Israel Boosts Private Sector 'Dmey Avraah' Holiday Pay

Private sector employees in Israel are set to receive a financial boost following a recent government decision to increase the value of "dmei avraah," or holiday pay, for recuperation days. The payment, which is tied to an employee's length of service, has been raised from 418 to 451 shekels per day. This adjustment specifically applies to workers in the private sector, as public sector employees have already received their June salaries calculated at the new rate.

The Histadrut labor union has provided guidance to employers on how to implement the retroactive adjustment. Employees who were paid at the old rate of 418 shekels for recuperation days in the previous month will receive the difference as a back payment in their upcoming salary. Those who have not yet received their holiday pay for the current year will be paid according to the new rate of 451 shekels per day from the outset.

On average, eligible private sector employees can expect an additional sum of approximately 300 shekels before mandatory deductions. The exact amount will vary for each individual, depending on their accumulated seniority at their current workplace, which determines the number of paid recuperation days they are entitled to. Standard deductions, including income tax, health insurance contributions, and National Insurance Institute (Bituah Leumi) payments, will be applied to this additional amount.