Israeli private-sector workers to get higher vacation pay this summer

Israel’s Histadrut labor federation and the Business Sector Employers’ Presidency signed an agreement on Monday to raise vacation pay, known in Hebrew as dmei havra’ah, for private-sector employees. The deal will increase the per-day rate from 418 shekels to 451.50 shekels, adding several hundred shekels a year for an estimated 2 million to 3 million salaried workers. The agreement now goes to Labor Minister Yariv Levin for the signature of an extension order, which would apply it across the economy.

Under the new terms, a worker entitled to 10 vacation-pay days a year will receive about 335 shekels more in gross pay. In the public sector, the rate has already been updated to 511.6 shekels per day.

The increase follows two years in which the vacation-pay rate did not rise, and workers also gave up one vacation-pay day under government-backed arrangements intended to help finance the war effort and bonuses for reserve soldiers. That happened through a special law in 2024 and was repeated in 2025. The new deal reflects the accumulated cost of inflation over three years, but it does not compensate workers for the vacation-pay reductions imposed in the previous two years.

Histadrut chairman Arnon Bar-David said, “the time has come to return to the workers” after they carried the burden of the wartime period. Business Sector Employers’ Presidency chairman Dובי Amitai said the agreement “corrects an injustice” created for private-sector workers.