Over 2 million employees to receive convalescence pay supplement
An extension order signed last week increases convalescence pay for private sector employees by 8%. Those who have already received their 2026 payment may be entitled to a retroactive adjustment.
Many employees in Israel are set to see a pleasant surprise in their upcoming pay slips, following an extension order signed late last week by the Histadrut and the Business Sector Presidency. The benefit involves an 8% increase in convalescence pay, raising the daily rate to 451.5 NIS—a change that will result in thousands of shekels in additional income for many workers.
How is convalescence pay determined?
Convalescence pay is calculated annually based on seniority: an employee with one year of service receives 5 days of pay, with the entitlement rising to 10 days for those with 20 or more years of seniority.
Last year, due to the "Iron Swords" war and necessary austerity measures, a new private-sector employee received 418 NIS per day (1,672 NIS annually). This year, the rate has been raised to 451.5 NIS per day, totaling 2,257 NIS annually—an increase of 600 NIS compared to last year. The benefit also applies to the public sector, where rates will rise by 8.5% to 511.6 NIS per day.
Beyond the 2026 increase, the order stipulates that the base index for updating convalescence pay in 2027 will be aligned with the Consumer Price Index of May 2026.
Impact of the war
In 2025, to help fund the war effort, one day of convalescence pay was deducted from most employees (with half deducted for vulnerable groups). These funds were directed toward income tax rather than employee pockets. Furthermore, as convalescence pay had not been adjusted since 2023, this update marks a significant development for millions of workers.
The agreement required the signature of Justice Minister Yariv Levin, who finalized the extension order last week.
Eligibility and payment timing
The order affects between 2 and 3 million employees annually. Employers are required to pay the benefit during the summer months (June through September), depending on company policy or collective bargaining agreements.
Retroactive adjustments
Employees who have already received their 2026 payment at the previous rate are entitled to the difference. Adv. Irit Ullman, a labor law partner at Gornitzky & Co., explains: "If the 2026 convalescence pay was issued at a rate lower than the updated 451.50 NIS per day, employers will likely need to provide a retroactive supplement. This requires an individual assessment based on each employee's seniority, position scope, and applicable workplace regulations."
Employers are therefore advised to review their payroll records to ensure full compliance with the new regulatory guidelines.
