salary

e-Book: 2013 Tax Benefits for Salaried Employees in Israel

Moshe


Finally released via Amazon kindle – The 2013 updated version of the Tax Benefits for Salaried Employees in Israel, in English !

Just in time for the end of the tax year, find out if you have correctly utilized all the tax benefits you are entitled to, as a salaried employee.

If your employer failed to credit you or you were not aware of certain tax benefits that you qualify for, no worries !

Taxes are configured annually, so if you update your employer before December’s payroll is processed you will be credited retroactively to January 2013.

And if you weren’t able to update your employer’s payroll dept by Dec’s payroll, just file for a tax rebate.

Get your copy today !

 

Severance Pay – a minor detail you should be aware of

Moshe

Everyone knows that when an employee is terminated and he has worked for at least one year for the employer, he is eligible for severance pay. Most employees also know that severance pay is one month’s pay (according to the last full salary) multiplied by his tenure. Or in layman’s terms, one month’s pay for each full year worked and prorated for any portions of a year.

The “minor” detail that everyone should be aware of is the question of what actually is the “last full salary” ?

Well, it really depends on how you are employed. The simple case is that of an employee who receives a monthly based salary, then the above would apply.

However, there are other types of salaries: Hourly based, Daily based, job based.

Many unique scenarios can also have an effect on what the “last month’s pay” actually is and thus effecting how severance pay is calculated.

For instance, an employee who worked full-time and changed to part time at some point (or vis-versa), an employee whose pay was reduced, an employee that had a temporary change in his last salary, an employee whose type of employment changed in essence, an employee whose position changed in essence or an employee who receives a base pay and changing commissions.

The Labor laws all specifically address these scenarios by dividing up the salary into several parts, before and after the change and a separate calculation is done for each part accordingly.

Those who receive changing salaries due to hourly or daily rates that change each month due to the number of hours/days worked or due to commissions – an average of the last 12 salaries is used as a basis for severance pay calculation.

 

Aug 25th – mini-seminar: understanding your payslip and employee’s rights

Moshe
This unique mini-seminar, in English, is meant for salaried employees who want to know how to read their payslip and understand it.
It is also geared towards employers who want to better understand their legal obligations regarding payslips and the implications of failing to do so.
Don’t miss out on this amazing opportunity to learn from a senior payroll professional with over 20 years experience in all facets of Israeli payroll and labor laws.
DATE: Sunday  August 25, 2013
Time: 09:30 – 11:30
Venue:  JBC
             24 Hillel st. 5th floor
             Jerusalem
Speaker: Moshe Egel-Tal, CSPP
               CEO & Founder ISRAPAY “making payroll simple”
Price: 120 sh
Limited space available – register today !
Don’t miss this great opportunity to learn how to read and understand your payslip
Send your name and contact info to moshe.israpay@gmail.com

Employer who single-sidedly reduced employee’s salary was forced to pay severance pay

Moshe

The employee worked for a gardening company. Upon recieving his last payslip, he discovered that his daily rate had been reduced substantially !

He contacted the employer, demanding that his daily rate be restored to what it was previously, as no-one notified him of any change and he also did not agree to any such change.

The employer refused on several request attempts by the employee, stating that it was a simple “computer mistake” but the bottom line is the same. As a result the employee resigned his position and sued the employer in labor court, demanding his daily rate be restored, as well as severance pay and social benefits from the full rate and not partial from the new, reduced rate, as the employer calculated.

The employer countered, in his response to the court, that the employee resigned his position and as such is not entitled to severance pay. In addition, the employer requested that the employee pay him for failure to give 30 days advance notice.

The court ruled that relevance of section 11a of the severance pay law, which enables an employee to resign his position and still be eligible for severance pay, is upon the employee.

Basically, the employee was able to prove that the employer single-sidedly reduced his wages, by submitting photocopies of his payslips to the court as evidence.

Reducing salary is considered a “worsening of work conditions” that an employee is not expected to continue working under.

The employer stated to the court that after amendment 24 to the “protection of salary” law in 2008, the employer was instructed by his bookkeepers and legal advisors to itemize all payments on the payslips, instead of the one line – “salary” which was used up until then. The employer “fixed” this by lowering the salary rate and adding other mandatory items seperately, such as travel expense and Havra’a. The court ruled that these other items should have been added in addition to the existing pay and not all inclusive, since the item listed was only salary.

The court awarded the employee full severance pay and the employer was instructed to pay the employee the remainder of his salary (restore the original rate) and the social benefits from the full amount, as well as back pay (from his start of employment) for travel and Havra’a.

It pays for employers to configure payslips properly, according to the law, and avoid such scenarios.

Minimum wage update – April 2013

Moshe

Effective from April 2013’s payroll the minimum wages will be updated as follows:

Monthly rated employees

Apprentices 2,580.-
up to age 16 3,010.-
from age 16 to age 17 3,225.-
from age 17 to age 18 3,569.-
age 18 and up 4,300.-

Daily rated employees

  5 day work-week  6 day work-week
Apprentices

119.08

103.20
up to age 16

138.92

120.40
from age 16 to age  17

148.85

129.-
from age 17 to age 18

164.72

142.76
age 18 and up

198.46

172.-

Hourly rated employees

Apprentices 14.91
up to age 16 17.40
from age 16 to age 17 18.64
from age 17 to age 18 20.63
age 18 and up 23.12

These rates are mandatory for all employees in Israel, regardless of sector (public and private), industry, vocation or tenure.
Employers who pay less than the above minimum wages risks penalty (stiff fines and even imprisonment) and prosecution in Labor court, by the Ministry of Industry, Trade and Labor, as a criminal felony  for violation of Labor laws.

 

Working hours on Israel’s Memorial Day & Independence Day

Moshe

Memorial Day of Israel’s Fallen soldiers is Monday April 15th, 2013

According to the fallen soldiers law (1963), any employee who is one of the following:
*  parent
*  grandparent
*  spouse
* child
* sibling

of a fallen soldier, is eligible to be absent from work on this day without liability of deduction from pay.

 

Independence Day (Yom Ha’atzmaut)

Israel’s 65 birthday is Tuesday April 16th, 2013

According to the Independence Day law (1959), This is a paid national holiday. This applies to all employers in Israel.

The day prior to Independence Day (Memorial Day or Erev Yom Ha’atzmaut) is a shortened work day, by law.
Employees who work an 8 hour workday, need work only 7 hours.
Employees who work a 9 hour workday, need work only 8 hours.
Places of employment that have a collective or personal agreement, or custom which is more favorable to the employee than the law, these would take precedence.
There is no deduction for missing hours for this day.

To be paid for Independence Day, you need to have at least 3 month’s tenure with your employer and you need to work the day before and the day after Independence day.

Employers that are not included in the list of places that need to operate on a holiday which is published by the Prime Minister’s Office are not allowed to force their employees to work on Independence Day as publicized by the Israeli Labor Court.

Employees who work for an employer who is included in the list, are entitled to 200% for all hours worked from 24:00 (midnight) on Memorial Day until 24:00 on Independence Day.
Payment for Independence Day needs to be itemized separately on the payslip.

 

 

Tax Authority adds more hours in the afternoon to customer service

Moshe

The Israeli Tax Authority released a memorandum to the public on March 10th, 2013 regarding the hours in the afternoon/evening that the tax reconciliation department is open to the public. The memorandum can be found in Hebrew on the Tax Authority’s website: www.taxes.gov.il

In an effort to better serve the public in a more efficient manner, The Tax offices in Jerusalem 3, Tel-Aviv 5, Be’er Sheva and Haifa will be open on Sundays from 3 p.m. until 6 p.m. on a trial basis up until (and including) April 14th, 2013.
After which it will be determined whether to continue this service and to what extent.

The service is meant for anyone who wishes to procure a new tax reconciliation for more than one employer for 2013 and those who wish to file for a tax rebate for previous years.

 

 

 

New Tax brackets for 2013

Moshe

2013 Tax Brackets


The value of each tax credit point has been updated to 218 sh.

These changes are effective from Jan 1, 2013 (January 2013 salary).

 

Tax Bracket

Gross pay

Tax

10%

5,280

528

14%

9,010

1,050

21%

14,000

2,098

31%

20,000

3,958

34%

41,830

11,380

48%

Each additional sh

 

 

Garnished wages – updated Jan 2013

Moshe

As of Jan 1st, 2013 the amounts exempt from  garnished wages have been updated as follows:

single – 2,122 sh

widower/divorced/single parent + 1 child – 3,432 sh

widower/divorced/single parent + 2 or more children – 4,281 sh

couple – 3,183 sh

couple + 1 child – 3,692 sh

couple + 2 or more children – 4,201 sh

 

Notes:

1) The above amounts do not apply to garnished wages for alimony.

2) Should the above amounts be more than 80% of the monthly salary (after deductions for income tax and social security and health tax) the amount exempt shall be reduced to 80% of the actual monthly salary.

 

source: protection of salary law, 1958 update 2013

 

Youth employee ? Download new application to know your rights !

Moshe

The Ministry of Industry, Trade and Labor has launched an application that can be downloaded for free to an Iphone and will soon be available for smartphones too. If you are between the ages of 14-18 and employed or if you have children or grandchildren who are, this is for them !

What will this enable users to do ?
1. Know your rights and the employer’s lawful responsibilities towards youth
they employ.

2. Enable youth to keep track of their hours in an organized manner.

3. Salary calculator to figure out what you are owed.

4. Contact details for complaints to the Ministry’s labor law enforcement dept.
if they feel their employer is not obeying the laws.

5. Enable users to define a goal to save for, and enable them to track how many
more hours of work they need to reach their goal.

 

For now this application is available only in Hebrew.

It is downloadable from the Ministry’s website, here:

http://www.moital.gov.il/NR/exeres/46273C9D-B2FF-4DB3-A4ED-8D80E5BAC62F,frameless.htm

Company officers and executives can be prosecuted !

Moshe

If you are a company executive or officer and your job entails employing workers  this post is for you,

It is your responsibility to be updated, to know and be familiar with the latest laws, regulations and court verdicts in this field.

You must control, oversee and issue directives in order to notify the company where you are employed that they are acting legally or not.

New regulations will be coming into effect on June 19th 2012 which call for closer control and inspection by the Ministry of Trade, Industry and Employment for violations of mandatory labor laws in Israel.

Violators will be prosecuted, including company officers or executives, personally ! This is a criminal offense and can be punished with administrative fines of up to 35,000 shekels for each offense or even jail time.

It is your duty to do everything in your power to make sure that the law is adhered to. Do not play around with employee’s rights, it is not worth the risk of the good name of your company.

The Ministry has allocated a special tab on the menu of their website where they will publish the names of all employers who have violated the law !

Potential employees who are searching for a job can check this site to see if the employer is listed – they might get an indication whether they want to work for such an employer or not.

 

 

 

 

 

Tightening of Enforcement of Labor laws

Moshe

Effective on June 19,2012 The Administration of Enforcement & Regulation in the Ministry of Trade, Industry and Labor will be stepping up their efforts to enforce labor laws by spot checking employers. Any discrepancy can lead to fines of thousands of shekels for each offense and for each employee. In addition, CEO’s will be held personally responsible for failure to implement the laws. The fine issued to a CEO cannot be paid for by or refunded by the company and in extreme cases can result in criminal charges and even possible jail sentence. The only way a CEO can legally fight the fines and charges in a court are if he has proof of existing policies and procedures and that he has done all in his power to enforce the labor laws.
For example, a company who hires a manpower agency to provide cleaning workers or guards, can be held responsible if the manpower agency doesn’t pay them minimum wage, overtime, allow them to sit or take a break, are tardy in paying. The company needs to check the manpower agency’s calculations and payslips to ensure they pertain to the labor laws.

All employees need to have time-sheets, they can be an actual swipe card electronic clock, a computerized program, via a cash register or an internet time-sheet. It must have start and end times for each day worked and be able to track absences and overtime. The only exception are employees who work outside, on the road, etc in which case the pay slip needs to say “hours not able to be tracked”