Congratulations! It’s always exciting to get a job offer. Before you start a job with an American company, you’ll want to take these steps to ensure that you are legally compliant and earning what you need:
Compare salaries
Once you have an offer from the US job in hand, take a look at salary survey sites and ask friends in similar positions if the salary you’re being offered is appropriate, and check what the salary would be for the same job in Israel. You’ll incur extra expenses by working for a US company, and you don’t want to lose out by making that choice.
Clarify terms
When you work in an Israeli job, you are legally entitled to a certain amount of vacation days, sick days and parental leave. If your company is more generous than the law requires, the terms will, of course, be delineated in your contract. Before you take an American job, clarify how they deal with vacation, medical issues and birth. Make sure that the terms are acceptable to you and that, if they are less generous than what you would get from an Israeli job, that the tradeoff is worthwhile.
Calculate your expenses
When you work in Israel, you have to pay taxes here, regardless of what country the salary comes from. You can do this by setting yourself up as a freelancer here in Israel or by becoming an employee of an Employer of Record service like Route 38. Before deciding which direction to go in, you need to know how much you will be paying in each scenario for:
- Income tax
- Bituach Leumi
- Pension
- Accounting fees (as a freelancer) or processing fees (through an EOR)
Once you have the numbers, you can see which scenario provides you with more take-home pay and make an informed decision.
Since these calculations are complex, we recommend speaking to an accountant who is well-versed in these issues and/or booking a consultation with us by emailing info@route38.co.il. We will honestly assess your situation and give you the best advice for your individual situation.
Get set up
Income tax, Bituach Leumi and pension are paid from the first shekel earned, so you need to set up your income structure before you begin the American job. If you have chosen to go the freelance route, you need to open files at the VAT office and Bituach Leumi. If you have an existing pension fund, you can have it transferred over to your business entity. If you prefer to start a new one or have never had one, set this up as well. Although you can do these things on your own, most people hire an accountant or tax consultant to deal with the bureaucracy.
If you choose to work with Route 38, you will have to get your employer on board and have them sign a contract with Route 38. There is no need to open files at VAT or Bituach Leumi (since we pay these and deduct them from your salary) but you do need to set up a pension fund. This can be done through our insurance agent or independently.
Start working
Now that you are legally compliant, you can start working at your US job. Find a comfortable workstation, set up your software and dive right in. Enjoy the advantages of remote work and a career that fulfills and excites you.