Last month, the Histadrut and the Finance Ministry came to an agreement on the 2025 budget. The Finance Ministry agreed to retract planned cuts to the public sector and agreed to provide eight paid long weekends to public sector workers over the coming two years. The Histadrut agreed to reduce some salary additions and to remove one paid day off for all public sector workers. Now that negotiations have ended, here’s what public sector workers in Israel need to know about how the agreement will look in practice and how it will affect their payslips.
How will public sector salaries be affected?
Throughout 2024 and 2025, public sector salaries will continue to rise according to the 2023 framework agreement between the Histadrut and the Finance Ministry and according to seniority pay bumps, but will also be reduced in some areas according to the recent agreements. On average, public sector bumps amount to 1% per year.
Under the 2023 framework agreement, public sector employees were set to receive a 2% salary increase in December 2024, a 1.5% salary increase in April 2025 and again in April 2026, and a 1% increase in April 2027, for a total salary increase of 11%. Alongside those pay raises, under the new agreement, public sector salaries will see a temporary cut of 2.29% in between December 2024 and December 2025. That cut will be reduced to 1.2% between December 2025 and January 2026, and in January 2027 the cuts will end. Unlike cuts to salary additions (like seniority bonuses), these temporary wage reductions will not influence public sector pensions, including final account payments.
How will the salary raise look in the public sector?
There will be a small dip in salaries in the first few months from December 2024 as the cuts initially come into effect. However, from April 2025 there will be a net rise in wages to 1.2% of the starting wage despite the cuts.
For example, a public sector employee currently earning 10,000 shekels ($2,746) will see their salary decrease to 9,966 shekels ($2,736) in December. In January 2025, a seniority pay bump will increase that salary to 10,066 shekels ($2,764). In April 2025, the framework agreement pay raise brings the total to 10,214 shekels ($2,804). In January 2026, the salary cut will be reduced, and they will earn 10,430 shekels ($2,863). In April 2026, they will receive an additional pay raise, bringing their salary to 10,581 shekels ($2,905). Their pension contributions during this period will be higher. In January 2027, the salary reduction will be completely eliminated, and they will earn 10,815 shekels ($2,969). In April 2027, with an additional pay raise, the worker is entitled to 10,918 shekels ($2,997).
Based on a salary of 10,000 shekels in November 2024, after seniority increases, framework agreement raises, and reductions due to the war:
| Month/Year | Pensionable Salary | Actual Salary |
| Nov-24 | 10,000 | — |
| Dec-24 | 10,200 | 9,966 |
| Jan-25 | 10,200 | 10,066 |
| Apr-25 | 10,454 | 10,214 |
| Jan-26 | 10,557 | 10,430 |
| Apr-26 | 10,710 | 10,581 |
| Jan-27 | 10,815 | 10,815 |
| Apr-27 | 10,918 | 10,918 |
Starting in 2025, one day off valued at 418 shekels ($115) will be deducted from the salaries of all workers in both the private and public sectors. For employees working part time or only part of 2025, the value of this day off will be deducted proportionally. Employees whose average monthly salary does not exceed 6,150 shekels ($1,688) and are entitled to five rest days in 2025 will have only half a day deducted.
What will the money be used for?
The agreements between the Histadrut and the Finance Ministry stipulate that the salary and rest day reductions are conditional on all the funds—approximately 5 billion shekels ($1.4 billion) in 2025 and 2.5 billion shekels ($690 million) in 2026—being earmarked for benefits and assistance to reservists.
What are the long weekends established in the agreement?
As compensation for the salary reductions in the public sector, it was agreed that public sector employees will be entitled to four collective vacation days in each of the years 2025 and 2026.
In 2025, public sector employees will receive vacation days on
• Shushan Purim (Sunday, March 16)
• The end of the summer vacation (Sunday, August 24)
• The bridge day between Yom Kippur and Sukkot (Sunday, October 5)
• The second-to-last day of Hanukkah (Sunday, December 21)
In 2026, they will receive vacation days on:
• Purim (Tuesday, March 3)
• The day before Passover Eve (Tuesday, March 31)
• Thursday, July 30
• The end of the summer vacation (Sunday August 23)
Generally, these long weekend days will be on dates when there are no educational frameworks operating. In workplaces where employees are required to work on these dates, alternative vacation days will be provided. These substitute days cannot be accumulated or redeemed for payment.
What measures were averted following the agreements?
Due to the heavy expenditure of the war, the Finance Ministry initially proposed several measures which would harm workers and vulnerable populations. During negotiations, the Histadrut prevented the ministry’s intention to freeze the planned increase in the minimum wage, which is set to rise in April to approximately 6,000 shekels ($1,647). The increase in the minimum wage will also affect the salaries of public sector employees whose salaries are calculated based on minimum wage.
Additionally, a freeze on updating the National Insurance Scheme (Bituach Leumi) allowances for seniors and individuals with disabilities was prevented. The Histadrut also blocked the ministry’s plan to raise taxes on “training funds,” short-term tax-free saving plans provided to workers, as well as the increase in taxes on pensions and the freeze on budgeted pensions.
The Finance Ministry’s proposal to permanently halt the increase in tax benefits for retirees from 52% to 67% was also averted. Instead, it was decided to delay this increase by only one year, until January 2026. This change represents approximately 300 shekels ($82) per month for retirees with a pension of about 12,000 shekels ($3,296) per month.
The Histadrut also managed to secure additional achievements, including the full implementation of the 2016 and 2023 framework agreements for public sector retirees through the Arrangements Law, as well as improved employment conditions for contract workers in security and cleaning services in Israel. This includes the payment of a 6,000-shekel ($1,648) framework agreement bonus to security and cleaning workers employed in government offices.
This article was translated from Hebrew by Hannah Blount.
