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Severance pay calculator 2026: Palestine (inside the Green Line)

Hani · Founder & Tax Data Researcher · ArabTaxCalc

Enter your last salary and how long you have worked to see the severance pay you are owed in Palestine (inside the Green Line), whether you resign or the employer ends the contract.

Short answer

One month's salary for each year of work, based on your last salary, for anyone who has worked at least one continuous year and is dismissed, or resigns in circumstances the law treats as dismissal. If your contract applies Section 14, the severance component in your pension fund is released to you instead. Example: 5 years of service on a basic salary of 13,000 new shekels (18,200 with allowances) gives 65,000 new shekels when the contract ends or the employer ends it.

Your service

new shekel
new shekel
Some laws use the total salary, or cap the gratuity with it.

Worked examples: basic salary 13,000 ILS

Length of serviceIf you resignIf the contract ends
1 year013,000
3 years039,000
5 years065,000
10 years0130,000

For an expat with a total salary of 18,200 ILS (basic plus allowances). Amounts in ILS.

How it is calculated

The 5-year example above, step by step:

  1. One month's salary for each year of work: 13,000 shekels × 5 years = 65,000 shekels.
  2. It is based on the last salary, and part years are paid pro rata (section 12 of the Severance Pay Law).
  • Some resignations are treated as dismissal and give severance pay, including resigning for health reasons, to care for a baby within 9 months of the birth, because of a real worsening of working conditions, after reaching retirement age, or because of moving home in cases set out in the law (sections 6 to 11).
  • If your contract applies section 14, the employer's deposits for the severance component in the pension fund (6% or 8.33%) replace severance pay to the extent agreed, and the amount built up in the fund is released to you even if you resign.
  • Tax: severance pay is exempt up to one month's salary for each year of work, with a ceiling of 13,750 shekels per year in 2026, and anything above that is taxable.
  • The wage used for severance pay is the basic salary plus the additions set by the regulations under the law, so we used the basic salary.

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Gratuity questions about Palestine (inside the Green Line)

How much severance pay will I get in Palestine (inside the Green Line)?

One month's salary for each year of work, based on your last salary, for anyone who has worked at least one continuous year and is dismissed, or resigns in circumstances the law treats as dismissal. If your contract applies Section 14, the severance component in your pension fund is released to you instead. Example: 5 years of service on a basic salary of 13,000 new shekels (18,200 with allowances) gives 65,000 new shekels when the contract ends or the employer ends it.

How is severance pay (pitzuim) worked out?

One month's salary for each year of work, based on your last salary, for anyone who has worked at least one continuous year and is dismissed, or resigns in circumstances the law treats as dismissal. If your contract applies Section 14, the severance component in your pension fund is released to you instead.

Sources

  1. Tax authority: guide to calculating income tax on salaries for 2026, updated April 2026 (brackets after the widening, the surtax, credit point value of 242, qualifying income ceiling of 9,700, average wage of 13,769, the list of qualifying towns and their rates, severance pay exemption of 13,750) Official source · checked 2 October 2026
  2. National Insurance Institute, study "The Mandatory Pension Law" 2023: 6% from the employee, and 6.5% pension and 6% severance from the employer Official source · checked 2 October 2026
  3. Severance Pay Law 1963, consolidated text (sections 1, 6 to 11, 12 and 14), published on the National Insurance Institute website Official source · checked 2 October 2026

Based on each country's labour law, as listed on our sources page. Special cases (fixed-term contracts, dismissal for misconduct, domestic workers) can differ; check with the labour ministry in your country.

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