Israel's National Labor Court has ruled that a daily incentive a bakery worker received for every day she showed up to work is part of her base wage. The same goes for an "adaptation incentive" paid to her as compensation when her night shifts were cancelled. The ruling was reported on 5 November 2026. Both payments now count in the base from which social benefits are calculated, starting with pension contributions and severance pay.
A separate supplement she received for night work was not counted as base wage in this case. That distinction is what matters to any employer. The National Labor Court is the top court for employment law in Israel, and the ruling bears on every case with similar facts.
The payslip label decides nothing
Plenty of small businesses pay staff something on top of a regular monthly salary: a daily premium, an attendance bonus, a per-shift supplement, a payment to make up for changed hours. An employer who calls a payment an "incentive" or a "supplement" sometimes assumes it stays out of the benefits calculation. Israel's labor courts keep ruling that the name does not settle it.
The test they apply is fairly simple. Wages are what an employee receives in return for working. A supplement is a payment that depends on a specific condition, such as not missing a single day in the month, arriving on time and keeping discipline. A payment of the second kind usually stays outside the wage base. A payment of the first kind belongs in it, even when it sits on its own line of the payslip.
One worker's payslip, year by year
A regional labor court dealt with the same question in a partial judgment dated 21 December 2025, in the case of a worker paid two incentives with these names. According to a summary of that judgment, from October 2012 she received a daily premium of ₪8.8, rising to ₪17.6 a day from September 2016. The payslip line changed names several times over the years, from premium to daily incentive to non-absence incentive, but the amount and the method stayed the same: a payment for each day she came to work.
In July 2020, when night work ended, the employer began paying her another ₪20 a day as an adaptation incentive, based on the number of working days in the month. Its purpose was to make up for the drop in pay caused by the loss of night shifts.
The regional court drew a line between that daily payment and a monthly attendance bonus. A monthly bonus varies with the number of absences, so it is conditional. The daily payment was not reduced when she was absent or late. It was simply paid for every day she worked. That made it part of her regular wage for pension contributions, severance, vacation, holidays and sick pay. The adaptation incentive was treated as a payment standing in for lost wages.
Small daily sums add up
Every component that enters the wage base raises the monthly pension contribution and the severance calculation at the end. ₪17.6 a day looks small, but it is paid for every working day, month after month. For a long-serving employee, the gap in benefits can reach tens of thousands of shekels or more.
This is the third ruling in two months in which an Israeli labor court looked at a payslip item and decided it was wages in every sense. In October a court held that a salesperson's commissions count toward overtime pay, and another ruled that money booked as a loan to an employee was in fact wages.
Check the pay structure before someone leaves
An employer in Israel who pays staff a fixed amount for each working day, under any name, should check with whoever prepares the payslips whether that component is included in the base for pension contributions. The same check applies to a fixed payment that replaces income an employee lost, such as cancelled shifts or shortened hours.
If the goal really is to reward full attendance, the courts' distinction shows how. A bonus paid only in a month with no absences, which shrinks or disappears when the employee misses days, is a conditional supplement. A payment that arrives automatically for every day worked is a wage. Anyone planning to change the pay structure of long-serving staff should talk to an employment lawyer first.