If you are employed currently by two employers you may be paying too much social security (Bituach Leumi) and health tax (Bituach Briut) from your secondary place of employment.
First, it’s important to understand that for each place of employment you will need to pay Bituach leumi and Bituach Briut.
There are two rates for each. The first rate is substantially lower, see below. The ceiling for the lower rates is 4,809 shekels.
The rates are as follows:
lower rate higher rate
Bituach Leumi: 0.40 % 7.0 %
Bituach Briut: 3.10 % 5.0 %
If at your main place of employment, your gross pay is less than 4,809 shekels, the secondary employer is allowed to deduct from the lower rates for the difference between the ceiling (4,809) and your gross income from the main employer.
Example: you earn 3,000 shekels gross at your main place of employment and an additional 2,000 shekels at your secondary place of employment.
The main employer will deduct from the lower rates automatically acording to your annual statement on your 101 form (that this is your main place of employment). The secondary employer can deduct from the lower rates for the first 1,809 shekels.
In the past anyone who worked at more than one place of employment had to go into their local Bituach Leumi office to coordinate their rates. This involved taking time off from work and bringing the last payslip from all places of employment and Bituach Leumi would issue the employee a letter to the additional employer(s) telling them how to deduct Bituach Leumi and Bituach Briut.
Starting in 2010, Bituach Leumi allows the secondary employer to do the math based on the employee’s signed statement on the 644 form. You will need to fill out and sign this form every year along with the 101 tax form and submit it to your additional employer.
The Bituach Leumi 644 form can be downloaded here: http://www.btl.gov.il/טפסים%20ואישורים/forms/Employers_forms/Pages/BL644.aspx
Note: If you are employed by more than 2 employers simultaneously, then the above does not apply to you – you will need to go in to your local Bituach Leumi office and do a coordination (teum dmei bituach)
Moshe Egel-Tal, CSPP
Founder and CEO, Israpay "making payroll simple"
Site: http://www.israpay.com
Email: mo***********@***il.com
Skype: motal7
Snail Mail: p.o. box 44429 Jerusalem, Israel 91443
Follow me on social networks: Facebook, xing, twitter, Plaxo, FriendFeed, LinkedIn, Digg, Tagfoot, Myspace Username: Israpay