Insurances

Social Benefits for Employees and Self-Employed

There are three main employment 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. Atzma’i – 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.

Since 2008, all employers are obligated to contribute into a pension scheme on behalf of all their employees.

Since 2017, self-employed people between 21-60 years old are likewise obligated to contribute to a pension.

Social benefit packages for both employed and self employed can 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.
Kupat Gemel – Pension plan with no insurances.

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.