As of 2026, severance pay in Israel (pitzuim) under the Severance Pay Law equals the last monthly salary times the years of service — for example, a 12,000 ₪ salary with 5 years of service yields 60,000 ₪ in severance.
How is it calculated?
The calculation multiplies the last monthly salary (the determining salary — usually the last base salary) by the number of years worked for the employer. The statutory rule is one month's salary per year of service, and part years count proportionally — half a year adds half a month's salary.
Worked example: a last salary of 12,000 ₪ and 5 years of service — 12,000 × 5 = 60,000 ₪. Entitlement arises after 12 months of employment, in the case of dismissal (and in other cases set by law). Under a Section 14 (se'if 14) arrangement, the employer's monthly pension deposits replace part or all of the severance liability, and the amount accumulated in the fund is the severance.
Frequently asked questions
What is Section 14 for severance pay in Israel?
Section 14 of the Severance Pay Law lets the employer's monthly pension deposits replace part or all of the severance liability. When a Section 14 arrangement applies, the employee receives what accumulated in the fund instead of a last-salary × years calculation. Without Section 14, the rule is one month's salary per year — e.g., 12,000 ₪ × 5 years = 60,000 ₪.
How long do you have to work in Israel to get severance pay?
Entitlement to severance pay begins after 12 consecutive months with the same employer, in the case of dismissal. The amount is one month's salary per year of service, with part years counted proportionally.
How is severance calculated for part of a year?
Part years count proportionally to seniority. For example, with a last salary of 12,000 ₪ and 5.5 years of service: 12,000 × 5.5 = 66,000 ₪. This applies once entitlement exists, i.e., after 12 months of employment.
This calculation is a general estimate for illustration only. It does not constitute tax, pension, or investment advice, nor a substitute for personal advice from a licensed professional, and should not be relied on for decisions.
