is capped at 8 hours where the week runs 6 days and 9 hours where it runs 5 days. Overtime that the employer approved is paid at no less than 125% of the regular wage for the first two extra hours in a day and no less than 150% for each hour after that; overtime worked without the employer's approval carries no entitlement. However, many employers (especially in tech) use a "global overtime" agreement (Shaot Nosafot Globaliyot), where a fixed monthly amount covers all overtime. If you regularly work long hours, check whether this agreement is genuinely beneficial or if you would earn more with hourly overtime pay.

How do you benchmark a salary against the market?

Israeli salary data is less transparent than in the US or UK, but you have several tools:

• GlassCeiling (Tamat HaZchuchit): Israel's largest salary survey, published annually. It shows median salaries by role, industry, and experience level.
• Glassdoor and LinkedIn: Less data for Israeli companies than for US companies, but still useful for multinational employers.
• Tech-specific: For tech roles, the annual compensation survey from the Israel Innovation Authority and reports from placement firms like Ethosia or GotFriends provide useful benchmarks.
• Ask the community: Olim Facebook groups (Secret Tel Aviv, Anglo Israel Jobs) often have informal salary discussions.

Your Job Offer Evaluation Checklist

Before accepting any offer, verify these items in writing:

• Gross salary (Bruto) and when raises are reviewed
• Keren Hishtalmut: employer percentage and which fund
• Pension: employer percentage, severance savings, and which fund
• Car benefit or travel reimbursement
• Meal allowance (Cibus/10Bis)
• Vacation days (above minimum 12)
• Notice period and probation terms
• Global overtime: amount and whether it genuinely covers your expected hours
• Stock options: Section 102 trust, vesting schedule, and exercise price
• Remote work policy

Ask for a full breakdown of employer cost. Any reputable employer will provide this. If they are reluctant, that is a red flag.

An Israeli job offer states only the Bruto (gross salary), but the real value of the package is higher because of employer-side contributions that do not appear on the headline number. For a NIS 20,000 a month salary, a typical employer also pays 6.5% to your pension fund, a severance component of 6% at the statutory base rate or the full 8.33% under a Section 14 arrangement, 7.5% to your Keren Hishtalmut, and employer national insurance of 4.51% on the salary up to NIS 7,703 and 7.6% above it, which is about NIS 1,282 rather than the roughly NIS 900 a flat rate would suggest. That puts total employer cost around 127% to 129% of your Bruto, and the pension, severance and Keren Hishtalmut portions are savings that belong to you. When you compare two offers, compare the total package, including which pension and Keren Hishtalmut funds are used and their management fees, not just the gross salary.