Recuperation pay (havraa) is one of the pay components unique to Israel — an annual payment that originated as a historical contribution toward the cost of a vacation, and today is simply a financial obligation like any other. Because it's paid once a year and depends on seniority, an updated rate and job percentage all at once, it's also one of the easiest components to get wrong. Here are the rules.

Who is entitled

Entitlement is set in an extension order that applies to all employees in the economy. The only condition: completing one year of work with the same employer. An employee who hasn't yet completed a year isn't entitled yet — but once they have, the entitlement counts from the first day, and later it's paid for partial years too.

How many days — the seniority table

• Year 1 — 5 recuperation days
• Years 2–3 — 6 recuperation days
• Years 4–10 — 7 recuperation days
• Years 11–15 — 8 recuperation days
• Years 16–19 — 9 recuperation days
• Year 20 onward — 10 recuperation days

The daily rate

The private-sector rate is set in the extension order and updated from time to time — as of this article's update it stands at ₪418 per day. It's important to pay at the rate in effect on the payment date, not the rate for the year the recuperation pay covers. In the public sector the rate is different (higher), and in certain industries sector-specific arrangements apply.

The calculation formula

The calculation itself is simple once you have the three figures:

• Recuperation days by seniority × daily rate × job percentage
• And for part of a year — × the portion of the year being paid for

Example: an employee in her fifth year (7 days), in an 80% position, at a rate of ₪418 — 7 × 418 × 0.8 = ₪2,340.8 per year. You can check any scenario in the recuperation pay calculator, which shows an annual estimate based on the figures you enter.

When and how it's paid

• Annual payment — the common practice: once a year in one of the summer months (June–September), as a separate item on the payslip.
• Monthly spread — allowed, provided it was explicitly agreed and the item appears on the payslip separately from the salary. An addition "absorbed" into the salary without a breakdown won't count as recuperation pay.
• When employment ends — an employee who worked more than a year is entitled to pro-rata recuperation pay for any period not yet paid, including the current year.

The recurring mistakes

• Seniority that isn't updated — the employee moved into their fourth year and keeps getting 6 days instead of 7.
• An old rate — paying in summer at last year's rate.
• Ignoring job percentage — in both directions: full payment to a part-time employee, or partial payment to an employee whose scope has grown.
• Forgetting the pro-rata portion when employment ends — paying only full years and forgetting the last few months.

When each employee's position, seniority and start date sit in one system alongside the monthly payroll report, it's easier to prepare the data for the calculation and check it with the payroll accountant.

The information in this article is general and is not legal or tax advice. Collective agreements, industry extension orders and personal contracts may set different and sometimes more favorable arrangements, and the rules themselves are updated from time to time. For any specific question, we recommend consulting an employment lawyer or an accountant.