Employment guide
Employing in Palestine
What employers need to know: the labour law, payroll and tax, leave, and how employment ends. Last reviewed November 2026.
Palestine at a glance
Language
Arabic
Population
≈ 5.5 million
mid-2025 · 3.4M West Bank, 2.1M GazaProclaimed capital
East Jerusalem
Currency
Israeli shekel (ILS)
US dollar and Jordanian dinar are also legal tenderMinimum wage
ILS 1,880 / month
set by the Council of Ministers, in force since 2022VAT, standard rate
16%
Real GDP growth
+4% (2025)
still 24% below 2023 levelsUnemployment, West Bank
28% (2025)
Payroll frequency
Monthly
The rules that shape every contract
The law sets the minimum. Where Techtative goes further, it’s marked Techtative
- Governing law
- Labour Law No. 7 of 2000 covers private-sector employment in the West Bank and Gaza.Labour Law No. 7/2000
- Working hours
- 45 hours per week.Art. 68Techtative 40 hours a week, maximum.
- Overtime
- Paid at 150% of the hourly wage, by agreement, up to 12 hours a week.Art. 71Techtative Work on public holidays is paid at 250%.
- Weekly rest
- At least 24 consecutive paid hours. Friday by default.Art. 72–73Techtative 48 hours: a full two-day weekend.
- Probation
- Three months, extendable once by the same employer.Art. 29
- Paying wages
- Monthly-paid staff are paid at the end of each month, and never more than five days late.Art. 82
- Social security
- There are no social security contributions. The employer funds end-of-service pay directly.
- Wage deductions
- Only for court orders, employer loans (max 10% of basic wage per deduction) or approved fines.Art. 83
Progressive rates on annual income
Employees are taxed on wages, salaries and benefits under Income Tax Law No. 8 of 2011 and its amendments. Tax is withheld through monthly payroll.
5%
ILS 1 – 75,000
10%
ILS 75,001 – 150,000
15%
ILS 150,001 and above
Statutory leave entitlements
Annual leave
Two weeks of paid leave per year, rising to three weeks after five years with the same employer or in hazardous work. It can't be waived, and can't be carried over for more than two years.
Art. 74Sick leave
14 days at full pay per year on a medical report, plus another 14 days at half pay.
Art. 79Public & religious holidays
Paid leave on official and religious holidays, not counted against annual leave. At Techtative, work on a public holiday is paid at 250%.
Art. 75Maternity leave
10 weeks paid, at least six of them after birth, for women with 180 days of service. A daily nursing hour for a year after birth. Dismissal because of maternity leave is prohibited.
Art. 103–104Paternity leave
The Labour Law does not provide statutory paternity leave for the private sector. Civil servants have had three days since 2022.
UN ESCWA, 2025Other leave
Three days' bereavement leave. Up to 10 days a year for emergencies (from annual leave). One week of cultural leave. A one-time two-week Hajj leave after five years' service.
Art. 76–78Notice, end-of-service pay and termination rules
Every employee with a year of service is owed an end-of-service bonus of one month’s last wage (excluding overtime) for each year worked, with part-years counted pro rataArt. 45. What else is owed depends on how the employment ends.
Techtative Full end-of-service for everyone
We reserve 1/12 (8.333%) of each employee’s salary every month for their end-of-service benefit, so every employee receives the full amount whenever and however they leave, including resignations the law would pay at a third or two-thirds. Dues are always funded and nothing is left to dispute, which protects our clients and us from legal complications.
| How it ends | Notice | End-of-service bonus | Also owed / note |
|---|---|---|---|
| During probation | Not required. Either party may end the contract. | Not due (requires one year of service) | Outstanding wages |
| Employee resigns | One month in writing (monthly-paid) | By law: 1/3 if under 5 years · 2/3 for 5–10 years · full after 10 years (Art. 42) | Techtative pays the full end-of-service to everyone who resigns, at any tenure |
| Termination with notice or redundancy | One month's written notice, with receipt. The employee may be absent for the second half of the notice period. | Full: one month's last wage per year of service | Redundancy for technical or financial reasons must be notified to the Ministry of Labour |
| Dismissal for cause | Not required for the misconduct listed in Art. 40 | Reviewed case by case against the law | Grounds include fraud, gross negligence, repeated violations, unexcused absence, disclosing secrets |
| Arbitrary (unjustified) dismissal | Not applicable: the termination itself is unlawful | Full | Plus compensation of two months' wages per year of service, capped at two years' wages |
- Final pay. Wages are a privileged debt, and payment may not be more than five days lateArt. 82, 85.
- Protected reasons. Union membership, acting as a worker representative, or filing a complaint or lawsuit are never valid grounds for dismissal Art. 39.
- On exit. The employee may request a certificate of service. Both sides return each other’s documents and property Art. 43–44.
How Techtative handles it
Every exit follows the law and our MSA
As your Employer of Record, Techtative is the legal employer, so we carry out every termination under the Labour Law. Our Master Services Agreement sets out each step and who pays for what before you ever hire.
- 01You let us knowGive notice under the MSA, with the reason for the decision.
- 02We review the groundsChecked against the Labour Law before anything is sent.
- 03Notice & handoverWritten notice with receipt, and a managed notice period.
- 04Final settlementEnd-of-service is already funded. Remaining dues are calculated and invoiced transparently.
- 05Clean closePayment on time, a certificate of service and asset return.
Quick answers
Employing in Palestine: common questions
What is the minimum wage in Palestine?
ILS 1,880 per month. It is set by the Council of Ministers and has been in force since 2022.
How many hours a week can employees work in Palestine?
Labour Law No. 7 of 2000 sets a maximum of 45 hours a week (Art. 68), with overtime paid at 150% by agreement, up to 12 hours a week (Art. 71). Techtative employees work 40 hours a week at most.
How is end-of-service pay calculated in Palestine?
An employee with at least one year of service is owed one month’s last wage (excluding overtime) for each year worked, with part-years counted pro rata (Art. 45). On resignation the law pays a third under five years, two-thirds for five to ten years and the full amount after ten years (Art. 42). Techtative pays the full amount to everyone, at any tenure.
How long is probation in Palestine?
Three months, which the same employer can extend once (Art. 29). Either party may end the contract during probation without notice.
What notice period applies when employment ends?
One month in writing for monthly-paid employees, whether the employee resigns or the employer terminates with notice. No notice is required for dismissal for the misconduct listed in Art. 40.
How much annual leave do employees get in Palestine?
Two weeks of paid leave a year, rising to three weeks after five years with the same employer or in hazardous work (Art. 74). Sick leave is 14 days at full pay plus 14 days at half pay (Art. 79).
Are there social security contributions in Palestine?
No. There are no social security contributions; the employer funds end-of-service pay directly.
What are the income tax rates in Palestine?
Personal income tax is progressive on annual income: 5% up to ILS 75,000, 10% from ILS 75,001 to 150,000 and 15% above ILS 150,000. It is withheld through monthly payroll.
Can a foreign company employ people in Palestine without a local entity?
Yes, through an Employer of Record. Techtative becomes the legal employer through its US or Palestinian entity and handles contracts, payroll, benefits and labour-law compliance, while the team works for you day to day.
Sources
Reviewed November 2026. This guide is general information, not legal advice. Rules can change and individual cases differ. Talk to us before acting on a specific situation.
- Labour Law No. 7 of 2000 (English text, FAO FAOLEX)
- PCBS: Performance of the Palestinian Economy 2025 & Forecasts 2026
- PCBS: Labour Force Survey, West Bank, Q4 2025 (minimum wage)
- PCBS: population estimates, mid-2025
- PwC Worldwide Tax Summaries: personal income tax (reviewed Aug 2026)
- PwC Worldwide Tax Summaries: other taxes (VAT)
- UN ESCWA Gender Justice country matrix 2025 (maternity & paternity)
- US Commercial Service: West Bank and Gaza trade financing (currencies)
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