Labour law6 min read8/28/2026

Do Vacation Days Expire in Israel: When They Are Carried Over and Paid Out

An entry stating “vacation balance — zero” on a payslip does not necessarily mean that the days disappeared lawfully. The employer must show that it offered the employee the opportunity to use the vacation, and upon dismissal, it must check the balance and pay compensation for the days eligible for redemption.

Numbers and facts

•At least 7 vacation days should be used during the year
•The balance may be carried over to the following 2 working years
•Upon dismissal, the current year and the 3 preceding years are taken into account
•Up to 14 days of notice are not considered annual vacation
•For hourly calculations, 3 consecutive months are used

When Accumulated Days Can Actually Expire

Under the Annual Leave Law, 1951, vacation should, in principle, be used in the year for which it was accrued. With the employer’s consent, an employee may use at least 7 days during the year and add the balance to vacation taken during the following two working years; the employer’s silence may be considered consent to accumulation. But old days cannot be written off automatically: the employer must prove that it genuinely allowed the employee to take vacation and that the employee did not use the opportunity for a reason within the employee’s control—for example, because the employee refused. If management did not schedule vacation for years or rejected requests, the Labor Court may view this as consent to accumulation rather than grounds for zeroing out the balance.

Can the Employer Schedule Vacation Unilaterally?

The employer is entitled to determine vacation dates and schedule collective vacation in advance, for example during a period when the business is closed. However, it may not deduct days that the employee has not yet accrued without the employee’s consent or an applicable collective agreement. Therefore, mandatory vacation when the balance is zero cannot simply be converted into a negative balance at the expense of future accruals. For the employee’s part, the employee should not be absent without authorization: preferred dates generally require the employer’s approval.

Which Days Cannot Be Deducted From the Vacation Balance

Illness or injury, reserve service, leave related to the birth of a child, mourning, a strike, or a lockout do not become annual vacation merely because they coincide with its dates. Public holidays are also not deducted from the accumulated balance: if the period included 12 vacation days and 2 public holidays, 12 days may be deducted, not 14. The Ministry of Labor states that up to 14 days of advance notice of dismissal are not included in annual vacation; from the 15th day onward, they may be counted. The employer must keep records of vacation dates, accrued amounts, and the times when they were paid.

Why Vacation Cannot Be Replaced With Money During Employment

Annual vacation is intended for actual rest, and an employee cannot validly waive it—even if the employee signed a waiver because of pressure or misunderstanding. In case No. 324/05, the National Labor Court held that compensation for unused vacation cannot be paid instead of actual vacation while the employment relationship continues. During vacation, the employee is entitled to the employee’s regular wages. Cash redemption of the balance applies when employment ends, not as a permanent addition to the monthly salary.

How to Check Compensation Upon Dismissal

When employment ends, the calculation generally includes unused days from the current working year and the three preceding years that were permitted to be accumulated. First, compare the balance on the final payslip with previous payslips, vacation records, and actual absences. Case law permits calculation based on a correctly stated payslip balance even when some of the days relate to an earlier period. For a salaried employee paid monthly, the value of a day is linked to the regular pay for a full working day; for an hourly or daily employee, the National Labor Court in case No. 9682-10-22 relied on the average for the 3 consecutive months with the highest number of days worked in the preceding year. The final amount must appear in the termination settlement in shekels, together with a clear number of days being redeemed and the value of one day.

FAQ

Can an employer zero out vacation at the end of the year?

Not merely because December 31 has arrived. To write off the days, the employer must prove that the employee was given a genuine opportunity to use the vacation but refused or did not take it for a reason within the employee’s control. Repeated written refusals of vacation requests, by contrast, may show that the loss of days occurred through the employer’s fault.

Can the entire vacation entitlement be carried over to the next year?

Carryover requires the employer’s consent, and the employer’s silence is sometimes regarded as consent. As a general rule, at least 7 days must be used during the year, and the balance may be added to vacation during the following two working years.

Can an employee be sent on collective vacation if no days remain?

The employer is entitled to schedule collective vacation, but it may not deduct days that have not yet accrued without the employee’s consent, unless an applicable collective agreement provides otherwise. A negative vacation balance should not arise automatically merely because the business decided to close.

What should an employee do if they become ill during vacation?

Days of certified incapacity for work are not counted as annual vacation. The vacation is considered interrupted for the relevant period and, where possible, is supplemented during the same working year; the employee should provide the employer with documentation of the illness in a timely manner.

For how many years is unused vacation paid upon dismissal?

The calculation generally covers the year in which employment ends and the three preceding years, taking permitted accumulation into account. At the same time, a correct balance that the employer itself regularly stated on payslips may also be relevant to older days.

What to do next

Keep payslips, vacation requests, the manager’s responses, and your own list of actual vacation dates. Before dismissal, compare the number of days, the value of one day, and the final amount in shekels; if days were written off without explanation, request a written calculation. If the employer systematically refuses to allow vacation, the materials provide for the possibility of filing a complaint with the Ministry of Labor.

Sources

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