Due to a recent law passed in the Knesset, there will be a huge upgrade in the awareness of Elderly people as to their rights. Many of them are unaware what their rights are. In order to combat unawareness the government has made it mandatory for Govt. offices and agencies to notify elderly citizens on their rights and ensure the budget that was approved for this is actually used for it too !
Now taking orders – salaried employee’s tax exemption and deductions booklet
If you are a salaried employee, you should know what tax deductions you are eligible for and how to get them. On sale now – for the small price of 50 sh
send an email to mo***********@***il.com
Social Security reconciliation
How is Social security configured ?
Social Security and Health tax are mandatory deductions from gross pay. In addition to the employee’s contribution there is also an employer’s contribution. They are configured at two rates: a lower rate for gross pay up to 60% of the average salary (currently 5,171 sh – July 2012). The lower Rate is 0.4 %, while the higher rate is a whopping 7% !
So, if your gross income is less than 5,171 sh (current for July 2012), it is in your best interest to do a Social Security reconciliation.
What is a Social Security reconciliation ?
This is basically a way to notify your secondary employer of the non-utilized balance of the lower rate ceiling and therefore enable you to utilize this with the secondary employer and therefore pay less.
In the past, the secondary employer would send employees who stated on their 101 tax form that this is a secondary place of employment, to the local Social Security office to do a reconciliation. starting in Jan 2012, Social Security approved secondary employers to use a signed statement on a BL/644 form.
Who is eligible for a Social Security reconciliation ?
- A salaried employee who works for 2 or more employers
- A recipient of a pension who also works for at least one employer
- A recipient of a pension from 2 or more sources
And under the condition that the income from the main employer or main pension is lower than 60% of the average wage (5,171 sh – July 2012)
Note: Employees or recipients of pension whose income from their main employer or pension whose gross pay is higher than 60% of the average wage, have already utilized in full the lower rate and therefore do not need to do a Social Security reconciliation.
Note 2: You need to apply to Social Security for written authorization:
- If you have gross income at the Social security ceiling (41,850 sh) or more
- You receive a pension or salary from 3 or more sources.
I had applied for mine by finding the closest social security office to me, but you can even do the entire process online without physically having to visit the administration office and get your social security card right at home.
So, what do I need to do ?
- Fill out a bl/644 form and give it to your secondary employer, at the start of employment and each new tax year along with your 101 tax form. or
- You can fill out the form on-line on Social Security’s website http://www.btl.gov.il/Insurance/Teum/HafakatHishur/Pages/default.aspx and procure a letter for your secondary employer.
If you didn’t do a reconciliation in previous years, this can be done retroactively along with a rebate request via the internet site only.
If a salaried employee works simultaneously at more than one place of employment, as a default, the secondary employers will configure the Social Security and Health tax from the higher rate.
The Pension Test
If you want to retire with a “normal” amount of pension, you need to be sure you are utilizing to the maximum the options available to you.
In order to do this you must first understand the makeup of pension plans, because you might very well be on your way of stepping into a mis sold sipp. There are basically three groups of pension plans for salaried employees:
1. Those who are insured via the mandatory pension plan law (the rates effective in 2011 are 3.33% from each the employee and the employer and an additional 3.34% from the employer for severance pay). These rates will be updated anually over the next few years until they max out at 5.5% each employee and employer plus an additional 6.5% severance pay (employer).
2. Those who are insured in older pension plans before the madatory pension plan came into effect. These employees for the most part have a 5% both employee and employer contributions and 8.33% severance pay (employer).
3. Public sector employees have totally different plans, usually with far favorable terms than are available via the private sector. This is due to heavy involvement by worker’s unions and are embedded in contractual collective agreements signed by the ministry of finance. we’ll not be discussing this group here at all.
Of the first two groups, in the private sector, there can be many itemized portions of your gross pay that are not taken into account for pension purposes. This is because that in most instances the pension is configured from the base salary only. So, if you receive overtime pay, travel expenses or anything else for that matter other than your base pay, you should read on. All you need to do is look at the informative information which shows up on your payslip. Look for “bruto pensiya” (gross pay for pension purposes). This amount will tell you from what gross amount your pension is configured. If this amount is equal to your total gross pay for the month, you’re good. If this amount is lower than your monthly gross pay, you can raise your contribution to a max of 7% privately. If you do this at a relatively young age it will be very significant towards your future income from your pension when you retire. You will need to contact your employer’s insurance agent who handles the policies or the pension fund.
Moshe Egel-Tal, CSPP
Israpay “making payroll simple”
www.israpay.com
mo***********@***il.com
New mandatory area tax
As expected the new area tax goes into effect today, March 20th, 2011. This new tax effects all workers in Israel. In fact it has been kept so secret, that you probably haven’t heard anything about it on the news. No wonder ! Read on and you’ll soon know why.
Looking around at all the rebellions in the neighboring countries in the middle east, Israel’s leaders became paranoid that Israel may be next. Since these leaders will do anything to stay in power, they have devised a secret plan whereby they intend to add further insult to an economy that already has the highest tax rate in the world.
The system is simple: If you work, you have money. The governemtn does not. Therefore you need to support the government financially. For each day you work you will be taxed an hour’s pay. This is regardless of the amount you make per hour, or what day of the week it is earned. It is in addition to your taxes and social security deductions. No one is entitled to a reduction or exemption. The law is effective immediately.
I shall therefore suggest this be called the purim tax !
Yes, this is totally a Purim joke and has no true significance to anything (although I am not 100% sure that the government won’t try this)
Happy Purim !
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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
Job searches and employment agencies in Israel
So, you got terminated from your last job recently or you decided to find a job or did you just want to work from home. What do you do first ?
Well, you should always keep your CV updated, for starters.
Secondly, you can scan the want ads in the papers, but there is a better way. With today’s technology you can scan job search sites for potential positions, there are many characteristics to choose from when doing a search, such as: Full-time/part time, student jobs, location, sector, profession and more.
Some sites are better than others, some are paid sites only: they’ll let you sign up for free, but you can’t do anything with the results of your search (no employer info and can’t send your CV)
The best sites I have used are:
www.jobnet.co.il (totally free, nice outlay and you can send your CV directly via the site)
www.alljobs.co.il (set up an account is free, a paid membership of 44 shekels per month will allow you to access ads that are exclusive to the site. you upload your cv and what you are looking for. This is by far the most comprhensive site. It includes all ads that appear in all papers (I actually checked it out) Worth the investment in my opinion.
www.jobmaster.co.il (the site is free for employees only. employers need to pay. This theory actually makes more sense. nice site. The downside is it’s mostly employment agency ads.
All three allow you to get email notifications on new positions based on the criteria you setup in your profile. This is a big plus as you will avoid having to buy a paper which may or may not have relevant ads for you.
The minus of most of these sites is that employment agencies hound them with tens if not hundreds of ads, that may be just luring CV’s into their system without offering any real jobs to the applicant. I speak from vast experience in this and not from hearsay or assumptions.
Do not misunderstand me, occasionally you can find a job via an employment agency, especially if it’s a fill-in, temporary position for someone on maternity leave. Placement agencies are a bit better, usually have actual jobs to offer too. The problem is many agencies do both placement and as an employer for employers who do not want the hassle of dealing with benefits and costs, need to fill a temp position or a public sector employer who needs immediate help, thus evading the mandatory auction law for all public sector positions, at least for awhile. The employment agency is bound by law and cannot hire you for a period of more than 9 months.
There are two scenarios that play out when you send your CV to an employment agency. Usually, depending of course on the company, you will get zero response. This although you may see the ad again and again, week after week, and you meet all the professional criteria posted in the ad. So why don’t they call me, you ask. Excellent question ! The real reason is that the position is a farse. The company doesn’t have anything to offer in your field and they post ads at a frenzy just to collect CV’s. Do not be amazed, this is fact for at least a half a dozen employment agencies. Some will call you within a short time of receiving your CV. Do not get your hopes up too high, because this is very preliminary. You haven’t reached the employer yet. To do this you will need to come in for an interview at the employment agency. This will usually be done by a 20-something year old, fresh out of the army girl who has no knowledge whatsoever about your mprofessiona nd cannot answer any questions you have about the position (except what she was told by the employer – if there is one). It is usually a waste of time. You will never hear from them again. Even if you apply for another position at a later date, they will want to interview you again in person. These I would stay clear of.
So, what’s the bottom line ? Do you send your CV out to employment agencies or not ? Yes, but keep a list of the position you applied for, the agency’s name and the date you sent the CV. And most importantly keep your expectations low, so as not to be disappointed.
The other common thing that happens with those agencies that do call you, is they ask you first question what your salary expectations are. This is totally stupid as you can only truly answer this if you know what the poistion’s responsibilities are, what programs you will be working with, whether you will be in a managerial position or not and what benfits they offer. For example, if you were offerred a company car you might be willing to accept less pay. But be forewarned ! Do not go there – Do not play this riddiculous game ! If you are serious about the “position” tell them you are open to all offers and you cannot answer the question without more information which you can only receive froim the actual employer. See, if you were to name a price – if it’s higher than what the employer set as his budget, you are automatically disqualified, even though you may be the most qualified. If you go too low, you’re selling yourself cheap and losing out. Employers need to make an offer to you and not the other way around. After you get an offer you can try to negotiate a bit. I have had employment agencies accept this and not press it. Sometimes they will go on and tell me what the employer is offering, which if it is not extremely less than what you want, agree and when you get to an interview with the employer you can try to get more when they bring up the subject of pay.
Several years ago I was offered a position by a placement agency and they told me a flatout rate that the employer was offering and asked if it was acceptable to me (it wasn’t) and they mentioned that this was the final offer and there will be no negotiations with the employer on this subject. Well, guess what ? I not only impressed in the interview, but I was signed to a contract for more than double the amount I was told by the agency.
a friend of mine who was looking for work, expected American standards from potential employers, including employment agencies. He refuses to this day to go into employment agencies for interviews or do psycological testing at places like Pilat or Adam-milo. He says “don’t torture me or harrass me. you have a position to offer, here’s my CV. I will provide you with references. Make me an offer.” He has a point.
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
All about clothing stipends
The clothing stipend, or dmei bigud in Hebrew is not a labor law, and thus not all employers are liable to pay it. There are several ways in which an employer can pay the clothing stipend:
1) In the public sector (government, municipalities, police, career army, etc) it is paid as an annual payment via the payslip. In 2010, for example, the amount was 1,961 shekels for a full-time position.The amount is added to the gross pay, usually in July. And the amount is updated each year to compensate for the rise in the consumer index.
2) There are certain sectors of industry that need special work clothes. These need to be provided by the employer as long as employer-employee relations exist. The employer can provide the employee with the clothes or a voucher to purchase them. The industries that need to provide clothing were incorporated into a collective agreement signed by the minister of labor, making it mandatory in those sectors.
In short, it is a very nice perk, one of many social benefits that most employees in Israel do not receive, unless they work in the public sector or in an industry covered by the collective agreement.
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
Are you familiar with section 12 A of the labor law ?
There is a trend among employers, especially in Public sector jobs where there is a mandatory tender for every position. This lengthy beaurocratic process can take months. Especially if the employer hasn’t put the proposed position into the annual budget. In years past, there were employees who worked for years via employment agencies in the same place of work. Sometimes these employees would be transfered from one agency to another, thus losing valuable tenure. 
The “Employment of employees via employment agencies” law which was passed by the knesset in 1996 helped rectify this situation somewhat (find labor posters here explaining this). The law specifies explicitly that an employee can be employed via an employment agency for a maximum period of 9 months. After this period, The employer either hires the employee directly or ends his employment. Extending the 9 month period is no longer an option, nor is transfering the employee to another employment agency. The 9 month period is a mutual period of trial where both the employer and the employee check each other out and decide whether they want to continue employment with each other. If the employer was negligent and didn’t notify the employee of his intentions on time, The law specifies that “an employee who worked for more than 9 months via an employment agency will then automatically be considered the actual employer’s employee”. The tenure that an employee worked for an employer via the employment agency is recognized as tenure for all purposes with the employer, as the place of employment hasn’t changed. The employment agency must conduct a hearing with the employee as to intent of continuation of employment directly via the employer or release of the employee. This needs to be done within the 9 month period and also subject to the advance notice law. 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
iPOST – the new personal e-mailbox
The Israeli Postal Authority has introduced a new service which allows a registered user to receive secure email, such as bills from the Electric company, water, cell phone and more and at the same time preserve the environment by using less printed bills and also ensuring quick and reliable immediate delivery, No more bills getting lost in snail mail. Also, you can print them or save them to your computer if you need to, you can archive them for later reference and you can even pay them directly on-line with a credit card.
The registration is free and they even have an English site !
Check it out !
https://www.ipost.co.il/login.aspx
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
A new site launched ! everything you wanted to know about negative tax stipends
If you are a salaried employee and make less than 6,200 shekels (gross) you are probably eligible for the negative tax stipend.
Up until this year, the stipend was gradually worked in, first available only to certain area residents, but starting in 2011 it will be available to residents of all of Israel.
To help citizens, the Tax Authority has launched a new site http://www.mahanak.org.il/index.html (unfortunately it is only in Hebrew)
But there is something fishy about the name they chose for the site, MAHNAK means "choking" ! Is this a warped sense of humor or a russian-born employee’s bad use of Henglish ?
Wishing everyone a Chodesh Tov !
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