Social Benefits for Employees and Self-Employed
In addition to a monthly salary, employers offer their employees additional social benefits. Some of the benefits, such as pension and severance packages, are legal requirements that are calculated at a standardized salary percentage. Employers should be aware of this as it is an extra consideration during the budgeting stage of opening a business.
In 2008, changes in Israeli law stated that all employers are now obligated to contribute into a pension scheme on behalf of all their employees.
There are three main employee statuses:
1.Sachir – Regular salaried employee
2.Sachir Ba’al Shlita – An employee who has a significant stake or financial interest in the company. As there are many implications of this category, we recommend that you consult with your accountant to clarify your status.
3.Atzmai – Self-Employed
Additional social benefit packages include:
- Keren Pensia – Pension fund that can include widow’s and child’s pension.
- Bituach Menahalim – Pension scheme that can include an element of life insurance.
- Keren Hishtalmut – The only tax free short term saving plan available in Israel.
- Disability Income Insurance
Contributions to the above may vary according to your work status, age, health, smoking habits as well as predetermined company benefits. These packages can act as tax-deductible expenses for both the employer and the employee, as well as a self employed individual.
Contact us about Social Benefits for Employees and Self-Employed
Goldfus Insurance takes no responsibility for changes in Israeli legislation that may alter the accuracy of the above information. For clarification of any changes, please contact us.
