Maternity leave and maternity pay are a basic right in Israel, whether you are an employee or a business owner. While on paid maternity leave, you are not allowed to work.
But wait… What will happen to your business if you abandon it entirely for months? The law does allow a woman on maternity leave to maintain her business if she gets special permission from Bituach Leumi. Unfortunately, there is no uniform definition of maintenance as opposed to work and each case is judged on its own merit.
If you’re worried that your clients and customers will start working with your competition during your maternity leave and choose to stay with them even afterwards, consider hiring a replacement or outsourcing the work so that your clients get what they need from your business without your involvement.
Are you eligible for maternity pay?
If you have paid into Bituach Leumi for 10 out of the 14 months prior to your maternity leave, or 15 out of the previous 22 months, you are entitled to maternity pay for 15 weeks. If you have paid Bituach Leumi for 6 months of the past 14, you are eligible for 8 weeks of maternity pay.
Before you give birth, check whether you owe money to Bituach Leumi. If so, you will want to pay those debts so that your right to maternity pay isn’t curtailed.
How is maternity pay calculated?
Because entrepreneurs tend not to have steady income, maternity pay is calculated in two phases. In phase one, your income is determined based on the assessment from the previous year or your estimated assessment for this year, whichever amount is higher. Remember that your total income is calculated based on what you bring in and what your expenses are. If you have a lot of expenses, maternity pay will be a lot lower than you might be expecting.
At the end of the year, when all income for the year is reported, the amount of maternity pay is adjusted, sometimes to your benefit and sometimes to your detriment. If you think that your income will decrease significantly over the course of the year, it’s recommended to keep some money on the side so you can pay back what you will end up owing the government for overpaying you during maternity leave.