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 deductable 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.