Overtime and Shabbat and holiday rates are among the most complex parts of payroll in Israel — because they combine several layers of rules at once. Here's a breakdown of how it works.
Overtime tiers
The Hours of Work and Rest Law sets pay rates that rise as more overtime hours build up on the same day:
- 100% — regular pay, for the base working hours.
- 125% — for the first two overtime hours of the day.
- 150% — for every overtime hour beyond that.
Advanced systems such as RayClock also support custom rate tiers (for example 175% or 200%) under employment agreements or an organization's internal policy, as well as accumulating overtime on a weekly basis, not only a daily one.
Shabbat and holiday rates
Work on Shabbat, a holiday or a holiday eve usually earns a higher rate — typically 150% and up, depending on the organization's policy and the agreements that apply to it. The practical difficulty is automatically identifying which days are Shabbat, a holiday, a holiday eve or Chol HaMoed (the intermediate festival days) — the Hebrew calendar isn't fixed from year to year, and holiday dates move.
RayClock uses the Hebrew calendar to identify the type of day (Shabbat, holiday, holiday eve, Chol HaMoed) for every date and apply the right pay multiplier — with no need to update a calendar by hand at the start of every Hebrew year.
The Israeli work week
Unlike many international systems that assume the work week starts on Monday, in Israel the business week starts on Sunday. Weekly overtime accumulation has to be based on this definition — otherwise the calculation simply won't be right.
Want to check a specific day?
In the overtime calculator you can enter a clock-in and clock-out time and get an instant breakdown of regular, 125% and 150% hours — including Shabbat and holidays. Free, no sign-up.
Why it's hard to do by hand
Combining overtime tiers, varying Shabbat/holiday rates and the boundaries of the Israeli work week creates dozens of possible scenarios every month. RayClock runs all of this logic automatically on every hours record, so there's no need to build separate formulas for each employee.
The full picture — who the law covers, breaks, weekly rest, night work, record-keeping and enforcement — is in our guide Israel’s Hours of Work and Rest Law: what every employer must know.
The information in this article is general and is not legal advice. Exact rates may vary according to the law, collective agreements and personal employment contracts.