Israel packs startups and multinational R&D centers into Tel Aviv, Haifa, and Herzliya, making it one of the densest technology markets anywhere. The country had 10.244 million residents on the eve of Independence Day 2026, per the Central Bureau of Statistics.
Employers buying payroll services in Israel meet a detailed system: social insurance in 2 bands, mandatory pension, and monthly Form 102 reporting. For 2026, the average wage is NIS 7,703, per the National Insurance Institute’s rates page. Payslips must also follow strict legal content rules.
Why Businesses Choose Payroll Services in Israel
Salaries are paid monthly in new Israeli shekels (NIS). National Insurance (Bituach Leumi) works in 2 bands. On pay up to NIS 7,703 a month, the employer adds 4.51%, and the employee pays 4.27%, including health insurance. Above that, up to a NIS 51,910 ceiling, the rates rise to 7.6% and 12.17%, per the National Insurance Institute. Health insurance is deducted only from the employee. The minimum wage is NIS 6,443.85 a month since April 1, 2026, which payroll services for Israeli employers must meet first.
INSIGHT: What does an Israeli employee cost on top of salary?
The employer’s statutory cost stacks National Insurance, mandatory pension and severance funding, and the National Insurance rate climbs with salary until the ceiling.
- Employer National Insurance: 4.51% up to NIS 7,703 a month and 7.6% above it (National Insurance Institute, January 2026).
- Contribution ceiling: NIS 51,910 a month, updated each January.
- Employer pension at least 6.5% plus severance funding of 6%, or 8.33% under Section 14.
- NIS 6,443.85 is the monthly minimum wage in force since April 1, 2026.
Sources:
as of September 2026
Pension is where mistakes cost the most. Under the extension order on comprehensive pension insurance, the employer pays at least 6.5% for pension plus a severance component, and the employee pays 6%. With a Section 14 arrangement, monthly deposits of 8.33% replace statutory severance for those wages. Without one, or with a gap, severance can surface as a liability years later. Many technology employers also fund a study fund (keren hishtalmut), which is customary rather than statutory. Recuperation pay (dmei havra’a) after the first year and travel reimbursement complete the picture.
Income tax runs at progressive rates up to 47%, plus a 3% surtax on annual income above NIS 721,560, per PwC. The employer withholds it monthly and applies each employee’s tax credit points (nekudot zikui) from the Form 101 they sign. Tax and National Insurance are reported and paid on Form 102, generally by the 15th of the following month. After year-end, payroll files the annual Form 126 and a Form 106 for every employee. Payslips must also meet the Wage Protection Law’s content rules
INSIGHT: Which filings does payroll in Israel involve each year?
Israeli payroll combines monthly reporting with an annual reconciliation cycle, each tied to specific forms.
- Form 101: collected from each employee to set credit points and deductions.
- Form 102: monthly report and payment, generally by the 15th of the following month.
- Form 126: annual employer return to the Israel Tax Authority.
- Form 106: annual statement given to each employee after year-end.
Payroll outsourcing is the lighter model. Your Israeli company (Ltd.) remains the employer, and the provider handles only the calculations, pension deposits, Form 102, and payslips.
An Israeli PEO or EOR is different because the provider employs the person for you. When that amounts to manpower supply, the Employment of Employees by Manpower Contractors Law applies. The contractor needs a Ministry of Labor license, and after 9 consecutive months with the same client, the worker is treated as the client’s employee. Ministerial approval can stretch this to 15 months in total, per the OECD.
Computer service positions are excluded from the 9-month requirement, per the Taub Center. So whenever a vendor sells a PEO in Israel, ask how it structures long placements. Readers after the legal-employer route alone will find it covered in my employer of record Israel guide.
The 12 providers below all run payroll or employ staff in Israel: 8 local firms and 4 global platforms with confirmed Israeli coverage. Every profile gives the pricing model, strengths, and best fit. Teams building across the region often pair Israel with the Gulf, and my PEO UAE guide covers that.
Top 12 Payroll Companies and PEO Providers in Israel
The best payroll services in Israel for you depend on 3 questions.
Do you already have an Israeli company? Then payroll outsourcing is enough. If not, you need a PEO or EOR that employs the person for you.
Is Israel your only market? If so, a local specialist who deals with Bituach Leumi and pension funds every day is hard to beat. If not, one global contract may matter more.
Will the role last longer than 9 months, and is it computer-related? The answer shapes how a provider should structure the employment.
Among payroll companies in Israel, I looked for correct 2-band National Insurance, pension and severance deposits including Section 14, and tax with credit points.
I also checked for on-time Form 102 filings, year-end Forms 126 and 106, compliant payslips, a clear structure for long placements, and transparent per-employee pricing.
All twelve providers appear in A-to-Z order. The sequence says nothing about quality, preference, or ranking.
Ben Shmuel (BSCPA)
Provider Type:
Israel-based CPA and payroll firm
Company Description:
Ben Shmuel is a Tel Aviv CPA group active since 1993 and a member of the DAXIN GLOBAL network. Its financial services arm runs outsourced payroll for Israeli companies with 15 or more employees.
Key Specialty Area:
Payroll bureau inside a full CPA practice
Service Cost:
Quote-based; packages are built per business.
Top Advantages:
- Payroll, HR data, and attendance in one package
- Option of a payroll accountant working on your premises
- Tax and valuation expertise within the same group
Scope of Services:
- Outsourced payroll and payslip production
- Accounting, tax and financial consulting
- Payroll audits by a certified payroll examiner
Our Verdict
My pick for an established Israeli company that wants payroll run inside a long-standing CPA relationship.
CityBook Services
Provider Type:
Israel-based outsourcing and PEO provider
Company Description:
CityBook Services employs 800+ native English speakers across 7 locations in Israel. For overseas companies, it acts as a PEO Israel employer of record for their Israel-based staff, alongside back-office outsourcing.
Key Specialty Area:
PEO for overseas firms with English-speaking staff
Service Cost:
Quote-based; one monthly invoice covers all supported employees.
Top Advantages:
- HR and payroll team raised in the US, Europe and Canada
- Group rates on pension, health and life coverage
- No long-term obligation, the company says
Scope of Services:
- Employment of Israel-based staff for overseas companies
- Payroll, benefits and tax compliance
- Back-office outsourcing and office seats
Our Verdict
A good fit for North American companies that want an English-first team behind their Israeli hires.
CWS Israel
Provider Type:
Israel-based EOR and payroll provider
Company Description:
CWS Israel was founded in 2014 and is based in Rishon LeZion. It employs staff in Israel for foreign clients, works as an in-country partner for other EOR firms, and offers a Freelancer Shield model for independents.
Key Specialty Area:
Local EOR with a freelancer compliance model
Service Cost:
From $599 per employee per month, with volume discounts from 5 employees; an executive tier costs 9.5% of total employer cost.
Top Advantages:
- Support in Hebrew, English, Arabic, and Russian
- 24-hour human response guarantee, by its account
- Freelancer Shield issues payslips without a business file
Scope of Services:
- Employer of Record employment in Israel
- Agent of Record for contractors
- Payroll, benefits and local HR support
Our Verdict
My pick for foreign companies that want a dedicated Israeli team and a published price.
G-P (Globalization Partners)
Provider Type:
Global EOR platform
Company Description:
G-P runs a global employment platform. It says it hires through its existing Israeli subsidiary, so customers can run payroll without their own company.
Key Specialty Area:
Employment through an existing Israeli subsidiary
Service Cost:
Flat platform fee from $599 per employee per month.
Top Advantages:
- Existing Israeli subsidiary, the company says
- Flat fee instead of a percentage of payroll
- Country guides for payroll, benefits and visas
Scope of Services:
- Employer of Record employment and payroll
- Tax and National Insurance withholding
- Visa and work permit support
Our Verdict
A safe option for larger companies hiring in Israel and several other countries at once.
Going Global
Provider Type:
Israel-based expansion hub
Company Description:
Israel Going Global calls itself the national hub for Israeli companies scaling abroad. It connects founders with vetted advisors for EOR, global payroll, and PEO, at no cost to the company.
Key Specialty Area:
Matching Israeli companies with expansion experts
Service Cost:
No fee for companies, according to its site.
Top Advantages:
- Free, curated matching with global service providers
- Covers EOR, payroll, tax, and labor law questions
- Support for entity formation and relocation abroad
Scope of Services:
- Expert matching for EOR and global payroll
- International entity formation guidance
- Tax, labor law and go-to-market advice
Our Verdict
Useful for Israeli startups planning hires abroad rather than for foreign firms running Israeli payroll.
Human Impact
Provider Type:
Israel-based EOR, PEO and HR provider
Company Description:
Human Impact is an Israel-based EOR and PEO agency affiliated with Cornerstone International Group, active in Israel, the Middle East, and 70 countries. It serves firms with and without an Israeli entity.
Key Specialty Area:
EOR and PEO backed by executive search
Service Cost:
Quote-based, by model and headcount.
Top Advantages:
- Onboarding within 5 to 7 business days, it says
- Dedicated EOR route for new immigrants (olim)
- Recruitment and executive search from the same team
Scope of Services:
- EOR and PEO employment in Israel
- Recruitment and executive search
- HR consulting and outsourcing
Our Verdict
My choice when you still need to find the right person and want the same firm to handle employment.
Lazar & Co
Provider Type:
Israel-based CPA firm
Company Description:
Lazar & Co is a Tel Aviv CPA firm and member of the 3E Accounting network. It offers bookkeeping and payroll, tax representation for international companies, and EOR services.
Key Specialty Area:
Payroll with tax representation for foreign firms
Service Cost:
Quote-based, depending on scope.
Top Advantages:
- Represents international companies before Israeli tax authorities
- VAT representative services for foreign businesses
- Company formation with the Registrar of Companies
Scope of Services:
- Bookkeeping and payroll
- Annual reports and tax returns
- EOR and business advisory
Our Verdict
A practical choice for foreign companies that need payroll and Israeli tax representation from one office.
PEO Middle East
Provider Type:
Dubai-based regional PEO and EOR provider
Company Description:
PEO Middle East is based on Sheik Zayed Road in Dubai and covers Israel among a dozen Middle East markets. It offers PEO, EOR, and payroll outsourcing, acting as the client’s partner in Israel.
Key Specialty Area:
One regional contract across the Middle East
Service Cost:
Quote-based; offers are customized per client.
Top Advantages:
- Israel alongside Gulf and Levant markets
- Recruitment and relocation support
- Around-the-clock consultant access, it says
Scope of Services:
- PEO and EOR services
- Payroll outsourcing and HR management
- Immigration and relocation
Our Verdict
Worth a quote for companies hiring in Israel and the Gulf that prefer one regional vendor.
Remote
Provider Type:
Global EOR and payroll platform
Company Description:
Remote runs a global employment platform. On its Israel page, it says it can employ people there and handle payroll, benefits, and taxes. Firms with their own entity can use its payroll product.
Key Specialty Area:
From EOR to your own Ltd. without switching tools
Service Cost:
$699 per employee per month for EOR, and $29 per employee per month for payroll once you have an entity.
Top Advantages:
- Separate payroll plan once you open a company
- Published prices for EOR, payroll and contractors
- Country guide on Israeli leave and termination rules
Scope of Services:
- Employer of Record hiring in Israel
- Global payroll for existing entities
- Contractor management and payments
Our Verdict
A sensible choice for startups that plan to incorporate later and want one platform.
Safeguard Global
Provider Type:
Global EOR and payroll provider
Company Description:
Safeguard Global offers EOR in Israel for companies without a local entity, plus payroll, recruiting, and benefits. Its Israel page does not describe how it employs locally.
Key Specialty Area:
Enterprise EOR and global payroll
Service Cost:
Quote-based.
Top Advantages:
- Israel guide covering labor law, payroll, and benefits
- Recruiting support alongside employment
- Workforce tool for comparing markets and costs
Scope of Services:
- Employer of Record employment
- Global payroll for existing entities
- Recruiting and benefits guidance
Our Verdict
Best suited to larger companies that want Israeli hires inside an enterprise payroll program.
SZ Accounting Services Israel
Provider Type:
Israel-based accounting, tax, and HR firm
Company Description:
SZ has 2 offices in Israel and belongs to Allinial Global. It runs a professional payroll service Israel startups and multinationals use, and can act as an EOR for foreign companies without an entity.
Key Specialty Area:
Payroll and EOR for startups and multinationals
Service Cost:
Quote-based.
Top Advantages:
- Payroll cost simulations before you hire
- Tracks reserve duty, maternity leave, and holidays
- Serves staffing agencies as well as employers
Scope of Services:
- Outsourced payroll and statutory reporting
- Employer of Record for foreign companies
- Accounting, tax and HR services
Our Verdict
My pick for venture-backed startups that want payroll, bookkeeping and tax under one Israeli roof.
TopSource Worldwide
Provider Type:
Global payroll and EOR provider
Company Description:
TopSource Worldwide is a global payroll specialist with an EOR line in 164 countries. Its Israel page describes entity-free employment with a named account manager; it does not state its delivery model.
Key Specialty Area:
Payroll-first provider that can also employ
Service Cost:
No public price; quotes depend on country and team size.
Top Advantages:
- A named account manager for every client, it says
- Attendance, leave, and benefits data synced with your HR tools
- Fully managed payroll across 164 countries
Scope of Services:
- Global payroll for existing entities
- Employer of Record employment
- Entity setup and HR advisory
Our Verdict
I would shortlist TopSource when payroll quality comes first, and EOR is an occasional add-on.
How Much Payroll Services Cost in Israel
Most payroll companies in Israel charge a monthly fee per employee or per payslip, usually with a minimum charge. Larger or multi-country scopes are quoted individually.
A payroll provider in Israel that firms hire normally covers processing, pension deposits, Form 102, payslips, and year-end forms. Onboarding, terminations, severance calculations, HR advice, and visa work are often billed on top.
Employment through a provider is priced higher, since it carries the contract and the risk. Published EOR fees here are $599 a month at CWS Israel and G-P, and $699 at Remote.
Whatever the fee, statutory costs come on top. They cover employer National Insurance by band, pension of at least 6.5%, and severance funding. Technology roles usually add a study fund. The National Insurance Institute publishes the current rates and ceiling.
*As pricing is subject to change, we are listing prices as they stand in September 2026
INSIGHT: What should a payroll provider in Israel handle every month?
Israeli payroll risk sits in the monthly cycle of contributions, deposits, and reporting, so check how a provider tracks each one.
- Form 102 reporting and payment, generally by the 15th of the following month.
- Pension and severance deposits for every employee.
- National Insurance across both bands, up to the NIS 51,910 ceiling.
Many companies compare Israel with Turkey when planning an Eastern Mediterranean team. I compare Turkish options in my PEO Turkey guide.
Hiring in more countries than Israel? My roundup of the best PEO companies compares global platforms side by side.
FAQs on Payroll Services and PEO in Israel
What does payroll outsourcing in Israel include?
The provider calculates monthly pay in NIS and withholds income tax using each employee’s credit points from Form 101. It calculates National Insurance and health insurance across both bands and makes the pension and severance deposits. It then files and pays through the monthly Form 102 and issues payslips that meet the Wage Protection Law. Most providers also prepare the annual Form 126 and give every employee a Form 106. Many add travel reimbursement, recuperation pay, and leave tracking, so the payslip stays complete month after month.
How much are employer contributions in Israel?
Employer National Insurance is 4.51% on monthly pay up to NIS 7,703 and 7.6% above it, up to a NIS 51,910 ceiling. On top, the employer funds at least 6.5% for pension plus a severance component of 6%, or 8.33% under a Section 14 arrangement. Employees pay health insurance only. Because the bands and the ceiling move each January, budgets built on last year’s figures will be off. A study fund, common in technology roles, is customary rather than required, and it adds to the total cost.
What is the 9-month rule for manpower contractors in Israel?
The Manpower Contractors Law covers workers supplied by a licensed manpower contractor. After more than 9 consecutive months with the same client, such a worker is treated as that client’s own employee. Ministerial approval can extend the total to 15 months, and the rule excludes computer service positions. Because the answer depends on the structure and the role, ask any provider how it handles long placements before you sign. A clear written answer protects both you and the employee.
Can a foreign company hire in Israel without a local entity?
Yes. A provider can employ the person in Israel and handle tax, National Insurance, pension, and reporting, while you direct the day-to-day work. Check how the provider structures the employment, especially for roles expected to last longer than 9 months. Once headcount grows, many companies set up an Israeli subsidiary and move to payroll outsourcing, which usually costs less per person. Plan that move early, because you have to transfer pension funds, contracts, and tax files to the new company.
What is the minimum wage in Israel in 2026?
It is NIS 6,443.85 a month from April 1, 2026, up from NIS 6,247.67. The hourly equivalent depends on the monthly hours divisor; for example, NIS 34.64 at 186 hours. Only base pay counts toward the minimum, so overtime, bonuses, and travel reimbursement cannot be used to reach it. The rate is usually adjusted every April, so check it before approving new offers. The National Insurance Institute also publishes the matching daily and hourly rates, which help with part-time and shift workers.
What is a Section 14 arrangement?
It is an arrangement under the Severance Pay Law. The employer’s monthly severance deposits into the employee’s pension fund, usually 8.33% of salary, replace the statutory severance obligation for those wages. Without it, the employer may owe severance of 1 month’s salary per year of service on dismissal, on top of the deposits already made. I would confirm in writing which model each contract uses, and check each year that the deposits match it. Gaps found late can be expensive to close.
Helen is Anywherer’s Market Analyst & Content Researcher, with extensive experience in analyzing global employment markets and HR technology trends. She is skilled at turning complex market data into clear, well-researched insights that inform every piece of content. With a strong grasp of the EOR, PEO, and international hiring space, Helen plays a key role in keeping Anywherer’s research accurate, up to date, and genuinely useful for readers.
