Self-employed reserve army soldiers to receive more compensation

Self-employed individuals who are called up for reserve army duty in the IDF will be getting 25% more than they did up until now. The Knesset approved this update to the law on June 27, 2017 and it will be effective from Jan 2017.

IDF soldiers in action

Tax credit point update (Kachlon law) June 2017

The Israel Tax Authority published a new directive to employers on May 28, 2017 regarding tax credit points to parents of children who are salaried employees via their payslip.
1. The number of tax credit points will now be equal for men and women. All parents are now eligible for 1.5 tax credit points in the year their child is born and 2.5 tax credit points in the years the child is age 1 to age 5.
2. This directive is effective for the tax years 2017 and 2018 only (from Jan 2019 it is cancelled, unless an extension is approved by the government).
3. Effective in June 2017 salary (to be paid by July 9, 2107), employers will credit their employees to whom this applies with the additional tax credit points, retroactive to January 2017.
For women: In the year the child is born you will receive 1.5 tax credit points (instead of 0.5 up until now) and in the years the child’s age is 1-5 you will get 2.5 tax credit points (instead of 2 up until now). You can elect to defer 1 tax credit point of the 1.5 allotted for each child to the following tax year (2018). This is done by filling out a 116 D tax form and giving it to your employer (HR or salary dept). You will need to also fill out this form in 2018 (section dalet).
Men do not have this option of deferring tax credit points.
For men: In the year the child is born you will receive 1.5 tax credit points (instead of 1 up until now). In the years the child’s age is 1-2 you will receive 2.5 tax credit points (instead of 2 up until now) and in the year the child’s age is 3 you will receive 2.5 tax credit points (instead of 1 up until now) and in the years the child’s age is 4-5 you will receive 2.5 tax credit points (instead of none up until now).
This will lower taxes on working parents salaries and raise their net pay. The tax credit points are monthly.
Employers: you need to keep this form 116 D with the employee’s 101 tax form.

July 2016 updates

Effective in July 2016’s payroll there will come into effect several changes in labor laws:
1.  Mandatory pension law

Correction 12 to this law was updated, adding 1% to employee and employer pension plan contributions in a two step update: 1/2% in July 2016 and another 1/2% in jan 2017.
The current update (July 2016) % are now Employee 5.75% and Employer 6%.
This effects all employers in Israel in all sectors by way of a comprehensive ordinance signed by the Minister of Economy. The only exceptions are if the exsisting % are higher (due to a collective agreement or personal contract) or if an employee has a Bituach Menahalim plan or pension plan with lower rates but the employer contributes to a loss of work ability insurance (IWA), whereas the joint % of the Bituach Menahalim and lWA insurance is equal to or higher than 6%. In this case, only the employee’s contribution will increase, as the employer is already contributing at the new % or more.
For comparison, here is a breakdown of pre-change and after:

 

payroll Employee contribution Employer contribution Severance pay (employer) Total
Jan 2016 5.5%    6% 6% 17.5%
Jul 2016  5.75%  6.25% 6% 18%
Jan 2017  6%  6.5%   6% 18.5%

 

2. Vacation day law
The minimum number of mandatory Annual vacation days allotted is to increase by 2 days starting July 1,2016 (In essence 1 day for 2016 as it for half a year) for the first 5 years of tenure with the same employer. Above 6 years there is no change.

tenure                                      # of days allotted

up to June 30, 2016                                                         1 – 4 years                                              14 days
5  years                                               16 days

From July 1, 2016 – Dec 31,2016                                1 -4 years                                                15 days
5 years                                                 16 days

From Jan 1, 2017                                                                1- 5 years                                               16 days

Note: The number of days listed are calendar days, not work days and as such they include the weekly rest day (Shabbat) which is not a vacation day. For example employees who worked a 5 day work week got 10 days for the first 4 years (.083 days per month * 12) and those who worked a 6 day work week got 12 days for the first 4 years (1 day per month * 12).

This is very general, there are other factors that go into what employees receive in actuality, such as full or part-time, if an employee worked at least 200 or 240 days total during the year. In any case the wording of the law is binding, even if difficult to comprehend and this article is not legal advice. In instances where a personal contract or sectorial/ collective agreement entitles employees to more vacation days than listed above, this update does not apply.

3. Minimum wage update

Effective July 1st 2016 the third step of the gradual update of the min. wage to 5,000 sh per month comes into effect. The new minimum wage starting in July 2016 will be 4,825 sh  for a full time monthly rated position.

The new minimum hourly rate is 25.94 sh

Youth min wage rates

Age % of min wage min monthly rate (40 weekly hours) Min Hourly rate
עד 16 70% 3,377.5  19.52 
עד 17 75% 3,618.75  20.92 
עד 18 83% 4004.75  23.15 
Apprentice 60% 2,895.00  16.73 

 

Updated Min. wage for youth – Apr 2015

On April 1, 2015 the minimum wage in Israel was updated. This has implications on min. wage for youth, as well.

The new rates are as follows:

Age                               Monthly Rate            Hourly Rate    

up to 16                        3,255 sh                                18.81 sh

up to 17                        3,487.50 sh                           20.15 sh

up to 18                        3,859.50 sh                          22.30 sh

18 +                               4,650 sh                               25 sh

 

There are other restrictions that apply to youth employment, such as max. number of hours pre day and per week, disallowing overtime and night work.

 

Announcing “Employee’s Rights Handbook” book launch and lectures

Book launch and lecture will be held:

In Jerusalem: on May 19th, 2015  19:00  at AACI Jerusalem, The Glassman family center Pierre Keonig st. corner of 2 Poalei Tzedek st., 4th floor (opposite Hadar mall)

In Tel-Aviv: on June 17th, 2015 16:00 at AACI Tel-Aviv, 94 A Allenby st.

 

The “Employee’s Rights Handbook”

The first comprehensive, English language guide to Israeli payroll.
Whether  you are an employer or an employee, a new oleh or an English speaker who has trouble with the Hebrew terms, this publication is for you!

 

Employees:

Understand the terminology, layout and Hebrew on your payslip

Know your rights

Understand the labor laws

What needs to be itemized on the payslip?

What are the things you need to know upon termination?

How many vacation days are you entitled to?

Is Purim a paid holiday?

What are the rights of a pregnant employee?

 

Employers:

Do your payslips comply with all the new regulations?

Do you issue employees “notification of terms of employment” as required?

Are employees given a fair hearing prior to termination?

Understand what obligatory payments exist in Israel

What is allowed to be deducted from an employee’s salary

Are you aware of penalties for infringement on regulations and labor laws? (avoid this by knowing what needs to be done)

 

In this guide you will find:
* An overview of labor laws, regulations, expanded regulation orders, collective
agreements and statutes

* The make-up of the Israeli payslip

* Social Security

* Health Insurance
* Income tax

* Holiday pay, sick day payment, vacation, overtime payment, bereavement leave,
maternity leave

* Minimum wage

* Youth employment
* Advance notice                       And much more!

 

A must for employers and employees alike. Get your copy today! This 107 page publication in hard-copy is not available in stores, on-line orders:

 

http://www.israpay.com/announcing-the-release-date-for-employees-rights-handbook/

Announcing the release date for Employee’s Rights Handbook !!!!

Finally, the long awaited Employee’s Rights Book is to be released in Hard copy. The release date is Sunday March 15, 2015

At present, this is the only format. There may be a PDF purchase option at a later date.

The book is 107 pages of vital information for employers, employees and anyone interested in Employee’s rights, labor laws and the makeup of payroll in Israel.

Announcing the first and only English language guide in simple easy to understand language !!!

The Book also contains a dictionary of common Hebrew payroll terms and their English translation, examples of payroll forms, useful contact information, tips and more.

Get your copy today,  and know your rights !

price: 100 sh (including mailing). Optional self-pickup in Jerusalem (85 sh).
Payment via credit card or paypal, use this link:

<a href=”http://www.vcita.com/v/israpay/make_payment?pay_for=Employee’s%20Rights%20Handbook&amount=100″ target=”blank”>pay</a>

or follow the schedule an appointment on the left hand side of the home page of this site.
If you encounter a scheduling error notice, send the following details:
(Name, mailing address, email address, phone/cell number. If you wish that the invoice be made out to a different name than the one you supplied, please state)
to moshe.israpay@gmail.com and An invoice will be emailed to you. When you open the invoice you will have the ability to pay.

Check payments option:  send a check made payable to Moshe Egel-Tal along with the above info to

Israpay
P.O. Box 44429
Jerusalem 9144302

 

 

 

 

Change in Bituach Leumi law 1.1.2015

Correction 159 of the Bituach Leumi law goes into effect on January 1, 2015.

According to this correction, Bituach Leumi will no longer be able to demand payment of Bituach Leumi (social security) and Bituach Briut (health insurance) if more than 7 years have passed since their first demand of payment. After this period, the Bituach money shall not be collected, nor shall it have any effect on any rights to a stipend or benefit, if the following two conditions have been met:

1. No additional demand of payment notification was sent during the period of 7 years since the first notice.

2. Said notification in #1 above was sent, however no collection procedures or offsetting of the due amount from stipends or benefits paid were taken.

There are specifics reagrding payments due on January 1, 2015 that a period of 7 years has not elapsed yet, and with certain payments due that allows Bituach Leumi to collect up to June 30, 2016 if 16 years have not yet passed.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014 income grant (negative tax)

The updated criteria for the 2014 income grant, otherwise know as negative tax, is a s follows:

1. Filing a request in the post office by 30.09.2015
You will need your Israeli ID card (Teudat Zehut) and a cancelled check (for proof of bank account info)
Requests must be filled out individually, you cannot fill one out for anyone else, not even your spouse.
2. You need to be at least age 23 with children or age 55 or more, even without children.
3. Average monthly income of more than 2,070 sh and less than 6,157 sh (or if you have 3 or more children 6,766 sh)
4. During 2014 you did not have (other than an apt/home where you live) the right of more than 50% to any other property in Israel or elsewhere.
This includes: apartments, houses, stores, etc.
5. If you are self-employed you have to file your 2014 taxes. If you are a salaried employee, your employer will have to file the 126 tax report for 2014 before your
eligibility can be determined. The Tax Authority will send you a notification via the mail. Make sure your address is updated in your ID card.

All the information is available on the income grant website: http://www.mahanak.org.il

This is not income tax, but the handling of the applications is currently done by the Tax authority.

Moshe Egel-Tal, CSPP
CEO and Founder Israpay “making payroll simplified”

www.israpay.com
054-4992705
moshe.israpay@gmail.com

Read my blogs on www.israpay.com and http://jobshuk.com/motal7/blog
as well as my guest blog on www.jobmob.co.il

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self employed v.a.t. exemption ceiling for 2015

The Israel Tax Authority has announced that the ceiling for exempt income from v.a.t. for self employed individuals who are registered as osek patur in 2015 will remain 79,482 sh.

If you go over the ceiling at any point during the year on your accumulated annual income, you should contact you C.P.A. or tax advisor immediately.

Employer’s Social Security contributions to rise from January 2015

The employer’s contribution towards Social Security (Bituach Leumi), on the higher bracket, has been raised from 6.75% (Dec 2014) to 7.25%, for employees age 18 to retirement age, starting in January 2015.

A raise of 0.5%.

The employee’s contribution remains without change.

Minimum wage to increase

The minimum wage in Israel  (currently at 4,300 sh per month or 23.12 sh per hour) is being updated in three stages, according to an agreement signed by the General worker’s union (Histadrut klalit) and the Presidency of the Business Organizations in Israel. This will be voted into the book of labor laws by the knesset soon.

The changes are:

per month per hour
From 4/2015 – 4,650 sh 25 sh

From 8/2016 – 4,825 sh 25.94 sh

From 1/2017 – 5,000 sh 26.88 sh

From 4/2017 onwards – 52% of the average salary (but no less than 5,000 sh) to be updated quarterly (Jan, Apr, Jul, Oct) of each year.

bankrupt cartoon

New tax Brackets for 2015

The new tax brackets for 2015

Bracket                      Gross pay               Accumulated tax
Ceiling for 10%          5,270                               527
Ceiling for 14%          9,000                            1,049
Ceiling for 21%         13,990                           2,097
Ceiling for 31%         19,980                           3,954
Ceiling for 34%         41,790                         11,369
Ceiling for 48%         67,560                         23,739
Every additional shekel 50%