Israel raises the minimum wage: practical information for employers

The minimum wage in Israel is rising by 6.25% to ILS 6,247.67 per month as of April 1, 2025 (compared to ILS 5,880 last year).

The minimum wage for hourly workers is increasing to ILS 34.32, compared to ILS 32.30 prior to the amendment.

This update applies to the entire economy and has additional implications relating to rights of employees who are earning minimum wages. 

When does the updated minimum wage come into effect?

The update comes into effect on April 1, 2025. This means that the update must be applied as of the April 2025 salary (payable at the beginning of May 2025).

When will employees see the update in their pay slips?

Employees will see the update in their April 2025 salary payable at the beginning of May. Employers must update their payroll systems and payroll managers and, of course, they must update the minimum wage data in all employees’ pay slips, in conformity with the Wage Protection Law of 1958.

What does the minimum wage include?

Pursuant to the provisions of the Wage Protection Law, the minimum wage includes the base wage, combined wages, cost-of-living increments or any other fixed increments payable to employees. The minimum wage does not include bonuses, premiums, reimbursements of expenses, seniority, 13th salary or family allowances, and accordingly, the update to the minimum wage does not apply to these components.

Does the minimum wage update affect other payroll aspects?

The update to the minimum wage will increase the sums of social contributions to provident funds and severance pay, vacation pay, overtime pay and sick pay. The update to the minimum wage is also expected to reduce, to some extent, the number of overtime hours included in a global overtime wage component insofar as it being paid to employees.

What additional actions should employers take as a result of the update?

Every employer must post a notice of the minimum wage update on the workplace bulletin board (even if not all employees are being paid a minimum wage). This notice must specify the details of the update to the minimum wage. For your convenience, you can find the wording of the notice of the update of the minimum wage by clicking here.

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Adv. Noemie Amar is an associate in our firm’s employment department.

Barnea Jaffa Lande’s employment department is at your service to provide professional advice in this regard and/or about any other labor law matters.