How to calculate pitzuim
The Severance Pay Law, 1963, sets the rule: one last monthly salary for each year of work. Severance = last monthly salary × years of seniority. Full months count as twelfths of a year, and leftover days count as part of a month. Seniority is measured with the same employer or at the same workplace, including the first and last day.
When severance pay is due
- Dismissal. An employee dismissed after at least a year is entitled, except in special cases where the law or a tribunal denies it.
- Resignation treated as dismissal. This includes a substantial worsening of conditions and poor health of the employee or a family member. If the employer fixed the problem and you resigned anyway, no severance is due.
- Other cases. The law lists further cases, including payment to the survivors of an employee who died. Check any special case with Kol Zchut or a lawyer.
Section 14: deposits in place of severance
The usual deposit is 8.33% of salary, one month out of twelve. Where the arrangement applies from day one on the full salary, there is no extra payment from the employer. Where it began midway, deposits were lower or did not cover the full salary, the law still applies to the uncovered part. Choosing Section 14 in the calculator changes the explanation, not the amount.
Part-time work and variable pay
If pay changed over the years, job size grew or shrank, or pay includes commission and variable hours, the answer depends on the details. The calculator gives an estimate from one salary. Enter a monthly average for variable pay, and check the result with legal advice before relying on it.
Tax on severance in 2026
The exemption is the lower of the severance paid and ₪13,750 × years of seniority. The calculator does not compute the tax rate on the rest, because it depends on your other income. It shows the exemption only for an end date in 2026.
Unused vacation is also paid out when a job ends: see the vacation days calculator.
This is general information, not legal advice. A collective agreement, personal contract or extension order can give more, and severance can be denied or reduced in special cases.
Sources
- Kol Zchut: severance pay (Hebrew)
- Kol Zchut: severance pay after resigning (Hebrew)
- Kol Zchut: resigning over a substantial worsening of conditions (Hebrew)
- Kol Zchut: resigning over the health of the employee or a family member (Hebrew)
- Kol Zchut: income tax exemption on severance pay (Hebrew)
- Israel Tax Authority: income tax guide for salaries, January 2026 onwards (PDF, Hebrew)
- Severance Pay Law, 1963, on Wikisource (Hebrew)
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