Introduction: a timing quirk that benefits banks
In Israel, the convergence of a major religious holiday and the payroll calendar is revealing an unexpected flank of the banking system’s revenue. When the eve of Yom Kippur falls on October 1, many employees expect their September salaries to be in their accounts that same day. However, the national interbank payments system, known in Hebrew as זה”ב, does not operate on the holiday. The result is a cascade of delayed transfers and, for some workers, an extension of overdraft charges that translate into real, measurable revenue for banks.
The mechanics: holiday timing and a paused payments system
This year, the holiday alignment means that September salaries are postponed because the day is treated as a holiday for the banking system. Banks close early on Friday, often around noon, and the זה”ב payments network is not active during the holiday. Consequently, salaries that would normally settle on October 1 are moved to October 3 (Friday). Some employers then process payments on Sunday, October 5, pushing out the settlement window by an extra 2–4 days. For workers already on tight budgets, those extra days can trigger overdraft fees or interest that would not have been charged otherwise.
Estimating the impact: overdrafts and a potential bank windfall
Analyses published by industry outlets note that roughly 40% of Israelis operate with overdraft facilities at times. A recent report cited by Calcalist and the New Page NGO, based on April 2024 data, found that about 39% of the population — around 2.49 million customers — live in overdraft or routinely run negative balances. When payroll disruption adds 3–5 days of temporary negative balances, the result is extra interest and fees that banks collect with little additional effort. In the current cycle, industry observers estimate banks stand to gain close to 10 million shekels in such fees and accrued interest through this payroll delay alone.
What this means for everyday workers
The payroll delay highlights a friction point between holiday calendars and financial infrastructure. For workers, the practical takeaway is to anticipate possible delays around major holidays and plan accordingly. Budgeting buffers, understanding overdraft terms, and arranging automatic transfers before holidays can help mitigate the extra charges that arise when pay runs are not settled on the intended day.
Context and questions for policymakers
This situation sits at the intersection of consumer finance, regulatory oversight, and payment-system scheduling. Critics argue that a more flexible payroll settlement protocol around holidays, or dedicated exemptions for wage transfers, could reduce unnecessary overdraft reliance and the incidental revenue banks gain from schedule disruptions. Proponents say any changes must balance liquidity, bank risk, and the realities of weekend and holiday banking in a small, highly interconnected economy.
Practical tips for workers during payroll weeks near holidays
- Check your employer’s stated payroll date and verify whether an official holiday adjustment applies to your salary transfer.
- Maintain a modest buffer in your account to cover potential short-term gaps around holiday periods.
- Review overdraft terms with your bank; understand fees, interest, and any grace periods that may apply.
- Consider setting up alerts for low balances so you can act before overdraft triggers appear.
- If possible, plan automatic transfers from savings to checking ahead of holidays to minimize reliance on overdraft facilities.
Bottom line
The timing of Yom Kippur relative to September payroll creates a predictable, year-to-year incentive for overdraft-related revenue for banks when the זה”ב system shutters operations during holidays. While the numbers vary by year and by bank, the core message remains: holiday calendars can unintentionally shape consumer finance outcomes, underscoring the need for transparent policies and prudent personal budgeting as Israel’s financial and religious calendars collide.
