End of service benefits - Palestine


Upon the termination of an employee he/she is entitled to one month’s gross salary for every year worked and a fraction thereof starting from the first year of employment. 

Upon the employee resignation, he/she is entitled only to a portion of the allowance for severance pay benefit calculated above multiplied to the portion percentage based on number of years of service as follows:


Years of service

Portion of severance entitlement


One third


Two thirds

Over 10 years

Full amount


The payment of severance pay benefit is exempted of income tax up to one month per year of service; any excess severance benefit paid will be subject to income tax. Except for Universities employees who can get an exemption on severance benefit up to two month per year of service, according to the latest amendment on the income tax law. Also the Pension salary is exempted from income tax.