EOR services for foreign companies
Hire and pay Israeli talent with no local entity, no Israeli bank account and one invoice in your currency.
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Pay Israeli workers in USD · from abroad, legally
Pay Israeli employees in USD, legally
Foreign companies can define compensation in USD while the Israeli payroll is processed locally, documented properly and turned into a compliant Israeli payslip — through NETO, a licensed Israeli manpower contractor (#1565). No local entity required.
סיכום AI · תשלום לעובדים בישראל בדולרClick to read the page summary
הדף מסביר איך חברות זרות יכולות לשלם לעובדים ישראלים בדולר או מחו״ל, כחוק. NETO מטפלת בפיירול הישראלי, תלושי שכר, ביטוח לאומי ופנסיה תחת רישיון קבלן כוח אדם 1565. הדף מסביר מתי תשלום דולרי מתאים, איך הופכים תקציב דולרי לתלוש ישראלי ומה החלטות שער החליפין החשובות. הוא כולל גם הסבר על אופן חישוב העמלה.
AI summary · quick answer
Can you pay an Israeli worker in USD?
Yes. An Israeli worker can be paid based on a USD salary or USD-denominated budget, but the Israeli payroll must still be processed correctly under Israeli law. In practice the company defines the compensation in USD, NETO invoices the foreign client, converts the payroll into Israeli shekels when needed, issues an Israeli payslip, and handles tax, National Insurance, pension and social-benefit reporting. The structure must be documented clearly to avoid exchange-rate confusion, payroll mistakes or misclassification risk.
- USD budget — compensation is agreed commercially in dollars.
- Israeli payslip — payroll, deductions and benefits reflect Israeli law.
- No local entity — NETO provides the local employment infrastructure.
- Documented — contracts, invoices and payslips are kept on record.
On this page
When it fits
When USD-based pay makes sense
USD-based compensation is common when a US or international company hires Israeli talent — especially in software, product, operations, finance, marketing and remote-support roles. The foreign company often thinks in dollars, budgets in dollars, and compares the Israeli worker to other global hiring options.
The legal and operational point is simple: the worker is located in Israel, so Israeli payroll rules still apply — tax withholding, National Insurance, pension, vacation, sick leave, severance treatment and local employment documentation. A licensed Employer of Record in Israel lets the company keep a clean USD budget while those obligations are met locally.
- Global tech and startup teams hiring Israeli engineers and specialists.
- Companies that want one clear cost and one invoice, not local payroll admin.
- Workers who want a real Israeli payslip instead of an informal transfer.
For the foreign company
The employer wants one clear cost, one invoice, and no need to open an Israeli company. NETO provides the local employment and payroll infrastructure, so the company can work with Israeli talent while keeping the process organized. Compare the routes in our EOR vs. subsidiary in Israel guide, and see the full employer cost in Israel breakdown.
For the Israeli worker
The worker receives a local payslip and social-benefit handling instead of an informal transfer or a confusing contractor arrangement. That improves clarity and helps keep the relationship documented. It also protects Israeli employee rights and correct pension contributions.
How it works
From USD budget to Israeli payslip
A clear, documented workflow. The commercial budget is defined in USD; NETO translates it into a compliant Israeli payroll run.
1
Define the budget
The foreign company defines the role, the monthly budget, and whether the amount is fixed in USD or converted monthly. Prevents disputes over exchange rates and total employer cost.
2
Run a simulation
NETO calculates expected employer cost, employee gross, employee net, payroll taxes and required social contributions, so both sides understand the economics before work begins.
3
Issue the invoice
NETO issues an invoice to the foreign company according to the approved structure. The client receives business documentation instead of managing Israeli payroll directly.
4
Process payroll
NETO issues an Israeli payslip and handles payroll reporting, National Insurance, tax withholding, pension and related items, so the worker is paid through a local payroll framework.
Step 5 — maintain records. Contracts, invoices, payslips and payroll documentation are kept for review and compliance needs. Good documentation reduces operational and legal risk. See how a single invoice to a foreign client or a recurring salary payment by invoice is handled.
USD vs. payroll
USD agreement vs. Israeli payroll
The salary can be discussed in USD, but the worker's payroll must be processed according to Israeli requirements. That means the payslip, deductions and social benefits need to reflect Israeli payroll law and reporting practice.
The key point is to separate the commercial budget from the payroll execution. The foreign company may approve a USD budget, while NETO translates that into the Israeli payroll workflow. If a worker is being treated as a contractor, review the employee vs. contractor test in Israel and the difference between an invoice and a payslip before deciding on a structure.
- Budget stays in USD for the client's accounting.
- Payslip, tax and social benefits follow Israeli payroll rules.
- The two layers are documented separately to avoid confusion.
Exchange rates
Important exchange-rate decisions
Before work starts, the parties should decide how exchange rates are handled. The right answer depends on the commercial arrangement and should be documented.
| Method | Advantage | Risk |
|---|---|---|
| Invoice-date rate | Clear and easy to document. | Payment delay may create FX differences. |
| Payment-date rate | Matches actual received funds more closely. | The worker may not know the exact net amount in advance. |
| Fixed monthly rate | Creates predictability for the worker and client. | One side may absorb currency movement. |
Why NETO
Why use NETO
NETO is a licensed Israeli manpower contractor and local employment/payroll provider. It helps foreign companies hire and pay Israeli workers without opening a local entity, while giving the worker an Israeli payslip and a documented payroll process.
Licensed provider
Israeli employment and payroll workflow under manpower contractor license #1565.
Payroll clarity
Payslips, tax withholding, National Insurance and pension handling on every run.
Cross-border fit
Built for foreign companies hiring Israeli workers without local setup friction.
Cost visibility
A simulation-focused process before payroll and invoicing begin, so both sides see the numbers.
Also for freelancers
An Israeli freelancer with a foreign client can invoice through NETO and receive an Israeli payslip.
Transparent commission
NETO's fee is 5% of the client invoice before VAT. The worker never pays a commission.
Licensed & verifiable
License #1565 and how the fee works
NETO holds Israeli Manpower Contractor License #1565 and operates under Israeli employment and payroll requirements. Licensed manpower contractors can be verified on the official Israeli government website. Read more about the manpower contractor license and the extension order for manpower services.
Commission: NETO charges 5% of the client invoice, calculated before VAT. The fee is paid by the client (the foreign company); the worker never pays a commission. For a full cost picture, see the EOR Israel cost & pricing breakdown.
Need to pay an Israeli worker from abroad?
NETO can help you check the structure, simulate the cost, and process the payment through a local Israeli payroll workflow — with a USD budget and a compliant Israeli payslip.
Watch · how employers work with NETO
Two minutes that show exactly what happens from signup to payslip · before you commit to anything.
FAQ
Paying Israeli workers in USD — FAQ
Can an Israeli employee be paid in USD?
The compensation can be agreed commercially in USD, but the Israeli payroll process still needs to comply with Israeli payroll, tax, National Insurance and social-benefit requirements. In practice the budget is defined in USD while the payslip is issued under Israeli law.
Does the foreign company need to open an Israeli entity?
Not necessarily. With an EOR or local employment provider structure, a foreign company may work with Israeli talent without opening a local company, depending on the facts of the case.
Who handles Israeli pension and National Insurance?
When the worker is paid through NETO's payroll structure, NETO handles the Israeli payslip workflow, including payroll deductions, National Insurance and pension-related processing.
Can a freelancer also use this structure?
In many cases, an Israeli freelancer working with a foreign client can use NETO to issue an invoice to the client and receive payment through an Israeli payslip. The exact structure depends on the work arrangement.
How are exchange rates handled?
Before work starts, the parties decide how the exchange rate is set: the rate on the invoice date, the rate on the payment date, or a pre-agreed fixed monthly rate. The right choice depends on the commercial arrangement and should be documented.
Is this tax advice?
No. This page explains the operational payroll structure. Specific tax treatment depends on the facts, the client, the worker and the service provided. Tax-specific questions should be reviewed with a qualified advisor.
More on paying & employing in Israel
Israel payroll, explained
Gross-to-net, employer contributions, pension and tax filing — how Israeli payroll actually works.
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Employer of Record Israel
The full EOR guide: how foreign companies become compliant Israeli employers without an entity.
Read more
Invoice foreign clients from Israel
How an Israeli worker or freelancer bills an overseas client and gets paid through a local payslip.
Read moreNote: the information on this page is for general informational purposes only and does not constitute legal or tax advice. Specific tax treatment depends on the facts, the client, the worker and the service provided. For specific questions, consult a qualified Israeli employment or tax advisor.
