Categories
Employment in Israel

I’ve Been Offered a US Job – Now What?

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.  

Categories
Employment in Israel

6 Ways Making Aliyah Can Benefit Your Career

One of the biggest questions that potential olim have is what will happen to their careers once they make aliyah. This is especially acute for people who have established and successful careers in their home countries and are fearful that they will have to take a step down when they move to Israel. Although this may sometimes be true, there are also olim whose careers have advanced and/or who enjoy their current work situation much more than the one they had before aliyah. Here are some ways that aliyah can benefit your career.

Expertise that’s not common in Israel 

If your expertise is less common in Israel, you may be in high demand in the Israeli job market. If you are well-established and experienced in your field, it’s likely that you have skills that are valuable to Israeli companies. A CV which emphasizes these skills and demonstrates your expertise can help catapult your career to new levels.

For instance, according to Nefesh B’Nefesh, physicians with specialties such as family medicine, pediatrics, female gynecologists, geriatrics, radiology, internal medicine, nuclear medicine, anesthesiology, neonatology, nephrology, neurology, pathology, and surgery are in high demand in Israel.

English-speakers are in high demand

Native English is a skill that opens many doors in the Israeli job market. In addition to teaching English and content writing, many other jobs are available to English speakers. These include careers in marketing, project management, customer relations, sales, grant writing and fundraising. 

Any company with international clients or a nonprofit with overseas donors needs English speakers to interact with them. The ability to send well-written emails, run meetings and present in English is a sought-after skill that will make you more attractive to potential employers.

Change of career 

A move to Israel is often an opportunity to switch careers and reinvent yourself. If you’re not happy with your current career path or your job doesn’t easily translate to the Israeli market, aliyah is a good time to make a change. 

Israeli society is less classist in general and certainly when it comes to careers, so there is a large variety of professions that you may not have considered before aliyah. And if you have a passion you haven’t yet explored, think about opening a business and becoming your own boss.

Vacation days that are aligned with Jewish holidays

One of the challenges that Jews living outside Israel face is that most of their vacation days are used up for Jewish holidays and they have to explain to incredulous bosses why they have to take off so many days for the various chagim. In Israel, Jewish holidays are automatic vacation days. You don’t have to make up those hours, use up your vacation days or beg your boss’ indulgence in order to celebrate. 

There are, of course, some jobs that require working on Shabbat and holidays, such as those that involve national security. But the vast majority of jobs are aligned with Jewish holidays, making for a smoother career path and a better work/life balance.

Protection for pregnancy and parental leave

Israeli law protects pregnant mothers and provides for maternity and paternity leave when a baby is born. It also protects parents from losing their jobs because they took parental leave. They cannot be fired within 60 days of returning to work, except under special circumstances (such as company-wide layoffs). This protection and the positive cultural attitudes surrounding parenthood make it easier for parents of young children to succeed and advance in their careers. 

More spending power if you keep your current job

In recent years, it has become very popular for people to bring their jobs with them when they make aliyah. If working remotely in your current job is an option, there are many reasons to consider it. It will ease your transition to Israel and be less disruptive to your career path. If your salary is significantly higher than what you would earn in a similar job in Israel, you’ll enjoy more spending power on the same salary.  

While the prospect of aliyah can be daunting, it’s important to remember that the Israeli job market has advanced along with the country’s general development and many olim enjoy satisfying and lucrative careers.

Categories
Business in Israel

Payment Terms for Israeli Businesses

When running a small business in Israel, it’s important to understand the various payment terms that exist to avoid unpleasant surprises. Although, in theory, you can set out the terms by which you want to be paid, large organizations and institutions will likely have a policy for payment to all suppliers. Here are the terms you need to be familiar with:

Mezuman – This means that the customer pays for the product or service before or right after receiving it. Although mezuman usually means cash, in this case it refers to any payment made immediately, whether in cash or by credit card, Bit, Paybox, bank transfer etc. 

Shotef – Payment is received after the end of the month in which the service or product was supplied. So if you provided your client with a new logo on July 12 and sent the invoice in that month, payment will be made at the beginning of August.

Shotef +30 – In this case, payment is made thirty days after the end of the month in which the service was provided. So that July 12 logo will be paid for on August 30.

Shotef + 45 – According to Israeli law, private businesses, government offices and municipalities and institutions which receive government funding are required to pay within 45 days of the end of the month in which the invoice was issued. They would pay for the logo by September 15.

Shotef + 60 – Payment is made 60 days after the end of the month in which the product or service was received. In our example, payment will be received on September 30.

Generous payment terms are, of course, in the best interests of the clients, giving them more time to come up with the money to pay for services or products they have already consumed. They can be difficult for you as a business owner, since you rely on these payments to sustain and grow your business as well as to pay yourself a salary. You can protect yourself by:

  1. Refusing to work with anyone whose payment terms don’t align with your best interests
  2. Confirming the payment terms before you begin your business relationship
  3. Building delayed payment into your pricing
  4. Negotiating payment terms with clients, especially after you have developed a relationship with them
  5. Vetting clients in advance to weed out those who don’t pay according to the terms they agreed to

If you made aliyah from a country in which payment terms are different, it may take some adjusting to get used to the way Israeli businesses pay and get paid. But if you plan your spending according to your cash flow, your business can succeed and flourish.

Categories
Employment in Israel

5 Ways to Supplement Your Income

When your expenses exceed or are uncomfortably close to the income you’re bringing home, you can of course work on budgeting and cutting expenses. But another avenue to solve this problem is by supplementing your income. There are 5 common ways this is done in Israel: 

  1. Open a side business – Whether you are already an entrepreneur or an employee, a side business can bring in that extra income you’re looking for. Do you have a talent or a hobby you can turn into a business? Are your friends always asking for your help with something? That might be a service that is needed in your community. Don’t forget to consult an accountant before starting a business, to ensure you are legally compliant and set up for success.
  1. Take a second jobWorking more than one job is common in Israel, especially if neither job is full-time. Many people work one job in the mornings and another in the afternoons. If your main job takes up a full day, maybe you have time in the evenings for a few hours of remote work or babysitting. If you’re in a profession with time off on school vacations, consider working on those days for businesses that have extra traffic when school is out. Make sure you let the tax authorities know that you have two jobs and fill out a Teum Mas so you pay the right amount of taxes on each income.
  1. Raise your rates – If you work for yourself, raising your prices is an effective way to increase your income. Don’t be afraid that the market in Israel can’t bear higher prices. When you charge more, you let customers know that your product or service is higher quality and worth the investment. As you gain experience and perfect your offerings, you should raise your rates accordingly.
  2. Ask for a raise – As an employee, you have less control over the salary you receive, but Israeli employers aren’t necessarily going to promote you or give you a raise if you don’t ask. At your annual review or another opportune time, present your accomplishments in the job and ask for that raise. If you get an emphatic no, it may be time to start looking around for other opportunities in your field which offer room for advancement.
  3. Invest – If you’ve got some money saved up, investing it can generate passive income for you. Many investment opportunities require a sizable sum, but there are some that will allow you to invest smaller sums. Investing is best done with professional advice, especially if you’re an American citizen and have to avoid certain types of investments for tax purposes. 
Categories
Business in Israel

Giving Out Free Advice – Yae or Nay?

As soon as people hear what you do, there’s a chance that they will ask you for free advice. It might be a question you can answer in five minutes and it might be a long conversation. They might want to know something general or they might want really specific information with step-by-step instructions. 

Should you give out free advice? There are two schools of thought about this and you’ll have to decide what works for you.

Reasons not to give free advice

  • This is your profession and you’ve worked hard to learn everything you need to know. If someone wants advice they should pay for a professional like you to provide it. You’re in the business of providing paid advice and giving it away for free means fewer paying customers.
  • Questions rarely take a short time to answer. As soon as you give one piece of free advice, there will be a follow-up question. You will soon find yourself in an hour-long conversation, when your time would be better spent doing actual work.
  • People often pick your brain because they want to compete with you and this is a shortcut to learning what they want to know about your profession or business. Your free advice might be just the ticket they need to start vying for your job or filching your clients. In a small market like Israel, this can have a big impact on your success.

Reasons to give free advice

  • You’ve acquired a lot of knowledge about your profession or business. When you share it with others, they understand how much you know. When someone asks them to recommend a professional, they will tout you as the expert in the field. And if they’re trying so hard to get free advice, they aren’t your ideal customer anyway.
  • Giving free advice can be a time drain, but you can control how much time you spend talking to someone. You can always end the conversation by politely saying that you have another meeting and go back to your regularly scheduled work.
  • Competition is only an issue when someone is doing exactly the same thing you are. But chances are that they will choose a slightly different niche, and if you are good at what you do, more people in the profession or business is not a bad thing. Karma, on the other hand, is a great thing. When you put helpful energy into the world, you’re likely to get that positive energy back, whether directly or indirectly. In a small ecosystem like Israel, you want to be known as helpful and nice.

Setting boundaries

You don’t necessarily have to make a hard and fast rule about whether you give free advice. Experiment with one policy and see how it works for you or just decide on a case-by-case basis. When someone asks you for free advice you can use these questions to weigh whether to provide it:

  • Is this person polite and respectful of your time?
  • Are you able to cut them off when you feel the conversation has gone on long enough?
  • Are you on a tight deadline or need to work more hours, or can you devote some unpaid time to answering questions?
  • Is this person someone who can refer work to you or recommend your expertise?
  • Do you enjoy giving this person advice? 
  • Is your advice being taken or are they milking you for your opinion and then doing the opposite?

At the end of the day, your instinct can generally tell you whether to give free advice or not. You can feel when you are being taken advantage of and you will automatically feel resentful. When that happens, it’s time to set firm boundaries and refer them to your client relations department or to a list of your rates.

Categories
Business in Israel

Getting Your Website Noticed in Israel

Building a website isn’t enough – in order to bring in business, you need to create a site that will actually get noticed. In an ecosystem of millions of websites, this can seem a daunting prospect. But remember that you don’t need to compete against every website in the world, only against a smaller number of sites that are in your niche. Here are some basic guidelines for getting your website noticed.

Graphic design

When designing your website, you need to choose a graphic design that reflects your brand and that you connect with. You should love the look of your website and not be convinced by a designer, developer or business consultant that you should like what they recommend. The site should be easy to use and intuitive for the customer, in addition to being aesthetically pleasing. There is no particular design that will appeal specifically to an Israeli audience, so just go with what looks right to you.

Keyword research

Spend some time using a keyword research tool such as Google Ads Keyword Planner to find the phrases that are being used to search for information about your niche in Israel. For businesses that serve both Israelis and English speakers, don’t forget to search for keywords in both English and Hebrew. Also look for Hebrew words spelled in English, since anglos in Israel often use Hebrew terms but type more quickly in English. They may also search for phrases in a mixture of languages, such as “how to collect avtala.”

Once you have a comprehensive list of keywords, see how you can integrate them into your website text in a natural way. Don’t overstuff your content with keywords though. You don’t even have to use all the keywords on your main website pages. You can keep this list handy as you add blog posts to your site over time and use keywords gradually.

Search engine optimization

In addition to using keywords in the body of your text, insert them into image file names, titles and alt texts. Write page titles and meta descriptions that grab readers’ interest and keep them to the required length – 50-60 characters for titles and 120-155 characters for meta descriptions. Small businesses don’t need to invest in professional SEO, but sticking to the basic guidelines of best practices will go a long way in getting your site noticed.

Social media marketing

Once your site is live, you are far from done with getting it noticed. Post about your business on social media and link back to the website where relevant. Publish blog posts and put links to them on your social media channels. When someone on social media asks a question that you have answered on your website or blog, include a link in your answer. The Israeli social media scene, and especially the Anglo-Israeli social media scene, is pretty small, so consistently posting and interacting in a positive way can make your brand famous in the right circles. 

Pay per click advertising (PPC)

If you’re not getting enough organic traffic to your website, you can experiment with pay per click advertising on social media or through Google Ads. You control the budget so it can be affordable even for a small business. One disadvantage is that targeting is not very precise and there are so many niche communities in Israel that you are generally not able to control who sees your ads. Even when you choose a city, your ads are likely to be shown to people living not far from that city who are totally not relevant leads. Experiment with a small budget and see if the ads bring you ROI (return on investment) before investing significant sums.

Tweak as you go

The difference between print and web is that you don’t ever have to finalize your website. You can make changes as you discover what works and what doesn’t or as you expand or shift your business. You can start with a website in English and add Hebrew later on, or you can focus your marketing on clients in Israeli and add a section for clients overseas when you decide to serve them as well. Tweak your website as you better understand your target market and continue to tweak as you refine your business and fill new needs.

Categories
Employment in Israel

Do Israeli Companies Want Cover Letters?

This is actually a controversial question! Many Israeli HR professionals say they don’t read them and that writing one is a waste of time. Other hiring managers say that they do read them and that they help them get a better feel for the candidate. 

In some cases, the application system or the job ad request a cover letter. In these cases, it is important to include one, since HR managers may discount your application simply because you didn’t follow directions. If a cover letter was not requested, it’s best to write a short text in the body of the email in which you attach your CV and not include a cover letter in a separate document.

What to include in an Israeli cover letter

The cover letter should not be a regurgitation of what you’ve already written in your CV. Instead, write a few sentences that include things that don’t appear on the resume, such as:

  • Why you’re right for this job – what skills you have that are important for the job and what sets you apart from other candidates
  • If you have informal experience which is relevant to the job, this is the place to include it
  • Express enthusiasm for the position and show that you’ve done some research about the company by mentioning that you connect to their mission or they type of work they do

Formatting the cover email

Start the letter with Dear X, if you know the hiring manager’s name. If not, Dear Hiring Manager works too. Don’t use Dear Sir/Madam or To Whom It May Concern, as those are old fashioned ways of addressing a letter. On the other hand, Hi or Hello might be considered too informal.

After introducing yourself, format the body of the email with bullet points, numbers or moderate use of bold to make the main points stand out. This is important because the hiring manager is probably skimming and not actually reading.

Mention that your CV is attached, just in case the recipient didn’t notice it. And don’t forget to thank them for their time.

Keep it brief – no more than 3-4 sentences total. HR professionals are short on time and you want to respect that. 

Apply through a friend

Hiring managers agree that the best way to get your CV to the top of the pile in an Israeli company is by applying through an employee already working there. A recommendation from a friend (or a friend of a friend) is worth more than a well-written cover letter.

Many companies offer their employees bonuses if they refer new employees. Even if not, they will get brownie points for bringing in someone good. Add to that the Israeli tendency to want to help others (we are a nation of chesed, after all) and you are likely to find that even tenuous connections will be happy to pass on your CV. In any case, it doesn’t hurt to ask.

Wishing you luck in your job search!

You may also find these articles helpful:

Categories
Business in Israel

When Companies Don’t Pay on Time (or Ever)

In an ideal world, collecting payment from clients would be as easy as pie, but unfortunately almost every business owner in Israel has experienced a situation in which payment was delayed or never came. Here’s what you can do to avoid these issues and deal with them when they crop up.

Be clear about payment terms

As a service provider, you will often encounter businesses and institutions with payment policies which favor the client and not the business owner. In these cases, you will hear the terms Shotef + 30 and Shotef + 60. Shotef refers to the end of the month, so you will be paid 30 or 60 days after the end of the month in which they receive the invoice. In practical terms, you might collect payment almost 3 months after completing the work.

You can, of course, refuse to work with clients who hold these policies. However, that might not be practical in certain industries or a project might be attractive enough that you are willing to forgo immediate payment. If this is the case, make sure that you understand clearly what the terms are and that you send your invoice as soon as possible. Ask if you can send it before beginning the work or split the payment into installments so you are paid sooner.

When working with clients who don’t have clear payment policies themselves, delineate your payment policy in writing. Let them know when you expect payment and if there is a penalty for paying late or a discount for paying early.

Clients who pay late

There are always going to be clients who take their sweet time paying for the services you have provided. Reminders about outstanding bills may be helpful, as well as offering to accept payment in installments, if it seems that the problem is financial. Another option is to stop further work or refuse to hand over what has been done until payment is received.

For ongoing clients, if they are often late, consider switching to a system in which they pay (in full or partially) in advance before you begin the work or end your agreement with them.

Clients who refuse to pay

A much worse problem than clients paying late is those who just don’t pay at all. Sometimes they say they will pay but never do. Sometimes they denigrate your work and say it wasn’t up to their standards, for the sole purpose of avoiding payment. As aggravating as it is, if the sum is small, it may not be worth pursuing. However, if the amount is significant, you can submit a request for collection to Hotzaa Lapoal (the execution office). If the client doesn’t respond to the claim, the office can take measures like freezing his bank account to pressure him into paying. In a case where the client denies the claim, you may have to escalate and take him to court.

Vet clients in advance

Because payment issues can be devastating to a business, it’s a good idea to find out in advance if a client is reliable and trustworthy. If you know someone who has worked with them in the past, they can tell you whether payment was received in a timely fashion. Well-known businesses are less likely to renege on deals, but more likely to have unfavorable policies in place. Individuals and other small businesses are a wild card, unless you’ve ascertained from others that they had good experiences working with them. Also, trust your instincts. If a client seems slippery or overly critical, chances are that payment issues will pop up later on. If you have a bad feeling about a client, don’t take them on.

New business owners often struggle more than experienced ones with payment issues. That’s because experience has taught those who’ve been in business for a while who to trust and how to safeguard against non-paying clients. Nonetheless, it’s hard to eradicate the problem entirely, so a certain amount of time must be devoted to chasing after clients who owe you money.

Categories
Business in Israel

How to Close Your Osek Patur or Murshe

When you close a business in Israel, you must report this to Mas Hachanasa (the income tax office), Bituach Leumi (National Insurance), Maam (VAT office) and your pension company. Failure to do so will result in your continuing to be liable for reporting and taxes. 

Reporting the closure of your Osek Patur or Murshe should be done as soon as possible. These are the forms that you or your accountant must fill out:


Other things you may need to take care of include:

  • Severance and other payments that might be due to employees
  • Letting your municipality know about the business closure if you were paying Arnona as a business owner
  • Canceling any insurances
  • Canceling relevant phone and internet services
  • Announcing on social media and directly to your customers that your services or products are no longer available 

After the business closes

You will have to report your business profits for the calendar year in which you closed down, even if you only operated for a few months.

All paperwork related to the business should be saved for seven years in case of an audit.

If you’ve closed your business in order to become an employee (including of an Employer of Record service), you can ask your new employer to contribute to the same pension fund you were using as a business owner. You will have to be in touch with your pension company (either directly or through an agent) to set this up.

Closing your business might feel like the end of an era, but hopefully it’s the beginning of many wonderful things to come in your professional life.

Categories
Employment in Israel

Travel Expenses in Israeli Labor Law

As an employee in Israel, you are legally entitled to a refund on travel expenses unless your employer arranges transportation for you. The refund is for the amount it would cost you to get to work and back on public transportation, up to a cap of 22.60 NIS per day or the price of a monthly ticket, whichever amount is lower. This amount is calculated according to the amount you would be charged and takes into account any discount you might have, such as a senior citizen or student rate. You cannot waive the right to receive travel expenses and the refund is considered taxable income.

If you need to get to work or back home at times when there is no public transportation, such as national holidays, Shabbat or late at night, you are entitled to 22.60 NIS for each of those days, unless a different arrangement was made in the employment contract.

When you live 500 meters or less from work, you don’t get travel expenses, because it is assumed that you can walk to work. A person who is unable to walk, such as someone with a physical handicap, is an exception to this case. If you are entitled to free rides on public transportation (such as if you’re 75+ years old) you will not receive travel expenses.

Travel expenses are paid only on days when you come to work. If you stay at the job location on some nights (for instance, a hotel employee or a security guard), you would only receive a refund for days you actually went home.

When public transportation isn’t used, for example, if you decide to walk or come in your car, you are still entitled to the refund. 

You don’t need to take any steps to get your travel expenses refunded; this is taken care of by the employer, based on the home address you provided them. As always, you should check your pay stubs and make sure this payment is included in your salary.

Travel time

Generally, travel to and from work is not considered work time and is not paid. Even if you travel abroad for business, you are only entitled to payment for time you’re on the flight if it’s during hours when you would usually be working. 

The exception to this rule is if you were asked by your employer to travel to a specific location, such as a client’s office, in which case, travel time would be considered work time. 

You and your employer can, of course, make a different agreement, in which travel time is included in your work hours. You might want to bring this up with your employer if you frequently travel outside of regular work hours.

Food and accommodations

Legally, employers don’t have to reimburse expenses on business trips abroad or inside Israel, but many companies have policies that cover food and accommodations, either according to receipts saved by the employee or by an honor system. This refund is called Eshel (an acronym for food, drink and sleep). Before going on a business trip, clarify the policy with HR and be sure to keep records and save receipts for relevant expenses.

Categories
Bringing Your Existing Job to Israel

Working from Home vs. Shared Workspace

With remote jobs gaining in popularity in Israel, especially among olim who work for companies in the US, the question of where to work is a crucial one.

Working from home

Working from home has a lot of obvious advantages. You can roll out of bed straight to your office without that pesky commute, there’s no need to pack a lunch or buy an expensive meal and you can throw in a load of laundry in between tasks. But in order for working from home to be a viable option, you need certain conditions:

  1. A place to sit comfortably with convenient placement for your computer (probably not your couch)
  2. A professional looking, quiet space from which to conduct meetings (not your bedroom)
  3. An environment that is conducive to work, without too much coming and going (especially of little people!)

Working in a shared workspace

Don’t have these conditions? You might want to think about working in a shared workspace. While it’s true that every Israeli coffee shop has at least one person sitting there all day with their computer, cafes have similar problems to noisy households. There are too many distractions and it’s not the most professional background for your meetings and phone calls. Also, although they seem like a free workspace, the expectation that you will order food and drinks throughout the day can make it an expensive option.

A shared workspace will also cost you, but in return you will get a proper desk and a work environment. Many shared workspaces in Israel offer services such as conference rooms, quiet spaces for meetings, printers, coffee and snacks. Some will allow you to pay per day or per week, while others will require a monthly payment or even a long-term commitment. 

When many people of different professions work in the same office, there can be opportunities for collaborations and for learning from each other professionally. You can refer work to others and they can refer work to you. You might work on a project together or get advice on how to handle a situation or perform a certain task. Of course, it’s also easy to find yourself involved in conversation when you should be working, so if you’re often distracted, this type of work situation might not be right for you.

Choosing the right shared workspace

When choosing the right shared workspace for you, consider these factors:

  • How far will you have to travel to get there?
  • What percentage of your income will go toward paying for this workspace?
  • What services are included and do you actually need them?
  • Do you prefer a large, bustling workspace or a smaller, family feel?
  • Will this space increase or hinder your productivity?

Most workspaces will allow you to try them out, either for free or for a small fee. Spend a day in a space you’re considering and see whether it meets your needs and if it will be a pleasant experience as well as a good place to work.

Categories
Employment in Israel

Job Perks in Israeli Companies

Israeli law is very specific about employee rights and many companies provide only what the government requires. But this is not the case in every job. There are many job perks that might be offered by Israeli companies, and it is worth finding out what is prevalent in your industry and what a potential employer offers before accepting a job.

Some of the perks that are offered are worth actual money, so they should be considered when you decide whether the salary you’re being paid is acceptable. Job perks might include:

Holiday gifts

In some companies, gifts are given to employees before Rosh Hashanah and before Pesach (or before one or the other). These gifts can range from something small and symbolic to something relatively expensive. Some companies give cash bonuses or gift cards but many will give actual gifts and allow you to choose from a few options. 

Cibus or 10bis

Some companies, especially in the hi-tech industry, provide employees a stipend for purchasing meals through either the Cibus or 10bis app. Employees order in lunch and don’t need to go out to get a meal, so this keeps employees focused on work and taking shorter lunch breaks. Be aware that employers have different policies about using these cards, and some will only allow their use when the employee is actually in the office.

Kitchen full of food and snacks

Another way to keep employees well-fed, satisfied and focused on work is to keep a kitchen full of basic food items and snacks. Some companies will provide fixings for sandwiches, crackers, cookies, potato chips etc. They may also have a sandwich maker, microwave, refrigerator and coffee machine.

Keren Hishtalmut 

Many companies offer their employees the option to receive a Keren Hishtalmut (education fund). Although originally meant for the purpose of professional training, this is basically a tax-free savings plan with contributions made both by the employer and the employee. After three years, the funds can be withdrawn for educational purposes and after six years, for any purpose. Contributing to a Keren Hishtalmut is less expensive for the employer than raising the employee’s salary, so it can be a win-win for both sides.

Equity or options

Start-ups which are strapped for cash might offer stock options or equity in the company instead of a higher salary. This perk is more of a gamble; if you believe in the product and the founders, you may want to take the risk that this will pay off in the future.

Professional courses

Some employers will pay for professional training and may even allow you to take these courses during regular work hours. Professional courses are a long-term investment in your career, since they increase your employability and are likely to lead to a higher salary in your next job or a promotion in your current one. 

In the field of education, professional courses aren’t free but they are heavily subsidized and the more courses you take, the higher your salary.

Phone and computer

Since the world has moved heavily to portable devices, employers often provide the employee with a phone or computer that they can use both at work and at home. Of course, mobile devices may also come with the expectation that you will be available for work outside the normal work hours. When you terminate your employment (or it is terminated), you will likely be offered the option of buying the device at a discounted price. Otherwise, you will have to return it.

Car lease

In order to make it easier for employees to get to work on time, your company might offer the option of leasing a car through whichever leasing company they use. This is an attractive offer, since there is usually a gas allowance and maintenance included in the price. But you really need to do your research and see if the deal you are being offered is better financially than buying a fairly new second-hand car. When you leave the job, you will have to return the car or buy it from the leasing company. 

Private health insurance

Although basic services are provided by the government-run Kupot Cholim (health clinics), many Israelis have private health and/or dental insurance to supplement the basics. In select companies, private insurance is offered to employees. Hopefully you will never actually need it, but if you do, it can be worth quite a lot of money and save time and aggravation in getting necessary medical treatment. 

Vacation days 

Current laws mandate 12 mandatory vacation days in addition to national holidays. Any vacation days above that amount, assuming the employer allows you to take them, are unpaid. In senior positions in most companies, employees are offered more generous vacation packages. You might get a few extra days a year or even enjoy unlimited vacation days. The idea of unlimited days is that as long as the work is getting done, the employer is not concerned with when it is done. Paradoxically, employees with unlimited vacation days often take less vacation because they feel more guilty when they take time off.

When you look at the number of vacation days you’re getting, you also need to ask about compulsory vacation. Israeli law allows employers to close their offices and send everyone on vacation, and these days are deducted from the annual vacation days due to each worker. Common times that this is done include Erev Chag (the day before a Jewish holiday), Chol Hamoed (intermediary days of Sukkot and Pesach) and the end of August.

Sick days from day one

According to Israeli law, if you take one sick day, you are not paid for it. The second and third days are 50% pay and the fourth and on are 100% pay. A perk that you may be able to get is to be paid from the first sick day. This will make it more feasible to take one day off when you’re not feeling well but don’t have a serious illness, without being financially penalized.

Unions and discounts

Certain industries are unionized. Unions fight for employee rights in general and also offer their members discounts on various attractions, hotels, cultural events, products and services. Unions service educators, government and military personnel, healthcare workers and more.

Hybrid work and flexible work hours

In recent years, it has become increasingly popular for employers to require less time in the office and allow for partial or complete work from home, as well as flexibility in when the required hours are worked. Hybrid work can be important if you live far from your office and flexible work hours are important for parents and for people who do their best work outside conventional hours. Even one day a week at home can break up the work week and stave off exhaustion from commuting and office interactions.

Gym or fitness classes

Large companies sometimes have gym facilities on the premises or offer fitness classes to their employees. If exercise is an important part of your lifestyle, having these options at your fingertips without having to travel to another location or paying for a membership can be a significant perk.

Fun days for employees or for employees’ families

This one is a little controversial, because not everyone likes company fun days. Israeli companies see them as opportunities for promoting team spirit and encouraging collaboration. If you enjoy interacting socially with colleagues, these fun days can be a nice perk. If you don’t enjoy them or they are scheduled at inconvenient times outside of work hours, you might see them as more of a burden (especially since you are usually required or strongly encouraged to attend). 

There are some companies where fun days are organized for employees along with their families. These can be great activities to bring kids to, saving you from organizing and paying for something for your kids to do during school vacation.

Remember that not all jobs and not all industries will be rich in perks. Some will stick pretty closely to what’s required by law, while others will be more generous. You have to weigh the value of the perks against the salary, job satisfaction and work-life balance when making a decision about taking or staying at a job. When negotiating a salary, keep in mind that perks cost the company less than a higher salary, so when a potential employer won’t budge on the amount they’re offering, you can often ask for and receive some extra perks. 

Categories
Employment in Israel

Working for a Nonprofit in Israel

Considering working for a nonprofit in Israel? Here’s what you need to know before you go down that career path.

Advantages of nonprofit work in Israel

  • Working in the nonprofit sector in Israel is a fulfilling career, because you can go to work every day and make a difference to the Israeli society, economy and/or political landscape. Nonprofits run the gamut from organizations that feed the poor to those that promote diversity, encourage dialogue or protect political interests. There are organizations that support terror victims, soldiers, religious institutions, children at risk and so much more.
  • Nonprofits often require fewer working hours than careers in hi-tech, medicine etc., making for a better work-life balance. They tend not to expect overtime hours and assume that, in most cases, you leave work behind at the end of the workday and pick it up again the next morning.
  • Because most Israeli nonprofits are at least partially funded by overseas donations, English-speaking staff are often sought after for positions such as fundraising, grant writing, content writing, donor relations and marketing.
  • Although there are fewer jobs available in the nonprofit sector than in hi-tech, there are still plenty of openings, especially in the Jerusalem area where many organizations are based. If you have nonprofit experience and/or excellent writing and communication, there are organizations looking for these skills.

Disadvantages of working in an Israeli nonprofit

  • Salaries in the nonprofit sector are lower than the for-profit sector and significantly less than the hi-tech industry, except at the senior management level. CEOs and experienced fundraisers at nonprofits are often well-paid, but this doesn’t necessarily translate to better salaries for the majority of the staff.
  • Jobs at the senior level are highly competitive and rarely advertised. Instead, they are obtained through word of mouth or protexia (connections). If you have just arrived in Israel and haven’t built up a network yet, it will be hard to find this type of job. Whether you have already made aliyah or are still in the planning stages, you will need to create a network if you want a high-level nonprofit position.
  • Nonprofits generally have smaller budgets, leading to understaffing and the expectation that one employee will do a variety of tasks that would be assigned to a number of people in a for-profit organization. If you’re the sole English-speaker in the office, you might be asked to translate texts or show donors around, even if these tasks are not covered by your job description. However, if you are the kind of person that thinks wearing many hats keeps things interesting, this could actually be an advantage.
  • Gifts, fun days, holiday parties, bonuses and other job perks are more common in for-profit companies than in not for profits. If you got used to these types of benefits in your previous job, you might be disappointed by their absence in a nonprofit position.

How to get a nonprofit job in Israel

As mentioned above, networking is a great way to find a nonprofit job, especially on the management level. You can also look for a job in the traditional way, particularly for non-management positions. Job boards like Nefesh B’Nefesh and Facebook groups for English-speakers are a good place to start your search. Don’t forget to let people know what type of position you are seeking, since you never know when something suitable will come across their desk. If your job search is public, you can even make an announcement on social media. Otherwise, contact friends privately and put out discreet feelers.

Wishing you a successful job hunt and a career that fulfills and inspires you!

Categories
Employment in Israel

Navigating the Question of Salary Expectations

If you’ve ever been interviewed in Israel, you have probably experienced the scariest question of them all: “What are your salary expectations?” This question strikes fear in the hearts of job seekers everywhere, because the wrong answer can have far-reaching consequences. If you quote too high, you risk losing the job altogether. But if you quote too low, they might take you up on it and underpay you for months or years to come.

Unfortunately, if you are asked this question point-blank you do have to give an answer, so here are some tips on navigating this issue.

Market research

You will be in a much better position to discuss salary expectations if you’ve done some market research and know what salaries are common for people in your position. It can also help to know if the company you are interviewing at tends to be generous or frugal in its salaries. You can look for this type of information on websites where people anonymously report their salaries, in articles posted online about careers or by asking people to share their first or second-hand knowledge. Most Israelis will not tell you their salaries (or share information that will help you guess it) in a public forum, but many will be happy to share privately if they know they are helping out a fellow colleague. Ask publicly, but stress that you are open to discuss via private message.

Don’t undersell yourself

Women, especially, have a tendency to undervalue their work and ask for lower salaries (and more modest raises), so they often find themselves making less than their male colleagues and sometimes even less than their subordinates. Before going to an interview and answering that dreaded question about salary expectations, try out your quote on friends, family or former colleagues and get their reactions. Saying it out loud also helps you be more confident about the quote so you don’t sound wishy-washy in the interview. 

Don’t answer too quickly

In some Israeli job interviews, you are asked your salary expectations before you have even gotten any details about the job. If that happens to you, ask for more information about the responsibilities of the position before answering. You may have to adjust your expectations based on what they tell you about the job. For instance, if you didn’t know the job included management and are now being informed it does, ask for a higher salary than you originally planned.

Quote a range

Your salary expectation doesn’t have to be a specific number. You can say that you are looking for a salary between x and y. Obviously, the lower number should still be acceptable to you, since they may very well end up offering that to you. The higher number should be higher than you actually expect to get, so they can negotiate you down. 

Stress your flexibility

Another way to approach this question is to quote a number on the higher side and stress that you are flexible. If the number is way above what they want to pay, this job is likely not for you. But if it’s above their range but not obscenely so, they will jump on your flexibility and begin a negotiation. Once they start negotiating, remember that you can ask for benefits like sick days from day one, more vacation days and Keren Hishtalmut, in lieu of a higher salary. 

Use your current or previous salary as a marker

Switching jobs is an opportunity to raise your salary. When asked about salary expectations, you can say that at your current or previous place of employment you were making x and would like to improve upon that. This is a reasonable answer, since employers expect that you are looking to increase your salary in your new job. If you were paid market value before and spent a few years at a job, a higher salary is certainly in the cards. Obviously, this strategy won’t benefit you if you were being severely underpaid in your previous position!

Turn the question back on the employer

This advice comes with a caveat, as many have reported that they tried it and it didn’t work. But others have had good experiences with answering the question with a question of their own. When the employer asks your salary expectations, ask them what range they have in mind for the position. Sometimes they will tell you and then you can try to get the higher end of that range. Often, they will still insist that you quote a salary without them giving anything away, at which point you will have to give a more direct answer. 

Negotiate in the HR interview

Many Israeli hiring processes include an initial interview with your potential manager, followed by an interview with the HR department. That second interview is where serious salary negotiations happen. If you think you lowballed yourself in the previous discussion of salary or want extra benefits, this is the time to ask for what you want. If you change your quote drastically from what you initially said, you risk losing the position, but if you say that you thought it through or did more research and would like slightly more, you may very well receive it. The company wants to hire you at this point, so you have some negotiating power and you should take advantage of it. 

It’s not easy to navigate the question of salary expectations, but these strategies should help you answer the question confidently and get the salary you deserve.

Categories
Business in Israel

Building a Website for Your Israeli Business

A website is an important tool for a website, since Googling to find a service or product is usually the first action that a potential customer takes. Even when the customer has heard about your brand from another source, chances are they will search for your website in order to find out more. So you need a website that accurately represents your business and serves as the hub of all your online activity.

Hire a professional or DIY?

There are a number of factors that determine whether you should build your own website or do it yourself. The first is, of course, budget. There is a vast range of prices for building a website, even the simplest five-pager. Get a number of quotes and check samples of work that the developer or designer has done. If all the quotes are out of your budget and/or you are technically minded, there are many platforms that can be used to make beautiful websites with little to no knowledge of coding. Of course, you need to consider whether this is the best use of your time, or if you should concentrate on other aspects of getting your business off the ground.

Domain and hosting

You need a URL and a server to host your website. These can be purchased from various companies in and outside of Israel. One question to ask yourself is whether you should have a URL that ends in co.il or .com. The answer to this question is dependent on how crucial it is to define yourself as an Israeli business. If you sell products that ship all over the world you may not want to choose a “limiting” Israeli domain name. But if you are a business that provides services to Israeli clients only, co.il might be a better choice. Certainly if your website is in Hebrew, it makes sense to use an Israeli domain as well.

Language

What language should your website be in? Again, this is dependent on who your clientele is. You might choose a Hebrew-only site, an English-only site or a bilingual site. Creating a bilingual site is a little more complex, but if it’s important to reach both the English and Hebrew speaking market, that’s the way to go. Keep in mind that certain industries in Israel, like hi-tech, function primarily in English, so even if you are targeting Israeli companies, you likely want to stick with English on your website.

Website platform

Whether you are building your website on your own or hiring someone to do it for you, you will need to update the site afterwards, so it’s important to choose a platform which feels user-friendly to you. There are more visual types of platforms like Wix and more text-based platforms like WordPress. Play around with the various choices before deciding, so you can pick the one that’s simplest for you to use.

Compare the pricing of the platforms that you are considering, and remember to include domain and hosting in the calculation. Some platforms come with domain and hosting while others only provide the content management system (CMS).

Look for a contemporary look on the front end as well as an up-to-date backend, including search engine optimization capabilities and easy editing. 

Search engine optimization

Your website should be built according to the basic rules of search engine optimization (SEO). Small businesses generally don’t need a complex SEO strategy, but the basics do still apply. Every page should have a title and a custom meta description. Headers should be used to divide paragraphs, and images should have file titles and alt texts which describe the content of the page. For an overview of what you need to know about SEO, see the Moz Beginners’ Guide to SEO.

Payment methods

Need customers to pay you directly on your website? This is, of course, necessary if you are selling products online, but can be useful for marketing services as well. The most efficient way to do this is by using a payment system that syncs with your invoicing software and creates receipts automatically whenever a payment comes through. In any case, choose a payment method that is accepted in Israel and easily connects to your bank account. You can read more about payment methods in Israel here.

More resources on starting a business in Israel:

Categories
Employment in Israel

Interviewing While Pregnant

The rules for telling a potential employer about a pregnancy are similar to telling a current employer. A woman is not obligated to divulge that she is pregnant until the fifth month, except in a case where the pregnancy affects the job, for instance, if the job requires physical exertion or exposure to dangerous chemicals. If the woman is interviewing for a specific amount of time or for a project with a deadline which will be affected by her maternity leave, she is required to disclose her pregnancy before accepting the job.

If a woman does mention in the hiring process that she is pregnant, the employer is legally not allowed to discriminate against her when deciding whether to hire her. However, this type of discrimination still happens, since employers are worried about being left high and dry soon after training and onboarding a new employee. And it’s hard to prove that you weren’t hired due to your pregnancy, since the company can claim that there were better candidates or that you weren’t hired for other professional reasons.

Is it a good idea to keep a pregnancy to yourself?

You might feel that it’s dishonest not to let the employer know you are pregnant and that you want to start your working relationship with complete honesty. Before you decide to let them know, keep in mind that the law recognizes that pregnancy is a private matter and need not be shared until it’s relevant to the workplace. There have been enough cases of companies rescinding offers when they hear about a pregnancy (despite it being illegal), so it’s not really worth the risk.

There are some women who feel that disclosing their pregnancy is a good way to test whether the company will be supportive of pregnancy, maternity leave and parenting issues. If you’re thinking this way, consider how much you need a job. If you’re willing to wait it out until you find a super-supportive employer, by all means, tell them you’re pregnant. But if you need a salary now, worry about their supportiveness later. Take the job, enjoy your legal rights, and if the job isn’t a good fit for the work-life balance you need, you can always leave at a later date.

Bottom line, a potential employer is not allowed to ask you questions about pregnancy or discriminate based on it before the fifth month, and you are fully within your rights not to tell them until you are five months along.

Categories
Business in Israel

Accepting Payment for Your Israeli Business

An important principle in marketing is that the easier it is for a customer to pay, the more likely it is that they will buy from you or pay their bill on time. Whether you run a service-based or product-based business in Israel, you need a way to accept payment that is efficient, cost-effective and user-friendly.

Paybox and Bit

Paybox and Bit are two Israeli platforms for transferring money quickly and easily and are ideal for small sums. One advantage of accepting payment via one of these apps is that customers can send you payment while you are talking to them and it arrives immediately. In Paybox, the money stays in the app and can be downloaded to your bank or used to make your own payments. In Bit, the money goes straight into your bank account.

Another advantage is that you may meet customers when they don’t have any other means of payment on them, but they almost always have their phones. Even someone who left their wallet at home for the sole purpose of not spending any money can often be tempted to make a purchase once they realize they can pay via app.

Regulations, fees and terms of use change periodically in these apps. For instance, there is now a fee in both apps for going over 25,000 NIS of payments annually. You can choose to accept only one or the other, based on what’s most cost-effective and efficient for you. Or you can let customers choose, since getting paid quickly is more important to you than an extra fee or lack of convenience.

Grow by Meshulam

Grow by Meshulam is a solution for accepting credit cards, Google Pay, Apple Pay and Bit from customers, either in person (via the app) or online. If you manage an e-commerce shop or sell products in a brick and mortar store or at fairs, you may find this to be the easiest payment solution. Even if your business is service-based, if enough clients want to pay by credit card, consider offering them this option. Grow charges a fee and takes a percentage of the sale, as all credit card processors do, so take that into account in your pricing.

Grow integrates with invoicing software, so you can send an invoice with a link that allows your customer to pay immediately using their credit card, Google Pay, Apple Pay or Bit. Once payment is processed, they will automatically receive a receipt, saving you time and energy.

PayPal

The advantage of PayPal is that customers trust its security and often prefer it to providing you with their credit card details. It can be used internationally, so it’s easy for overseas clients to pay you. However, their transfer and conversion fees can be high, so take that into consideration before deciding to accept PayPal.

Bank transfer

A bank transfer is easy to accept, since you don’t have to take any action once you’re paid. When transferring large sums, this is often the best method. Some customers are familiar with their bank’s platform/app and prefer to send money via bank transfer, while others might be reluctant. Bank transfers do incur a fee, but if you pay a flat fee for all bank activities, this will not be a concern.

Checks

Checks have largely gone out of fashion in the Israeli business space, and for good reason. It’s time-consuming to write a check, it can be deposited any time in the six months after it’s issued, leading to unpleasant surprises, and it can be transferred to a stranger. Adding to that, “the check is in the mail” is a popular joke because it’s true. However, if a customer insists on paying via check, you can certainly accept it. Remember that if you deposit a check before the date written on it, you will be charged a fee. Checks clear three business days after they are deposited. If the check says “Lamutav Bilvad” on it (beneficiary only), it can only be deposited in an account with the same name as written on the check, so be sure to let your customer know what name to write.

Stripe – not supported in Israel

Stripe is a popular online payment method in many countries but it is not supported in Israel. If you have a US-based Limited Liability Company (LLC), an Employer Identification Number (EIN) or Tax ID, a physical US address, US phone number and US bank account, you can use Stripe while residing in Israel. Otherwise, it is best to use other payment methods.

Choosing the right payment methods for your business

Which payment methods you offer your customers is a decision that must take into account several factors:

  • Are you generally getting paid in person or online?
  • Are you accepting large payments or small amounts?
  • Are your customers mostly in Israel or overseas?
  • Are you being paid by young people or by older adults?
  • Can you add transfer, conversion and processing fees to your price?
  • What technologies do you feel comfortable using?


Once you answer those questions, it should be easier to choose the right payment methods for your business and encourage customers to buy often and pay quickly. 

Categories
Business in Israel

How to Get Your First Client

You’ve opened a business, chosen a niche, found a workspace and decided how much to charge. Now all you need is that first client… But who’s going to work with someone who has no experience? 

Luckily, that first client is out there and there are a number of ways to find them.

Clients with low budgets

There are lots of clients who have low budgets but still want quality work. They may be willing to take a chance on someone with less experience if they trust that the work will be done well. When you exude confidence and speak knowledgeably on relevant subjects, you show the client that they’re getting a great deal, especially if you offer them a special introductory price. Be sure to make it clear that this is a temporary low rate, so you don’t get stuck charging too little for future work with this client or with referrals they send your way. Draw in this type of client with an ad that emphasizes the introductory price.

Former colleagues

People who have worked with you at a previous place of employment are aware that you are educated, hardworking and know what you’re doing. Even if they worked with you in a different capacity (for instance, you were a project manager and now you’re a graphic designer), if you had a good working relationship, they already consider you trustworthy and like you enough to jump at the chance to work with you again. Send a personal message to former colleagues who might be in need of your services and let them know about your new professional direction.

Friends and family 

Conventional wisdom is that it’s not a good idea to do business with friends and family, but sometimes this is the best pool for finding that first client. These are people who want to give you a leg up and think highly of you. They are also likely to spread the word about your services to others and provide those all-important word-of-mouth referrals. Reach out to everyone you know with an announcement about the services that you offer and ask family and friends to share with their acquaintances. 

Clients who are impressed by your posts

Social media is an excellent platform for getting that first client. Consistent posting which showcases your talent and knowledge will bring in clients who are impressed by your posts. A certain business owner in Israel famously posted on Facebook and LinkedIn for months without getting a single client. Once someone finally took the bait, his business grew and expanded almost overnight. Hopefully you won’t have to wait that long, but you get the idea.

Invest in marketing

Every business needs marketing, and new businesses need it the most. Set aside the time and a budget for marketing for the first three months and reevaluate at the end of that period. Get the word out there about who you are, what you know, what you offer and – most importantly – how you help clients reach their goals. For more information on how to do this, read How to Market a Business in Israel.

Categories
Employment in Israel

5 Ways to Advance Your Career in Israel

Feeling stuck in your career? Want to move forward but aren’t sure how? Here are 5 ways you advance your career in Israel.

Plan your career path

In order to advance your career, you need to know where you are headed. Determining your short-term and long-term goals is the first step in accomplishing them. Do you want to move up to management? Do you prefer a more flexible work schedule or a higher salary? Are you interested in a different position than you have now (or even a totally different career)?

Once you have broader goals, narrow them down to actionable items. 

Let’s say you want a raise. How will you prove to your manager that you deserve one? Volunteering for projects, finishing tasks before the deadline and speaking up in meetings are all ways to demonstrate your worth to the company.

When is the right time to ask? Some companies in Israel do salary reviews at the end of the calendar year, while others do them individually for employees based on the length of their employment in the company. Still others don’t do them at all, so you won’t get a raise if you don’t ask. Figure out when you should approach this at your workplace and don’t miss the opportunity.

Learn new skills

The more skills you have, the more sought-out you will be as an employee. Upping your game by learning new skills, either in your industry or in a totally new one, can give your career that extra boost. You can do this by taking professional courses or by getting involved in work projects that require you to learn aspects of the business you haven’t previously experienced.

Build a network

In Israel, it’s all about who you know. Online and offline networks are the best source of job opportunities and resources. Have a professional question you need answered or a connection to a professional? When you have a strong network, you can accomplish things that you didn’t know you could and impress your bosses in the process. 

Olim often feel like they are behind in the networking game, since they don’t have connections from grade school or the army, but anyone can build a network if they devote time and energy to it. Giving freely of your time and expertise puts good karma out into the universe and often encourages others to reciprocate.

Keep your LinkedIn profile up-to-date

A common mistake is to neglect your LinkedIn profile when you’re happily employed. Since you never know what the future brings, it’s recommended to keep your profile up-to-date with relevant information about your position and skills. Israeli headhunters and recruiters scour LinkedIn for candidates for jobs, even those who haven’t announced that they are looking for work. You’ll never know what’s around the corner if you don’t present yourself optimally online.

Don’t get too comfortable

Knowing that it can be challenging to get a job after aliyah, you may have taken the first job that offered reasonable conditions. But a few years down the line, it is time to increase your income, move up the corporate ladder and enjoy better work conditions. 

In today’s job market, many companies prefer to recruit new talent instead of promoting from within. If that’s the case in your workplace, it may be that the only way to get a raise and better position is by looking elsewhere. Although in the past it was common to stick with one job for many years, today it’s perfectly acceptable to switch jobs every few years. When you feel you have gotten as far as you can get in your current job, start looking around for something else. You will likely be pleasantly surprised to discover what’s out there.

Categories
Business in Israel

How to Market a Business in Israel

You probably wish that you could base a business on what you love to do and have work come to you without any effort. While that sounds like a lot of fun, in the real world, you need to market your businesses so that people know what you do and remember it when they need you or their friend does. Understanding how to market a business in Israel will help you succeed and grow.

Pinpoint who you’re targeting

Before you start marketing your business, it’s crucial to figure out who you are marketing to. A major component of this question in Israel is determining whether you are targeting native Hebrew-speaking Israelis or Anglo English-speakers. This decision affects whether your marketing is in Hebrew or in English, its style and your marketing funnel. If your Hebrew is not on a high level, you are likely to find it hard to move a lead through the funnel in a language you struggle to communicate in, so you might want to consider sticking with English speakers. Although it’s a smaller niche, you can corner a larger percentage of the market.

Network

If you run a business in a particular industry in Israel for long enough, you should eventually know a large amount of professionals in that niche. Professional contacts are an excellent source of referrals, since they often have clients they can’t take on, due to time constraints or because the client is more suited to your services than theirs. Other business owners in totally different industries are also likely to refer people your way, if they believe that you are good at what you do.

You make professional connections by networking as much as possible. Obviously, you need to spend most of your time actually running your business, but it’s worth allocating some of your work time to getting to know other business owners. Conferences, workshops and meetups are all excellent ways to network. Networking also takes place on social media, in groups dedicated to an industry or to business in general.

Learn more about networking in Israel in our article, How to Build a Network in Israel.  

Social media

Social media is extremely popular in Israel, particularly Facebook and Instagram. You can find Facebook groups dedicated to specific cities and neighborhoods, as well as topics like personal organization, finances, video editing and tourism. It’s important to advertise only in groups where self-promotion is permitted. Some groups allow self-promotion only at certain times or in certain threads, so be mindful of that as well. 

Since Israel is a small country, you can gain a lot of attention simply by answering questions on posts. If you’re a nutritionist and consistently give good advice in answer to questions about eating healthy, eventually you will become well-known in the industry and people you’ve never worked with will refer business to you. This strategy requires that you monitor relevant groups and answer questions regularly, occasionally mentioning that you are doing so in your capacity as a professional.

Facebook and Instagram ads can be targeted only to Israelis or to specific cities, but be aware that they will reach anyone who lives in that general area and can’t be limited demographically.

SEO and blogging

Search traffic is an important component of marketing a business, especially in the small ecosystem that is Israel. Publishing website pages and blog posts about your niche can boost your visibility, especially if you follow the guidelines of search engine optimization. Research what terms people are using to search for your product or service, and use these terms in the texts you write. Focus on copy that is useful to your readers and more people will find you through search.

Neighborhood circulars

In many neighborhoods in Israel, there is a circular published weekly or monthly that is widely distributed in mailboxes and/or in stores and shuls. These circulars may contain some original writing, but are primarily based on advertisements. Since these magazines are targeted to the specific neighborhood, many people skim through them to see if there’s anything of interest that they should know about. If the neighborhood is one that fits into your target market, this might be a good avenue for getting the word out about your services or products.

Keep at it

The key to succeeding at marketing is to do it consistently. Obviously, that doesn’t mean you should keep beating a dead horse if you’re not getting results, but you have to give any marketing avenue some time before you determine whether or not it’s working. And you have to be consistent and persistent to get it off the ground and to take advantage of the momentum. Israelis are hard-wired to want to help, so once you build a network on and offline, you should start to get word of mouth referrals, which are the very best kind.

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Business in Israel

Can an American in Israel Freelance?

Question: I have been living in Israel for many years and work as an office manager. But now I want a better work-life balance and the opportunity to do work that’s more interesting. I was thinking of setting myself up as a freelance translator, but my American friend told me that Americans can’t freelance without losing tons of money. Is this true?

It is true that freelancing as an American expat is more complex than doing it as a native Israeli or dual citizen of another country. This is because US Social Security requires citizens who are self-employed to pay 15% of their income for their retirement. Assuming that you pay Social Security for 40 quarters, you will receive Social Security benefits when you retire. An extra stipend after retirement is not a bad thing, but the question is, can you afford it now?

The Israeli government requires you to pay income tax and Bituach Leumi and deposit into your pension fund monthly. Once you pay all that and 15% Social Security, will you have enough take home pay to support yourself and your family?

Even if the answer is no, you can still have that work-life balance and inspirational work you’re looking for. There are a number of Employer of Record companies in Israel, which employ people in your situation. They are your official employer, paying you a salary and withdrawing all necessary payments. However, you are totally autonomous in your work. You decide which clients to take on, how much to charge, what hours to work etc. Your clients pay the EOR service and they pay your salary from the amount they have collected for you that month.

You will have to pay a fee to the EOR service, either a percentage of your income or a flat fee. If you expect to bring in a high salary, you are probably better off with a flat fee. If you expect to make a lower salary, a percentage-based fee might be a wiser choice. Before going the EOR route, calculate how much you would pay in Social Security vs. how much you would pay in fees to the EOR and see which is more worthwhile. 

Working for an EOR is also a good solution if you work for only one company in the United States. It prevents you from having to open a freelance business in Israel and provides you with a less expensive way to receive your salary, without the added expense of Social Security payments.

Of course, there are additional factors that need to be taken into consideration, such as your income level, the nature of your business and how close you are to being eligible for receiving Social Security benefits. It’s best to consult with a CPA with an understanding of Israeli accounting issues before making a final decision.

Further reading:

Categories
Outsourcing to Israel

Paying an Israeli Employee as a Foreign Company

Do you have an employee moving to Israel who you really don’t want to lose? Have you found the perfect person to fill your open position but that person currently resides in Israel? Is your company accountant telling you this will be complicated and costly?

You’re right to be concerned about the tax implications of hiring an employee in a country where you don’t have a tax presence. If you’re only employing a small number of  people in Israel, you don’t want the hassle of establishing an entity and incurring obligations to the Israeli tax authorities. 

You may have been advised to engage this worker as a freelancer instead of as an employee. While this solves your legal problem, it weakens the bond between you and the worker. And it’s expensive for the worker who needs to be registered as a freelancer in two countries and (in the case of a US citizen) pay 15% Social Security as a self-employed person.

If your worker doesn’t have a bank account in your country, you will have to pay into their Israeli bank account. Transfer and conversion fees can get expensive for both the employer and the worker.

Enter Route 38’s Employer of Record services. The way Route 38 works is that we are the official employer of the worker you wish to retain. You pay us each month (into our US bank account, if you wish) and we take care of paying their salary and withdrawing all legally obligated payments, including income tax, Israeli social security and pension savings. 

In this system, you have no entity in Israel and do not incur any obligations. Your worker doesn’t need to go through the complicated process of becoming a freelancer and dealing with all the expenses related to that. Your worker gets a regular Israeli pay stub and you pay for his or her services through Route 38.

There is a registration and termination fee as well as a small monthly fee in exchange for a smooth and hassle-free arrangement that ensures that your worker is properly taken care of and that your company has no tax obligations in Israel.

Interested in finding out more? Email us at info@route38.co.il with details on your company and the Israeli worker.

Categories
Employment in Israel

Is Hi-Tech All It’s Cracked Up to Be?

You’ll often hear Israelis (especially Anglo-Israelis) say that the best jobs in Israel are those that are in the hi-tech sector. The main reason cited is that hi-tech salaries tend to be higher than jobs in many other industries. 

Salaries in hi-tech vs. other industries

The average salary in Israel as of January 2024 was 12,942 NIS a month, while the average salary in hi-tech was 30,126. That’s a difference of over 17,000 shekel! In addition to the high salaries, some hi-tech jobs come with perks like food vouchers and car leases that make them even more attractive.  

While salaries do tend to be high in the hi-tech industry, the amount of money that is deposited into your bank account is not the only factor to take into account when judging the advantages of a job.

Job security

One of the reasons that the average salary in hi-tech is so high is that in times of crisis (such as war) the lower-paid employees get laid off and are not replaced. The hi-tech industry is very competitive, so companies don’t feel pressured to retain employees when they can easily replace them. In fact, it’s rare to find people who have been employed at the same hi-tech company for many years, whether because they were fired or because they quit when they saw they weren’t getting promoted or receiving raises at their previous place of employment.

Long hours

A frequent complaint of hi-tech workers is that the hours are grueling. In addition to the fact that most hi-tech jobs require full time hours (42 a week), many also expect overtime and availability by phone/WhatsApp/email during non-work hours. Sometimes you are expected to work until a certain hour no matter when you have gotten into work, to overlap with other employees who have come in later. These long hours can cut into work-life balance and be especially difficult for parents of young children.

On the other hand, in the aftermath of Covid many hi-tech companies have implemented hybrid  and remote work policies, cutting down on commute and reducing the amount of time spent away from home.

High pressure

A lot of hi-tech jobs are pretty high pressure, with expectations that may be unrealistic. Sometimes this is a factor of two few employees doing too much work, sometimes it’s a result of ineffective planning and occasionally it’s just the work culture in a particular company. This kind of pressure can cause you to feel frustrated, anxious and worried about your job security.

Of course, many other jobs are also high pressure without the high salary and perks that come with hi-tech work, and this issue isn’t exclusive to only one industry.

Is hi-tech right for you?

If you thrive on long hours (or at least don’t mind them), aren’t nervous about switching jobs periodically and don’t get too worked up over pressure at work, hi-tech might be the right fit. You’ll also need an affinity for the skills that are needed in the hi-tech world – programming, cybersecurity, website development, marketing, technical writing etc. You will need either a degree in a relevant field or a certificate from a recognized and respected institution. 

Many olim find that aliyah provides a good opportunity to switch careers. If you’re in that mindset, consider retraining in a field that will serve you in the hi-tech industry. If hi-tech is definitely not the right direction for you, another way to earn a higher than average salary is by finding a remote job for an American company.

Whatever you choose, we wish you a successful and fruitful career here in Israel.

Categories
Employment in Israel

Switching from Freelancer to Employee

Freelancing isn’t for everyone and it isn’t for every stage of life. Market shifts, changes in your lifestyle or a better understanding of your work preferences are all good reasons to close your freelance business and enter the job market. If, for whatever reason, you have decided to leave freelancing, it’s important to go about it the right way. 

Interviewing for a job 

When you interview for a job, you will likely be asked why you decided to leave the freelance world and seek employment. This question may reflect hesitation on the part of your potential employer, who is worried that you don’t like authority or that you’re compromising on a job when you really want to freelance.

It’s OK to tell an interviewer that you loved the work you were doing but didn’t like running a business. Don’t worry about sounding like a failure. This answer makes it clear that you are an employee at heart and that you are choosing a job because it’s what’s best for you. However, when asked why you want this job, don’t say you’re looking for a steady paycheck. Instead, emphasize what excites you about the work itself.

For more tips on getting a job in Israel, see The Hiring Process in Israel and How to Get a Job in Israel.

Closing your business

Once you get a job as an employee, you need to close your business. This is important so you don’t incur expenses for a business that’s no longer operating. Start by filling out Form 18 for the VAT office, or, in the case of an Osek Patur, an online Hatzharat Osek Patur. Form 18 must be sent to your local VAT office and must include information about any equipment, inventory or property you still have in your possession.

Next, fill out Form 6101 for Bituach Leumi and 2550 for the Tax Authority. These can be done online, although it is prudent to go to the Tax Authority in person to ensure that everything was reported and closed properly. 

If you have a business bank account, shut it down so you aren’t paying extra fees on an account you don’t need. Keep records and receipts for seven years, in case you are audited by the Tax authority.

Adjusting to your new job

Even if you are very sure that you want to work as an employee, there will be a period of adjustment. You have to get used to having a boss and possibly an entire office hierarchy. You’ll have to adjust to asking for time off instead of just taking it when you feel like it. Your salary will likely look smaller, since freelancers have to make about 1.4 times more than employees to take home the same amount. Give it some time and focus on the advantages of having less responsibility, a steady paycheck and a new challenge.

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Employment in Israel

Unpaid Leave and Your Rights

Unpaid leave in Israel is a situation in which you are not working temporarily and not receiving a salary but are still officially employed by the company. Whether this situation was of your choosing or decided upon by your employer, you do have rights which must not be impinged on.

When unpaid leave is taken

Unpaid leave can be taken when you need time off due to illness (beyond regular sick days), a trip, extension of maternity leave etc. It can also be suggested by the employer, when there isn’t enough work or funds to pay salaries but there is hope that the financial status of the company will improve and the job will become viable again. This type of leave was widespread during Covid and has also been implemented during Iron Swords, especially in the tourism industry which took a big hit due to the war.

Unpaid leave can only be taken with the consent of both the employee and the employer. The only case in which the employer doesn’t have to agree is when a new mother extends her maternity leave. Legally, she can take up to a quarter of the time she has been working at the same place of business, but not more than a year.

If an employer forces you to take unpaid leave, you are within your rights to quit, claim deterioration of work conditions and be treated as if you were fired, as long as you notify the employer of your intention to quit for this reason and give them a chance to rectify matters. If the leave is lengthy and has no end date, this is equivalent to firing you.

When permission is required

There are some situations in which an employer can instigate unpaid leave only with special permission from the office responsible for women’s labor law:

  • Pregnant woman
  • Mother or father on parental leave
  • Employee (male or female) undergoing fertility treatments
  • Potential parent
  • Person in the process of fostering a child
  • A woman residing in a shelter for victims of domestic violence 

Financial rights

While on unpaid leave, you don’t get a salary, of course (that’s the unpaid part), but you are paid for sick days and vacation days you aren’t using. If your employer puts you on unpaid leave for his own purposes, you can collect unemployment if the leave lasts longer than 30 days. 

Your employer is not responsible for paying any perks, like use of company property or holiday gifts during the period of unpaid leave.

Seniority

Your seniority status at the company will not be lost during unpaid leave but you won’t accrue more. Seniority for severance pay continues if the leave is up to 14 days long; after 14 days, the period of leave is not counted as work time, and you won’t get severance for it.

Pension

Your employer is not obligated to pay your pension during unpaid leave, but they are responsible for informing your management company that it is not being paid. In order to avoid losing certain benefits, contact your pension company and arrange to pay the minimum amount that keeps the fund active.

Bituach Leumi

If you are on unpaid leave for more than two complete calendar months, your employer pays Bituach Leumi for two months as if you were working for minimum wage. If you worked for part of each of those months, Bituach Leumi will be withdrawn from your salary as usual. After two months, you need to arrange to pay Bituach Leumi directly unless you are collecting unemployment, in which case it will be withdrawn automatically.

Income tax

When you return to your job, you will likely be owed income tax, since in the months previous to your leave you paid a percentage on the assumption that you would be working a full year. In a situation where you were collecting unemployment, you may not be eligible for a refund. When you return to work, bring your Bituach Leumi payment statements to your employer and ask if you are owed. If you were supposed to receive a refund, but it didn’t show up automatically in your salary, file taxes at the end of the calendar year for a recalculation.  

Going back to work

When you return to work, you must have the same work conditions as before, but you don’t necessarily have to be returned to the same position. The employer is allowed to restructure the workplace in your absence and assign you a different job, providing that your salary and other work conditions stay the same. If conditions have deteriorated, you are within your rights to quit and be considered as fired.

Categories
Employment in Israel

What Happens to My Pension when I Switch Jobs?

When you start your first job in Israel, the company is obligated to deposit funds into a pension plan once you have been there for 6 months. The minimum contribution is 18.5%, 6% of which is deducted from your salary and the rest is paid by your employer. This includes both pension and severance pay. Some contracts will have something called Seif 14, which raises the severance pay to 8.33%, paid for by the employer.

But what happens when you switch jobs?

Your new employer is obligated to deposit into your pension fund once you have been employed for three months or at the end of the calendar year, whichever one comes first. They must pay into your pension retroactively, from your first day of employment. 

Most employers have a pension company that they work with and they may recommend that you switch to that company. However, you are under no obligation to do so and you can ask them to deposit into the plan you already have from your previous job.

The differences between pension plans are hard to understand on your own and it’s generally recommended that you consult with an insurance agent who specializes in pensions to determine whether you should switch or stay where you are. Be aware that many insurance agents are salespeople for a specific pension plan and are not objective professionals.

If you are keeping your previous plan, you must notify them that you are now working for a new employer. This can be done via your agent or directly by you. Next, provide your employer with the name of the plan and your account number. Always check that deposits are being made, since mistakes have been known to happen.

Employment gaps and your pension

Sometimes you don’t go directly from one job to the next. It may take you a while to find your next challenge, or maybe you decided to take a break from working for a little while for personal reasons or for an extended maternity leave. In these cases, it’s important to note that if there are no deposits into your pension plan for five months, you will lose two crucial elements of this insurance: coverage if you are unable to work for medical reasons and allowances paid to your family members in the event of your demise.

In order to avoid losing these aspects of your pension plan, let your pension company know that you aren’t working and sign a form called Hesder Bituach, which allows you to pay a nominal fee to keep your plan active. You can set up a standing order (Horaat Keva) to pay this or have the amount deducted automatically from your savings in the fund. It’s also possible to pay a higher amount and add to your actual pension amount (this is often called Risk Zmani, or temporary risk). However, in most cases it is best to pay only the minimum to keep the insurance going, so as not to change the coverage amounts.

In both cases, once you start a new job and that employer pays into your plan, you retain your seniority and the conditions you previously had.

If you decide to open a business instead of getting a new job, consult with a trusted insurance agent to get advice on how to best continue your pension plan.

Severance pay

Included in your pension plan are funds that are earmarked for severance pay and can be withdrawn if you are fired and, in some cases, if you quit your job. This might be a good idea in a financial emergency, but the ideal is to leave them in the pension fund, since, at retirement age, that money will be about 40% of your retirement pay.

Withdrawing severance before retirement has two disadvantages:

  • It lowers the tax benefit when you retire by more than the amount you withdraw (for example, if you withdraw 100,000 ILS, the calculation is an added 35% + CPI (Madad HaMichirim LaTzarchan)
  • The money you withdraw will stop gaining from investments, and the gains when retiring will be subject to your income tax bracket and not a flat 25% fee like on other capital gains tax (Mas Rivchei Hon)

It’s recommended to consult with an accountant or tax advisor before making a decision to withdraw severance pay.

If you are due severance pay, your employer will give you Form 161, in which you request one of three options:

  1. Withdrawal of severance
  2. Addition of the severance pay to your retirement fund
  3. Leaving it in the fund and maintaining the right to withdraw it in the future as severance pay


If for some reason you are not given the form, the pay will automatically be added to your retirement fund.

Learn more about your pension

Your pension is an important part of your financial portfolio, so it’s important to understand how it works and what you will be paid upon retirement. More information is available in our article, How Do Pensions in Israel Work?

Thank you to Motty Handler, registered insurance agent, hmotty@gmail.com, for his help in writing this article.

Categories
Business in Israel

Choosing an Israeli Accountant for Your Business

In order to succeed in business in Israel, you need a valuable product or service, marketing, sufficient manpower and an accountant. You may have heard tales of people who do their own accounting, but these are generally mathematically-minded, detail-oriented people with one-person small businesses. For most of us, an accountant is crucial for staying compliant with reporting and paying the right amount of taxes, Bituach Leumi and pension.

Here’s what to look for when choosing an accountant:

Member of ICPAS

Your accountant should be a member of the Institute of Certified Public Accountants in Israel (ICPAS), known in Hebrew as the Lishkat Roei HaCheshbon B’Yisrael. This organization sets standards and norms in the industry and keeps members abreast of the newest innovations and updates to standards.

Offices nearby

You will occasionally have to visit your accountant’s offices, so it’s a good idea to choose one whose offices are not too far from where you live or run your business. However, most of your interactions will take place virtually, so as long as your accountant has software which is compatible with yours, you can transfer data efficiently.

Languages

If you’re not well-versed in Israeli accounting (and who is, really?), you need to understand your accountant’s explanations. Unless you are fluent in Hebrew, it’s best to work with someone who speaks your native language, so you understand emails and phone conversations and don’t run into trouble because of faulty communication.

Responsiveness

There’s nothing more annoying than reaching out to your accountant, not getting a prompt answer and then finding out you have incurred late fees (or worse) due to not filing something on time or not filing properly. Avoid this by asking friends and family for referrals to accountants who are both responsive and proactive. Once you get a recommendation, ask around some more – social media makes this easy to do – to see if the general consensus is positive.

Size of firm

There’s no one answer for how big your accountant’s firm should be. A large business is likely to want to work with a large and well-known accounting firm, while a small business may prefer a smaller firm. Big firms have lots of experience and satisfied customers, but smaller, or even one-person firms, can provide individualized attention you might not get from a bigger firm. A meeting or phone conversation with the accountant can give you an initial feel for how much time and energy he/she will devote to your success. 

Relationships with employees of government offices

An accountant who has cultivated relationships with employees of the various government offices, such as Mas Hachnasa (income tax), Bituach Leumi (national insurance) and VAT (Value Added Tax) can help you when a problem arises and a personal touch is required. Many accountants will claim to have connections in government offices, but you will want to ask questions that reveal whether these are really good relationships that can be called on when there’s an issue.

Collaborative

If you’re a US citizen, it’s important that your Israeli accountant collaborates smoothly with your American CPA, since your US tax filing is based on your Israeli tax report. Some American citizens choose to work with a firm which takes care of taxes in both countries, while others choose an Israeli accountant who speaks English and understands issues pertaining to US citizen filing.  

Price

The prices for accounting services vary greatly. While you won’t want to choose an accountant based solely on his low prices, you do want to pick one who provides ROI for his services. Go with an accountant whose price is fair for what he is offering. Ask people in businesses of similar size or in similar industries what they are paying for accounting services and what that price includes. Some accountants will charge a smaller monthly fee but will charge extra for one-time projects, like filing your yearly report or Hatzharot Hon (declaration of assets). Others will charge a higher monthly fee that includes all those reports. Also check whether the price includes proactive outreach with reminders to take care of paperwork and updates on new laws.

Good vibes

As with any service-based business, it’s important that you feel comfortable with the accountant who is managing your financial obligations to the Israeli government. Choose someone with a vibe that you connect with, who you can ask questions to without feeling like you are a bother and who explains things clearly and patiently. Ideally, you will have a long-term relationship with your accountant, so choose someone who is pleasant to deal with and will contribute to the success of your business.

Categories
Employment in Israel

Juggling Kids’ Schedules and Work – How Do Israelis Do It?

It might seem like one of the biggest mysteries of life in Israel: How do Israelis manage to work full-time when kids have such short days at school and so many things are scheduled during work hours? It’s not actually such a huge mystery; here’s how they do it.

After-school programs

Official school days are very short in most schools, but extracurricular activities often make up the difference. Younger children can be enrolled in “Tzaharon,” an afternoon program that provides hot lunch, activities and possibly even homework help. These programs generally run until 4 or 5 PM, and some of them are open on certain school vacation days. Tzaharon usually goes up to third grade, so older kids don’t have access to them. Instead, they may be enrolled in Chugim (extracurriculars) like sports, art, drama, English lessons and more. Chugim may be run by the schools or they may be at other locations, requiring transportation to be arranged. 

Staying home alone

In Israel, kids who are in fourth grade and above are considered old enough to stay home alone. Even younger kids can be home without parents if there are older children in the house who are responsible. Parents leave a meal that can be easily heated up in the microwave and kids serve themselves lunch. After lunch, kids will relax at home or walk to nearby Chugim.

Long and short work days

Parents in a dual-income household will often switch off coming home early (by 4 PM) with their spouse. Each parent will work some short days and make up those hours either by staying late at the office on other days, or by working from home in the evening after the kids go to bed. 

Grandparents and babysitters

Israelis tend to rely heavily on relatives, especially grandparents, to help out in the early evenings and on days when kids are on vacation but work is not. Those who don’t have grandparents who live nearby and are available for childcare will hire babysitters for hours between when kids come home and when the parents arrive. Often neighbors will help each other out as well, especially for a one-time issue or when the arrangement goes both ways.

Vacation and sick days

It’s expected that some of an employee’s vacation and sick days will be used for childcare. When kids are sick or have doctor’s appointments, sick days can be used to cover them. Taking off on days like Purim or Erev Chag because kids are home is accepted practice in most workplaces (with proper notice and permission given, of course). At the end of August, when there are almost no childcare options available other than babysitters, many parents choose to take time off. They often choose to travel or vacation in Israel during that time, although prices are higher that time of year. If they stay home, parents usually split the vacation days with their spouse, so there’s always one parent at work and one at home with the kids.

Israelis are family-minded in general, so many workplaces are understanding about the need to attend violin recitals, gan parties, army ceremonies and school plays. Israelis will definitely ask to leave early on days when these events are taking place and these requests are often granted.

Prioritizing

Israeli parents know they can’t do it all; they choose what to skimp on and what takes priority. They may buy processed food for their kids’ lunch or throw ingredients into a crockpot to cook on their own. They might relegate trips to the playground to the weekend or do laundry haphazardly. Each family will choose what’s important to them and what to let go of. As long as kids are healthy and happy, compromises can be made in other areas, so parents can work full-time and provide financially. 

Categories
Business in Israel

How to Determine Your Hourly Rate

When you operate a service-providing small business, one of the first things you need to do is determine your hourly rate. This can be a scary proposition, since charging too little means you’re not making what you’re worth and charging too much may price you out of the market. Luckily, there are guidelines that will help you decide how much to charge per hour.

Compare to a job

The first question to ask yourself when setting your prices is how much you would make in your industry as an employee. Next, consider that when you freelance, you are responsible for paying your own vacation and sick days, Bituach Leumi and pension. Your hourly rate must reflect these extra expenses.

Accepted wisdom in Israel is that you need to charge the hourly rate you would get as an employee multiplied by 1.4.

If you have to rent space, pay another worker or purchase items, add these to the amount you charge as well.

The going rate

The truth is that the going rate is a bit of a misnomer, because there will always be service providers who are more expensive and those that will be less expensive. Sometimes this will be because they are more experienced or operate in a location or industry where the market is different. But often it is just because this is what they have decided to charge. However, it’s still a good idea to find out what others are charging so you can get an idea of how to set your prices.

Start by asking people in the industry how much they charge per hour. Not everyone will want to provide you with this information, but Israelis tend to be fairly forthcoming when discussing money and you only need a few to get an idea of the range. 

You can also ask people in your target market what they would be willing to pay for the service you are providing. If they have already used this particular service, they are likely more knowledgeable on how much it should cost. For instance, someone might tell you that they previously worked with a translator who charged a certain amount, but they would be willing to pay more for someone more experienced. Or you might find out that they felt they were overcharged by the translator they worked with and would pay less the second time around.

Now that you know what the range is, you can determine your price. If you’re just starting out, you may want to position yourself on the lower end, but if you have lots of experience, you should choose a price that’s higher. 

Your rate is less important than your work

It’s important to remember that when you’re the best fit for a client, they will be much less concerned about your pricing. Say a client is looking for a graphic designer with a specific style and you have that exact touch. In your initial phone call, there’s an immediate click, where you each have a deep understanding of the other. You quote your price and it’s slightly more expensive than a different designer they spoke to. But that designer didn’t really get them and their style wasn’t quite what they were looking for. What are the chances that the client will choose to work with the less expensive designer?

Another thing to remember is that if a client quibbles about your price, they are not the right client for you. Even if they are convinced to work with you, they will never be satisfied because they think that they are overpaying. The right client is the one who thinks you are worth what you are charging and appreciates the skills and knowledge you bring to the table. 

Consider a retainer

It might be time to dump the hourly rate entirely! If you have clients who want you to be available to complete tasks and don’t really care how long it takes you, you can charge them a monthly retainer. This means that they pay you the same amount each month and it covers all the work done during that month. There might be months where you get paid for doing very little and other months where you work for every shekel and then some. 

The advantage of this system is that you have a steadier income. Clients like it because it makes paying you easier and they know you are available to them whenever necessary. Of course, this opens you up to situations where you might be taken advantage of and boundaries have to be very clear so that doesn’t happen.

Negotiating

Many Israelis have a “shuk mentality” which they bring to business transactions. They want to feel like they are getting a good deal and will negotiate until they get it. You can deal with this in a number of ways:

  • Refuse to negotiate and only work with clients who are prepared to pay the rate you ask for
  • Always quote slightly higher than you want and negotiate down to the amount you really want
  • Quote a price that includes a built-in discount and let the client know they are getting the lower price because they are a friend of a friend, you have a special promotion this month, you really like them etc.

Rates are not static

The rate you charge when you start out should not be the same rate you charge 10 years down the line. Raise your prices periodically, as you gain more experience and provide a higher quality service. Prices in the industry also tend to rise, so keep your finger on the pulse and update your own prices accordingly.

You can either raise your prices for all your clients, or raise it for new clients and allow pre-existing clients to continue paying the old rate, at least for a while. When raising prices for existing clients, unapologetically announce that your rates have gone up. If they are loyal, satisfied customers, they will likely accept the new rates without issue.

You can also increase your income by becoming more efficient. If it used to take you an hour to write a 500 word article, you can reduce that to half an hour. You can do that by improving your own skills, using AI to help you or by more effective task management. Cutting down on time for admin tasks, keeping organized records and figuring out the best times of day to accomplish certain jobs can speed up your processes and bring in more income.

There are only 24 hours in a day

One of the issues with an hourly rate is that you’re limited in how much you can work. There are, after all, only 24 hours in a day and you have to sleep sometime. Of course, you can outsource work, but your outsourcers are also only able to work a certain amount of hours. The most efficient ways to increase your income are to increase your rates or switch to a retainer model.

For more information on running a small business in Israel, see Business Culture in Israel.

Categories
Employment in Israel

How to Collect Unemployment in Israel

It can be scary to find yourself suddenly without a job, but unemployment benefits are there to help tide you over and provide some income while you look for your next opportunity. Here’s what you need to know about collecting unemployment in Israel.

Eligibility for unemployment

You are eligible for unemployment if you meet these criteria:

  • An Israeli citizen
  • At least 20 years old (or meet the requirement for an exception, such as completion of army service or two years of National Service)
  • Below the age of 67
  • Have worked for a qualifying period. An employee who received a monthly salary must have worked 360 days out of the 540 days before becoming unemployed. A worker with a daily salary must have worked 300 days. Paid vacation days, sick days and maternity leave are all considered work days for this purpose.
  • Registered as unemployed at the Israeli Employment Service (Lishkat Taasukah). Sign up as soon as possible after you lose your job.
  • Willing to look into jobs or participate in job training provided by the Employment Service 

You are not eligible for unemployment if:

  • You are self-employed and have closed your business (unless you are a tour guide, lecturer or artist, in which case you might be eligible)
  • You are a controlling shareholder in a company, even if you are also a salaried worker
  • You are a member of a kibbutz or cooperative settlement, unless you are employed as a salaried worker (in the kibbutz/settlement or externally)
  • You are receiving any of these payments: maternity pay, workers comp, vacation day payout, payment for reserve duty in the IDF

If you were fired, your eligibility for unemployment begins immediately. If you quit, then your eligibility for unemployment only starts after 90 days unless your quitting was seen as justified. Justified reasons include worsening work conditions, health issues, a change in commuting distance or sexual harassment in the workplace.

Applying for unemployment

In order to apply for unemployment, you will need these forms from your employer: Form 100, which includes your income from the past 12 months and a form which states the date and reason of the end of your employment. 

If you have these forms ready right away, submit them here along with your application for unemployment. If you don’t have the forms yet, you can sign up immediately with Lishkat Taasukah and apply for payments later on.

Once you have applied online, you must appear at the Lishkat Taasukah within 14 days. You will need to bring ID: your Teudat Zehut, passport or driver’s license. If you are unable to work due to a medical condition, bring paperwork to back that up. Also bring an updated CV, certificates of education and proof of professional licenses. 

The unemployment office will interview you in that first meeting and let you know how often and on what days you need to sign in at the office on a regular basis. There are some exceptions where individuals are not required to physically come into the office and there are times when all sign-ins are done virtually, such as during Iron Swords or during Covid.

Length of unemployment benefits

The length of unemployment benefits varies depending on age and number of dependents. For instance, if you are under 25 and have 3 dependents, you will get unemployment for 138 days. If you are over 45 with the same number of dependents, unemployment will be paid to you for 175 days. The length and eligibility for unemployment changes if you submit more than one claim in a two year period, or more than one in a four year period if you are under 40 years old.

Discharged soldiers and those who have completed National Service are eligible for up to 70 days of unemployment. Participants in vocational training are paid during their studies for up to 138 days.

Ending unemployment benefits

Once you have finished collecting for the amount you are eligible for, payments will stop automatically. If you still haven’t found a job, you might be eligible for income support from Bituach Leumi.

If you find a job before the unemployment benefits run out, you must inform Bituach Leumi and your payments will be stopped. In a situation in which you were on unpaid leave from your job, if you went back to work at the same business, your employer is responsible for informing Bituach Leumi that you have returned to your job.

Looking for a new job

Lishkat Taasukah will try to help you find a job, but their efforts are not often successful. We can’t find you a job, but we can give you advice about looking for one. Read these articles for guidance on looking for a job:

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Bringing Your Existing Job to Israel Employment in Israel

Finding Remote Work from Home Jobs in Israel

Are you dreaming of a flexible job that doesn’t require commuting? Do you have a situation which makes it hard to work outside the house? It sounds like you’re a perfect candidate for a remote work from home job!

The good news is that Covid has brought about a permanent change in the workplace, and working from home is more popular than ever before. However, many workplaces have integrated work from home into their existing work policies, offering hybrid jobs where you can work from home once or twice a week, but are expected to come into the office on the other days.

Jobs that are entirely work from home do exist in Israel, especially in industries in which face-to-face interactions are less important and technology can be relied on heavily. Some of the industries in which work from home is more popular include:

  • Online teaching
  • Editing and proofreading
  • Graphic design
  • Digital marketing
  • Data entry
  • Virtual assistant/office manager
  • Grant writing
  • Translation

In addition to looking for jobs in industries which lend themselves to work from home, another way to find a remote job is by applying to work for a small business in any industry. Small businesses often do not have office space and equipment for employees, so they prefer to hire people who will work from their own home office. Working in a small business may also offer other advantages, such as more diverse job responsibilities and the excitement of building something from the ground up.

Now that technology has turned the world into one big global village, your remote work from home job doesn’t have to be for an Israeli company. Many overseas companies want to hire people in Israel, due to the large pool of talent in the country as well as the attractive costs. In many cases, it’s possible to make aliyah and bring your job on aliyah too. You continue working for the same company from your home office in Israel instead of from the office in your previous location. 

If you’re already in Israel, you can look for job listings for remote positions which are posted on social media platforms and online job search sites. For more advice on how to find these types of jobs, see How to Find US Companies Open to Employing Israelis.

If fully remote work and maximum flexibility are crucial to your wellbeing, consider freelancing in your chosen profession. When you freelance, your boss can’t suddenly decide employees must come into the office, you set your own hours and you decide how much work to take on. On the other hand, you have to drum up business and have to manage clients, marketing, admin and finances. 

Remember that a remote work relationship, whether for an Israeli company, an overseas firm or in a freelance capacity, is first and foremost based on trust. Your employer or client needs to trust that you are doing high-quality work in a timely manner, that you are available for calls or meetings and that you have their best interests at heart. Once trust is built, you can maintain a long and fruitful working relationship without ever leaving your house to go to work.

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Employment in Israel

How to Ask for a Raise in Israel

Asking for a raise can be a scary proposition – it means putting yourself out there and possibly facing rejection. Although there are some companies in which raises are given automatically after a certain amount of time, in most cases, you will only get a raise if you ask for it. Israel is a country of negotiations (think Middle Eastern shuk), so it’s important to approach salary discussions with the right strategy.

When to ask for a raise

There are a number of times where it’s expected that an employee will ask for a raise. One of these is during an annual or semi-annual review. If your company holds these at pre-arranged times, this is the perfect opportunity to request a salary hike. It’s also common to ask for a raise after you’ve been at the company for a year. If annual reviews take place before you have been there for 12 months, you might want to wait until the end of your year before bringing up the subject.

If you are going on maternity leave, it’s to your benefit to get a raise a few months beforehand, as your Bituach Leumi payments are based on the last three salaries before you give birth. If there’s an opportune time to ask in the first few months of pregnancy, it’s certainly a good idea.

Another time to ask for a raise is when you’ve gotten another offer but would consider staying at the current company if they matched it. If you have another offer on the table, you are in a strong negotiating position. You might even be able to get a slightly higher salary than the other employer is offering. This is a good tactic if you enjoy working for your current employer and would happily stay at a higher salary.

Sometimes employers offer a new title with greater responsibility but “forget” to offer a salary raise to go with it. If this happens to you, explain to your bosses that you would love to take on the new position on the condition that you are compensated for it. You can also proactively ask for a new title and the salary that goes with it. Companies often prefer to promote from within and this is a good way to advance your career and raise your salary at the same time.

List your responsibilities and accomplishments

You might want a raise because the cost of living has gone up and your bank account is suffering, but this is not what matters to your employer. They need to be convinced that you are a valuable employee and that it’s worth it to them to keep you happy for the long-term. 

Don’t assume that your manager, the CEO or HR know what you have been doing at work. There are often tasks that no one notices precisely because they are getting done. Sometimes teamwork hides the part that you took in a particular project. Someone else may have assigned you to tasks that they don’t even realize you are responsible for. 

Before the meeting, make a clear list of your responsibilities and what you have accomplished for each one and present these to state your case.

Mention the industry standard

Let your employer know that you have done research and understand that your current salary is below the industry standard. Doing this serves as a hint that you are looking elsewhere and that if you are not satisfied with your salary, you won’t necessarily stay in the job. This gives your manager a reason to help you get paid what you deserve.

Don’t mention other employee’s salaries. Employers don’t like to hear that their employees are comparing salaries and using this information to pressure them. If you know what other people at the company are making, that info can help you figure out what to ask for, but keep the fact that you know this to yourself. 

What to ask for

If you’ve been underpaid for a while, you may feel that you deserve a huge salary hike, but on the other hand, you know that the likelihood of receiving it is pretty low. You’re better off asking for 5-8% more than you are currently making, since this is considered reasonable.

Always ask for more than you actually want so they can negotiate you down. Your employer is unlikely to agree to the first raise you propose, so start higher and let them offer you a little less.

What to do if a raise isn’t on the table

If you’ve asked for a raise and been told that it’s just not possible, that doesn’t necessarily mean that you can’t improve your work conditions. Request other perks such as more vacation days, a Keren Hishtalmut, more flexibility or the ability to work remotely. If your bosses value your work and want you to stay but don’t have the budget for a raise, they may be willing to consider other options that will give you an incentive to continue to work for them.

If your raise is denied, you can also consider leaving to a different company. Sometimes the only way to raise your salary is by starting a new job. Your negotiating power is always stronger right before you sign a contract, so use that time to ask for a higher salary than you’re making now. It can be scary to think about looking for a new job when you have one you’re already happy with, but there are jobs out there that have other advantages beyond paying better. They might be closer to home, have a better office culture, provide you with more challenging or interesting work or offer more flexibility. In any case, it doesn’t hurt to look around. You can always decide to stay where you are currently if you don’t find something better.

For more tips on succeeding in your career, download Your Route to Career Success in Israel.

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Aliyah Employment in Israel

Working for a UK Company from Israel

The days when everybody had to be in the office all day every day have thankfully ended. Nowadays, many companies understand that remote work can be productive for the company while being convenient for the worker. Companies have even begun to be more open to having people work for them who live in a different country.

If you’ve made aliyah from the UK or a different English-speaking country, or if you are planning your aliyah right now, working for a UK company from Israel might be the right career choice for you. It allows you to easily work in English, in a work culture you are more familiar with and helps you transition smoothly if you are a new immigrant.

When you work in Israel, you are required to report your salary and pay taxes to the Israeli government. This is true regardless of where the company you work for is situated. You don’t want to pay double taxes, so you need to make sure that the HMRC (the UK’s tax authority) knows that you are no longer a UK-resident. You do this by submitting Form P85 and attaching a Form P45 if you were employed during the current tax year. (More information about tax considerations when making aliyah from the UK can be found on the Nefesh B’Nefesh website.)

Now that you’ve gotten UK taxes out of the way, you have to decide how you will report your income in Israel. This can be accomplished in a number of ways, including becoming an employee of an Israeli Employer of Record service or opening an Israeli business.

Employees of Israeli companies get a payslip each month and all necessary deductions (income tax, Bituach Leumi, pension deposits and health tax) are automatically withheld. Business owners report their income bi-monthly by providing the government with receipts for payments made. Then they pay all taxes and legally required payments directly to the relevant government offices. If their income is above 120,000 NIS (as of 2024), they are also required to collect and pay VAT – although in many cases it will be at 0%. (If they happen to be American citizens, the US government will also require them to pay 15% of their income to Social Security.)

Reasons to choose an EOR

Working through an Employer of Record service provides these advantages:

  • Less paperwork – You let the EOR know how much to bill the UK company for your services each month and they take care of the rest. You don’t need to file reports, report income or make payments yourself.
  • No need to exchange currency – If you’re being paid in pounds but need shekels to live in Israel, an EOR will exchange your salary for you.
  • No accounting costs – Business owners need to hire accountants or tax consultants to assist with filing reports which are often too complex to do on your own, especially if you aren’t a native Hebrew speaker.
  • Get paid the same time each month – The EOR will send an invoice to the company well before the date your salary gets deposited, so you know when to expect your paycheck.
  • More transparency – What you see is what you get. Your pay stub shows exactly how much money is going into your bank account, so you never have to guess how much your take home pay is. This is also useful when dealing with banks and mortgages, since you can easily show what your income is.

Reasons to open a business

You may want to consider opening a business for these reasons:

  • No fees to an EOR – Employer of Record services charge a fee for their services and you will save this amount if you have your own business. It’s important to calculate whether this savings is more or less than your accounting fees.
  • Ability to scale and expand – If you open a business, you can take on additional clients easily and smoothly transition away from your UK job at a later date. Although you can use an EOR for more than one client, this will only work if you are providing services but not if you are selling a product.

Personalized advice

Everybody’s situation is different and there may be tax and financial implications that you haven’t considered, so it is recommended that you get personalized advice that takes into account your career goals, lifestyle and income. 

We offer consultations with unbiased advice on the best way for you to structure your career. Write to info@route38.co.il to book a time to speak.

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Employment in Israel

Professional Courses to Jumpstart Your Career in Israel

Career advancement or a complete career reset are good reasons to take professional courses. Government organizations and educational institutions have figured out that many olim are in the market for courses in English that will jumpstart their career and help them accomplish their professional goals. Course topics are varied and cater to lots of different interests. Here are some of the more popular ones.

Graphic design

The ability to create aesthetically pleasing graphics is useful in many professions, from educator to marketer. Even if you’re not artistically inclined, technology makes graphic design attainable. Canva is a popular online program for creating graphics for all sorts of purposes. It’s not difficult to use but you can learn tips and tricks by taking a course. High-level courses for future graphic designers are also available.

AI

Artificial Intelligence is taking over the world with its abilities to generate texts, images and videos that can be used for presentations, marketing materials, educational content and more. As with any tool, if you know how to use it well the results will be better. A course in AI will teach you to harness the potential of the various popular AI tools and allow you to accomplish work tasks more quickly and effectively.

Programming and cyber

Hi-tech is one of the most lucrative career paths in Israel and many jobs in this field don’t require extensive knowledge of Hebrew. Many olim choose to retrain in this field after they have made aliyah. Courses vary from beginner level to more advanced topics, to prepare you for a career in a hi-tech company in Israel. 

Digital marketing 

The field of digital marketing is popular with olim for good reason. Work can be done exclusively in English and often involves interaction with customers and clients overseas. Additionally, it’s versatile – there are a number of specialties such as SEO (search engine optimization) and PPC (pay per click) for the more technically-minded, and content writing, email marketing and social media management for the wordsmiths. Courses in these topics are useful for marketers as well as for small business owners who market their own products or services.

English teaching

Whether you were a teacher before aliyah or have not taught a day in your life, you can become certified as an English teacher through an Israeli teaching college. If you were a licensed teacher, you can’t simply transfer your teaching license to Israel, since you are required to have an Israeli teaching certificate (Teudat Horaah) and have studied teaching English as a second language. Since there is a large demand for English teachers in the country, there are subsidies available for this training either directly through the colleges or through the Ministry of Aliyah and Integration. More information on training to be an English teacher is available in this handbook from the Ministry of Education.

Technical writing

Technical writing can be a lucrative career if you have a flair for writing. It can be a hard field to break into, but once you get that first job and gain experience, there are more jobs available. Technical writing courses focus on the writing aspect, but you’ll have an advantage if you are proficient in various software packages and have a background in programming. Nefesh B’Nefesh has a list of companies which provide training courses in technical writing.

Listings of professional courses in English in Israel

  • Nefesh B’Nefesh partners with multiple organizations to provide professional courses that are relevant for olim. The course listings change periodically, so it’s worth checking back every once in a while.
  • Mati and the Ministry of Aliyah and Integration offer free or inexpensive courses in topics such as digital marketing for new immigrants (up to 10 years in the country).
  • Compuskills offers courses in graphic design, interior design, copywriting, editing, photography and more.
  • Design-related courses are available through Design Alive.
  • Check out this list of Israeli universities which offer degree programs in English.

Your career isn’t set in stone

In our parents’ generation, it seems like most people picked a profession and stuck with it until retirement, sometimes even working for the same employer for most of their professional careers. But these days, upward and sideways mobility is much more common, whether it’s upskilling in the same field, switching industries or getting a job with a different company to advance in title and salary. Taking professional courses gives you the opportunity to take your career to the next level, whether in the industry you’re already working in or an entirely new one.

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Employment in Israel

How to Find a Part-Time Job in Israel

Full-time work may be standard in many industries in Israel, but that doesn’t mean that everyone with a job is working 100% at their position.

Part-time work might be the best solution for:

  • Students who work and study simultaneously 
  • Parents and people with other family obligations who want a flexible schedule
  • Business owners who want to devote time to their businesses while getting a steady paycheck
  • People with other income sources
  • Those with disabilities which preclude full-time work

Industries that lend themselves to part-time work

While some industries seem to be hiring almost exclusively for full-time, there are industries in which part-time is much more common. If you know that you will want to work part-time for the long-term, it’s worth training in one of these fields.

Some examples of fields in which part-time work can be found:

  • Education
  • Nursing
  • Retail
  • Social work
  • Office management
  • Sales

The industries in which it’s harder to find part-time jobs include:

  • Hi-tech
  • Military 
  • Finance

Keep in mind that in some industries, especially those regulated by the government, full-time hours may be less than the usual 42 hours a week. The pay scale will likely be lower as well, but these jobs can be a good solution for maintaining work-life balance and often come with perks that are also worth money.

How to find part-time job listings

Job boards such as Nefesh B’Nefesh (in English) and JobMaster (in Hebrew) have a special section devoted to part-time job listings. Janglo allows you to filter by part-time work once you have chosen a category. There’s even a Facebook group dedicated specifically to part time jobs in Israel.

Unfortunately, a lot of part-time jobs are only listed among full-time jobs, so you will have to spend some time weeding through job listings to find the ones that are relevant. If searching in Hebrew, look for the words Misra Chelkit. If you’re a student, also look for Misrat Studentim.

Pitfalls of part-time work

When taking a part-time job, it’s important to check that the salary offered is commensurate with the average full-time salary for that same job. If you are working 50%, you obviously don’t want to be receiving a salary for a 30% position. 

A common issue with part-time jobs is that the workload is often greater than the amount of hours you have committed to. This can leave you perpetually stressed and you might find yourself working extra hours for lower pay. This often happens without malice and requires you to set firm boundaries and stick to them. When a new task is assigned, you might have to point out what’s already on your plate and how long that will take. Let the employer choose which tasks can be moved to lower priority and set deadlines that are acceptable to both of you and respect your limited hours.

When you take a part-time job, keep in mind that this type of job will often come with limited opportunities for advancement. You are less likely to be promoted or receive a salary raise if you aren’t working full-time. Of course, that might be all right for you at this current time and you can always switch to a full-time job later on if you want to be promoted.

Creating your own part-time position

If you’re having trouble finding part-time work in your field or want to avoid the pitfalls of this type of position, consider creating your own part-time position by opening a business. When you have your own business, you can choose your hours, decide which clients to work with and name your price. Of course, there is the danger of falling into the trap of working non-stop in your business, but if work-life balance is important to you, it’s possible to structure your business such that you earn enough while enjoying a flexible schedule.

Another option is to apply for jobs that say they are full-time and ask for a reduction in hours. This will not always work and can be time-consuming with little ROI (return on investment), but you only need one employer to agree to the arrangement. It is likely easier to convince an employer to reduce your in-office hours and make up hours in the evening, from home. This is an arrangement many parents use in order to work full-time hours but still be home during the critical hours of dinner and bedtime. 

Is there still a lot you don’t know about the Israeli workforce? Download Your Route to Career Success in Israel for a detailed account of everything you need to know about finding and keeping a job, opening a business and your rights and obligations as a worker.

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Employment in Israel

Are Israeli Workplaces Family-Friendly?

Israeli workplaces are not monolithic, so in a lot of ways this is an unfair question. Some workplaces are extremely family-friendly and many are much less so. This is not a difference between big or small companies or whether the company is a subsidiary of a foreign company or entirely Israeli. It’s really about the management and the policies that are set forth by the top-level managers. The only way to know if a company is family-friendly is to ask questions in the interview, listen to the way the interviewer talks about the work culture and chat with current employees.

However, Israeli society as a whole is pretty family-oriented and that spills into the workplace, especially since there are laws that delineate the rights of employees in various family situations.

Pregnancy

Rights for pregnant women in the workplace actually start even before pregnancy if a woman is undergoing fertility treatments. She is legally able to use sick days and up to 40 hours a year for appointments, and can’t be fired or demoted while undergoing treatment.

Discrimination against pregnant women in the hiring process is illegal, and a pregnant woman cannot be fired unless the company can prove that the firing is not related to her pregnancy (such as company-wide layoffs). A pregnant woman cannot be required to work overtime and can take up to 40 hours off for appointments (if she’s a full-time employee).

For more information on the rights of pregnant women in the workplace, see Benefits for Pregnant Women.

Maternity leave

A woman who has worked for a company for more than a year is entitled to 26 weeks of maternity leave, during which the company must hold her job and can’t fire or demote her. Some of this maternity leave is paid (by Bituach Leumi).  A woman who has worked less than 12 months is eligible for 15 weeks, and some or all of this maternity leave is paid. Maternity leave benefits also apply in the case of adoption or surrogacy. 

Read more about maternity leave and maternity pay.

Vacation days for new fathers

New fathers are legally allowed to take off the day of the birth as well as five calendar days thereafter. The first three days are considered vacation days, while the other two days count as sick days. The day of the bris (if the baby is a boy) is not a legally required vacation day, but employers tend to be understanding of the need for taking this day off.

Paternity leave

A man may split the parenting leave with the mother of his child beginning from six weeks after the birth. He can also take off a week in parallel to her maternity leave, in exchange for one week less of maternity payment.

Parenting hours

A new mother who works full time is eligible for a parenting hour each day, so she works one hour less for the first four months after her return from maternity leave. This legal right applies even if she started work in a new company immediately after returning from maternity leave. This hour can be split between both parents, if the mother agrees to give up some of her hours. 

The parenting hour is usually taken at the beginning or end of the day, but if the employer has no reasonable objection, it can also be taken at a different time of day. It can be used for pumping and the employer must provide a suitable place for a woman to pump if she so chooses. 

Vacation days

Aside from national holidays, all employees have legally mandated vacation days. The minimum number of vacation days for a full-time job is 12, but an employee contract can include a larger number of days. These days must be requested from the employer and it is in their discretion to approve or not approve them. Additionally, the employer is within their rights to declare a vacation day for the entire office and deduct that day from each employee’s annual leave. 

The time to ask for more vacation days is in contract negotiations before accepting a job or at the annual review some companies hold. It may be easier to get an employer to agree to more vacation days as opposed to a salary increase.

Sick days for family members

A full-time employee is legally entitled to 18 days of sick leave and some of these days can be used in order to care for sick family members. The first day is unpaid leave unless the employee’s contract states otherwise. 

Since small children tend to get sick pretty often, parents often split the sick days so that neither employee uses up their sick days too quickly and to stay in the good graces of their employers. If working from home is an option, that can often be a good alternative to taking a sick day for a child.

See Vacation Days and Sick Days in Israel for more details on this topic.

Taking off for family simchas

In most jobs, there is no legal mandate regarding taking vacation days for weddings, bar/bat mitzvahs and other family simchas. However, managers are usually willing to allow these vacation days, even if slightly inconvenient to the business. Since these events are planned far in advance, it’s best to give lots of notice about requesting these days off. 

Shiva leave

Jewish employees who are sitting shiva and have worked at their place of employment for at least three months are entitled to seven paid days off. Non-Jewish employees are entitled to days of mourning for first-degree relatives according to the customs of their religion, up to seven days. (In some industries, the three-month employment condition is not necessary.)

Army ceremonies, school plays and other miscellaneous family events

Israeli society is rife with events that take place during the work day and are important for family members to attend. Vacation for these types of events is at the discretion of the employer. Some employers will be more generous about these days than others, and they may be more likely to grant days or hours off if the event is the type that they themselves would want to attend.

Balancing work and family

A full-time job in Israel is 42 hours a week in most industries. Israelis work hard, but they also prioritize family in a very big way. Balancing work and family is made easier by the family-friendly laws that the government has passed in order to protect employees. Workplaces can choose to stick exactly to the letter of the law or they can implement policies which promote work-family balance, such as additional vacation days and sick days paid from day one. Some companies go beyond contractual obligations and provide family-friendly services, such as summer camps for kids, family fun days, unlimited vacation days and gifts for simchas. 

When choosing a place of employment, if work-life balance is important to you, check out the official company policies and speak to current and past employees to find out what the atmosphere is at the workplace. If you’re a parent, see whether there are lots of other parents at the company or whether you will be the only one. If you can, ask the parents whether they view the company as family-friendly, what they like and what they would change about balancing work and family at this place of employment.

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Aliyah Employment in Israel

Switching Careers after Aliyah

If you’ve asked an immigrant to Israel what they do professionally, you’ve probably had more than one person respond with something like, “Well, in the United States I was a shul rabbi and here I am a salesperson” or “I used to be a lawyer and now I’m a freelance graphic designer.”

Of course, there are many people who have stayed in the same career after making aliyah and some have even stayed in the same job. But there are also plenty of olim who have made career switches either for pragmatic reasons or because they took advantage of the opportunity to change things up while they were busy shaking up the rest of their lives.

Wondering if you should switch careers after aliyah? Here are some reasons to consider it:

  • Your current career doesn’t exist in Israel. If you like your field but your specific niche isn’t relevant in Israel, you can change course slightly, or you can choose to go in a completely new direction.
  • Your career exists but will require extensive retraining or relicensing. Lawyers, doctors, nurses and accountants may be in this position. You will need to consider how complicated the process is and how important it is for you to stay in the same field.
  • Your current career is lucrative in your home country but not in Israel. For instance, medicine is generally better paying in the United States than in Israel.
  • Hebrew is required for your current career and you are far from fluent. If this is the case, consider switching to a job in which English is one of the job requirements, such as international marketing, sales to overseas clients, teaching English or hi-tech. If you love what you are doing but can’t do it for an Israeli employer, see if you can bring your existing job with you on aliyah.
  • Your career is on its way to becoming obsolete. If you’re young and have many more years to work in your profession, it makes sense to work in a field where there is a long-term future. Technology is phasing out certain careers, like secretary, medical diagnostician, content writer, investment manager and construction worker. 
  • You don’t actually like your career. Whether you never liked it or don’t like it anymore, this is a really good reason to switch it up. You’re already making sweeping changes to your lifestyle – what’s one more?
  • You’ve always dreamed of doing something different. Societal pressure, student loans and day school tuition costs may have pointed you in a direction that, while satisfying enough, isn’t what you really dream of doing. Now is your opportunity to see whether that dream can work in Israel, where both salaries and expenses are very different.

How to switch careers

It’s not always easy to break into a new field in which you have no experience, but there are some tips that can help you do this:

  • Take professional courses or learn independently. You will want to show employers in Israel that you have the necessary skills to work in your new field, so learning as much as possible is helpful. A certificate of completion from a well-known institution can go a long way.
  • Emphasize skills above experience in your CV. Since your work experience will not demonstrate why you will excel at the jobs you’re applying for, list your skills and be specific about what you know how to do.
  • Network with people in the new field. Networking is one of the best ways to get hired in Israel and it is especially useful if you don’t have the requisite experience. If someone vouches for you, there’s a greater chance you will be considered for a position.
  • Apply for work in small companies. Smaller companies may be willing to take a chance based on intuition or a personal click, where bigger companies will just throw a CV into the “no” pile without much forethought.
  • Open your own business. Now you don’t have to convince an employer that you are qualified, but you will have to convince clients that you are up to the task. Those first few clients may take a while to get, but once you have some experience under your belt, there will be less need to prove yourself.

Getting the most out of your new career

Whether you’ve opted to become an employee in a new field or have decided to open a business, there’s a lot to learn about how the workplace functions in Israel. You should be knowledgeable about employee rights and obligations, company and business culture, how taxes and pension funds are paid and how to deal with specific situations like holding down two jobs or filing for maternity pay. All this information and more is available in our free ebook, Your Route to Career Success in Israel. Wishing you much success in your career and in your aliyah.

Categories
Bringing Your Existing Job to Israel

Getting Paid as a 1099 While Living in Israel

Question: I’ve been working as a 1099 (independent contractor) for a company in the US and paying taxes in Israel as an Osek Murshe. Recently, an employee of this same company who wants to make aliyah started discussions about working through an Employer of Record service. Now my company is asking me if it’s better for them and for me to switch to getting paid through an EOR.

How an EOR benefits the American company

Your first question is about what the best way is for an American company to pay an Israeli. As you mentioned, there are two ways this can be done. A W-2 is not a good option, since that opens the entity to tax liability in Israel, so that leaves 1099 or EOR.

A 1099 is a perfectly legal solution for the company, but it has some disadvantages. Firstly, it creates a looser structure in which you are not an integral part of the company. Secondly, it requires you to pay 15% of your income to US Social Security (assuming you are an American citizen)  and VAT (Value Added Tax) to the Israeli government, leading to your either asking for higher compensation or being resentful that their salary doesn’t adequately cover this payment.

An EOR, on the other hand, alleviates the need for Social Security payments and maintains a structure more similar to an employer-employee relationship. There is a fee to use these services, but it may very well be less expensive than Social Security payments. It allows both you and the business to see yourself as a part of the company and not an outside contractor, despite the fact that you are technically employed by the EOR. 

How an EOR benefits the worker

As mentioned above, one big advantage of getting paid through an Employer of Record service is that you are not considered self-employed, so you are not required to pay US Social Security. Although paying into Social Security may seem like a good idea, since you will receive payments upon retirement, that’s only helpful if you can live on your salary after deducting Social Security as well as Bituach Leumi, income tax, pension and health tax (all required by Israeli law).

A second advantage of working through an EOR is that you don’t have the headache and expense of running a business. You don’t have to issue receipts or report your income to the government. You don’t have to pay VAT and you don’t need to hire an accountant to make sure you are compliant with bi-monthly reporting and Hatzharat Hon (a report of all your assets, required shortly after you open a business and approximately every 5 years thereafter).

Instead, the company you are working with pays what you are owed into a bank account owned by the EOR. The EOR issues you a salary and automatically deducts all legally required payments, so you receive only the net salary and don’t need to do any reporting or paying. There’s also no need for currency conversion, since that is dealt with by the EOR as well.

What’s the bottom line?

This is an important decision, and you don’t want to make it based on what you read online. Since there can be individual circumstances that affect the bottom line, it’s best to consult with experts in the field who will give you advice based on your income, the job you are doing, your age and other factors. 

You are welcome to book a consultation with us (just email info@route38.co.il) and we promise to give you unbiased guidance and help in making the best choice for your career and financial success.

Categories
Bringing Your Existing Job to Israel

How to Choose an Employer of Record Service

As more olim opt for remote work as a way to make a living in Israel, Employer of Record services have become more popular. EOR services are Israeli employers who hire people to provide services for other companies. 

Here’s an example of how it works:

David, a graphic designer working for a marketing agency in New York wants to make aliyah. His agency doesn’t want to lose his talent, so his bosses agree that he can work remotely from his new home in Jerusalem. David knows that an American company can’t pay a W-2 salary in Israel without incurring tax liability. He could open a freelance business in Israel, but this requires him to deal with paperwork and hire an accountant to assist with reporting to the Israeli government. Worse, it means that he has to pay 15% of his income to US Social Security. David is concerned that after paying Social Security, Bituach Leumi, income tax, health tax and pension, he won’t have enough to live off.

Enter an EOR service. David is now employed by an Israeli company. He receives an Israeli pay stub and all payments are automatically withdrawn before he receives his salary. He is not self-employed, so he doesn’t have to pay Social Security. David’s marketing agency becomes a client of the EOR. Every month they pay the EOR and that company pays David his salary.

Now that David has decided to work through an EOR, he needs to choose a service. Since this is all new for him, he needs some guidance on how to choose a service that will be seamless and financially smart. These are the questions we recommend that he ask:

  1. How responsive is the staff? Customer service is important when choosing any service, but when it comes to the service that’s managing your salary, it’s especially crucial. The EOR should be accessible by email and phone and there should be someone to talk to when you have a question or a problem.
  2. How knowledgeable are they? An EOR should have extensive knowledge of HR and payroll, legal requirements and financial issues. They should also be willing to explain how everything works and have people on staff or who they recommend to help with setting up pension plans or Keren Hishtalmut (study fund).
  3. Does the EOR have an American bank account? American companies understandably find it much easier to pay into US bank accounts and will be more likely to continue this arrangement for the long-term if the process is smooth for them.
  4. How much does it cost? EOR services charge fees for processing payment, so it’s important to find out what the associated costs are. These fees should be compared against other EORs and against the option of opening a freelance file.
     
  5. How do they handle foreign exchange rates? Since your salary will be converted from a foreign currency to Israeli Shekels, what rate are you getting on this exchange and what additional fees are being incurred?
  6. Do they have a proven record of success? An EOR that is extremely new and has very few clients may not have figured out all the kinks yet. It’s better to work with a company that has been doing this for some time and is popular with olim.
  7. Can you trust them with your money and to make the appropriate withholdings and deposits on your behalf? Seek referrals from friends and colleagues who are using the service you are considering.  

More information about how EORs work can be found in our free e-book, Your Route to Career Success in Israel. To find out about Route 38’s Employer of Record services, contact us at info@route38.co.il

Categories
Aliyah Bringing Your Existing Job to Israel

Answering Your American Employer’s Concerns about Working from Israel

You’ve made the decision to make aliyah. You know that your transition will be smoother if you maintain your current job and work remotely from Israel. Maybe you’ve already mentioned this idea to your current employer, but you’ve gotten a lukewarm reception. 

Don’t give up yet!

Your employer’s concerns are likely valid ones, but they are not insurmountable. Come to your next meeting prepared with talking points which address their concerns and give them answers they can live with.

Concerns about productivity

It’s easier to keep track of what employees are doing when they’re in the office next door, but harder to gauge productivity from a distance. If your employer is concerned about productivity, you can start by pointing out that they have not had to doubt your work ethic before. If you previously worked remotely (during Covid, or on specific days), remind them how much you got done then and reiterate that you will work just as hard from your new home in Israel.

You can also suggest apps that help employers track the hours you have worked and the tasks you have accomplished. Suggest some specific apps, such as:

If they’re a low-tech kind of establishment, let them know you would be happy to track hours on a Google spreadsheet which you will share with them, so they have access to it at all times.

Make it clear that you will commit to a specific number of hours and, if they wish, particular work hours. If relevant, suggest that you can be available at times when the rest of the staff is off or asleep, which is extremely useful for routine customer service and for emergencies.

Communication and collaboration

Most jobs require a certain amount of collaboration with colleagues and your employer might be concerned that you will turn into the company’s lone wolf. Luckily, technology has made communication much easier, both for in-house and remote workers. 

Task management software provides you with the ability to be in constant touch with bosses and colleagues. It streamlines processes and stores all communication in one place, so anyone with access can see everything that was said about a specific subject with the click of a button. Popular task management apps include:

Of course, not all communication can be carried out with the written word. Sometimes you need to get on the phone and talk things through. Let your employer know what hours you will be available for calls, including options for calling you outside your usual work hours if you are needed during standard American hours. You can make things easier for them by porting or obtaining an American phone number. 

If your company culture includes lots of meetings, suggest conducting meetings on Zoom or via Google Meet. Virtual meetings are often more efficient than in-person meetings, with less small talk and time waste. These meetings can also be recorded and easily referred to later.

Tax liability

If your employer is knowledgeable or has consulted their lawyer, they might know that hiring an employee in Israel can lead them to being liable for taxes as if they have an office in the country. Understandably, they are likely to balk at taking that kind of risk.

Thankfully, this issue is easily solvable. Employer of Record services such as Route 38 will be your official employer in Israel, paying your salary and deducting all relevant payments, including Bituach Leumi (Israeli National Insurance/Social Security), income tax, health tax and mandatory pension deposits. Your current employer becomes a client of Route 38, sending your salary to their American bank account each month. The American company has no tax liability in Israel, you have a registered employer in the country and there’s no hassle on either side.

Once you have addressed your employer’s concerns about productivity and communication, if they’re stuck on the legal issues, send them this article: How Can a US Company Hire Israeli Employees? 

Additionally, we are happy to speak to them to explain the process, what’s needed from them and related fees. It’s a straightforward system and we have a lot of experience explaining it clearly to companies in the United States. Reach out to us at info@route38.co.il to discuss your situation and see how we can help.

Categories
Employment in Israel

Rights of Miluim Soldiers and their Families in the Workplace

Many Israelis serve in the reserve forces on a regular basis as well as during emergencies. A huge percentage of reservists have served for at least part of Iron Swords, and the IDF is considering lengthening annual reserve duty and extending the maximum age for service.

If you serve in the reserves, it’s important to know your rights and obligations.

Informing your employer about reserve duty

When you receive a draft notice, whether it is a regular call-up or an emergency one (Tzav 8), you are required to let your employer know about it in a timely manner. If you received a notice before you started a new job, you are required to inform the employer within a reasonable amount of time before beginning work.

Salary for miluim service

You are entitled to a salary paid for by Bituach Leumi in exchange for your service in miluim, as follows:

Salary as of 2024Daily salaryMonthly salary
Minimum222.27 NIS6,668 NIS
Maximum1,634.33 NIS49,030 NIS

The salary for an employee is based on the average Bruto (pre-tax) salary for the three months prior to the reserve duty. A business owner’s salary is based on the average revenue for the three months prior to drafting, plus 25%.

Various additional bonuses are given by the army for longer periods of service and these will be taken into account by Bituach Leumi.

Payments for reserve duty in Iron Swords are slightly higher. The minimum (for a soldier who wasn’t working prior to getting called up or was living outside the country at the time) is 310.52 NIS per day or 9,316 NIS per month.

Some soldiers are able to work in between army shifts. If that’s the case for you, you can collect payment both from the army and from your regular job.

If you’re a business owner, you should receive your salary for reserve duty automatically. If the funds were not deposited within three weeks of your release from duty, contact Bituach Leumi. This money is considered part of your annual revenue and income tax, Bituach Leumi and health tax must be paid on it.

Employees are paid after a form is submitted to Bituach Leumi. This form can be submitted by you or by your employer. The employer receives the funds and pays you your salary after withdrawing the usual payments for income tax, Bituach Leumi and health tax.

Additional payments

Your employer is required to continue paying Bituach Leumi, severance and pension during the time you are in reserve duty. Starting in April, Bituach Leumi is reimbursing employers for a portion of this expense.

There are many additional payments which are being awarded to soldiers who served in Iron Swords. If you’re eligible, these payments will be transferred directly to your bank account by Bituach Leumi.

There is additional funding available from Bituach Leumi to those who request it for various other war related expenses such as therapy for family members of soldiers, canceled (non-refundable) vacations, delayed studies, etc.

Protection from firing

Soldiers who serve in miluim for at least two days running (regardless of whether they were called up or volunteered for service) are protected from firing for the 30 days after their service ends. During Iron Swords, this law was expanded to protect soldiers who served for 60 days or more, so they cannot be fired for two months after their return from the army. Even if a soldier was in the process of being fired, this process is stalled by the miluim and the same protection applies.

There are some exceptions to this protection. If a business is closing or laying off workers, if the employee’s position is no longer existent or if there was a major disciplinary issue, the employer can request permission to fire said employee. 

Unused vacation days

If you were unable to use up your vacation days for 2023 because you were in miluim (for at least 5 days), these days are rolled over and can be utilized in the next two years.

Spouse’s vacation days

The spouse of a soldier who served more than 30 days of reserve duty will be eligible for extra vacation days if she has children under 14, a chronic illness and children up to 18, a sick parent or first-degree relative with a disability. 

These days are in addition to the legal or contractual vacation and sick days that the spouse gets from her employer:

  • 31-60 days of miluim – 2 days
  • 61-90 days of miluim – 4 days
  • 91-120 days of miluim – 6 days
  • 121 days or more – 8 days


These days can also be used in hourly increments, if the employer agrees, in order for the spouse to take care of errands and appointments which can’t be done outside of work hours.

In addition, spouses of soldiers serving 5 days in a row or more, who have children under age 13, are able to work one less hour a day starting from the first day of miluim.

Fight for your rights

If your rights were impinged upon, either because of ignorance or unscrupulous behavior on the part of your employer, consult a labor lawyer about what steps to take to correct the situation.

Categories
Employment in Israel

Deterioration of Work Conditions and Your Rights

What happens if you start a job with certain conditions and these are later changed to your detriment? Legally, when there is a deterioration of work conditions (Haraat Tnaim), if you have been working at that place of business for a full year, you are entitled to quit and receive compensation as if you were fired.

The purpose of this law is to prevent companies from “convincing” employees to quit by making it untenable for them to stay. This is a big concern when an employee has been at the job for a long time and the compensation payments are high, but it can happen to any worker.

What’s considered a deterioration of work conditions?

  • Habitually late salary payments
  • No longer paying for vacation, travel expenses, convalescence and overtime 
  • Lowering of salary, either globally or by changing the employee’s hours or shifts
  • Demotion
  • Drastic change of role
  • Humiliating treatment of the employee
  • In some cases, transfer of work location to somewhere farther away

In order to be considered a deterioration of work conditions, you need to show that one of these legal definitions occurred and that they are the reason that you quit. It is up to the Labor Court to determine whether you receive compensation for being fired. 

How to quit due to deterioration of work conditions

  1. Consult with a labor lawyer about whether your situation is considered a legal deterioration of work conditions and, if so, follow his/her advice on next steps.
  2. Give your employer a chance to correct the situation. Send a written letter in which you complain and ask for reinstatement of the previous conditions. You might even get lucky and get what you asked for, especially if your employer is worried about a possible lawsuit. If the situation is in fact resolved, you can’t claim compensation if you quit anyway.
  3. You’ll have a better case if you consult with a labor lawyer before resigning and receive assistance in the wording of a resignation letter which references worsening of work conditions.
  4. You must work out your notice period (see Quitting your job: What are your rights and obligations? for details) unless the situation is unsafe or abusive.
  5. If you do go to court, maximize your chances of winning by doing so with the help of a lawyer.

Staying at a job despite the new conditions

There are circumstances under which, even though you are not happy about the new conditions, you prefer to stay at the job instead of quitting. Examples might be when the company is in trouble and everyone takes a pay cut in order to help it stay afloat or if, for some reason, you aren’t able to switch jobs and you would rather have inferior conditions as opposed to no job at all.

If you were informed about worsening conditions and continued to work at the job for eight months or more, it is considered as if you consented to the new conditions and you won’t be able to sue for compensation afterwards. This is true even if you initially objected to the changes.

Your employer may ask you to sign a document stating that you agree to the worsening conditions. They do this in order to protect themselves from being sued during those eight months when you can still claim that you haven’t agreed. Once you sign the document, you have given up your right to claim that you quit due to deterioration of conditions.

Getting a new job

If the deterioration of work conditions is such that you no longer want to continue working at this job, it’s probably a good time to start looking for a new job.

If the prospect seems scary, read our article on how to get a job in Israel. It’s full of information about updating your CV, where to find job postings and the interview process.

For more information on switching jobs, also see these articles:

Categories
Business in Israel

Legalities of Full-Time Freelancing in Israel

A young mother told us that she was considering full-time freelancing as a way to make her own schedule and have enough time to spend with her children, but she wasn’t sure she understood the paperwork involved. A new oleh reported that he chose freelancing in order to work with clients abroad using expertise that doesn’t translate well in the Israeli job market and wanted to know his obligations to the Israeli government. A translator chose freelancing because full-time translation jobs are a rarity, but was confused about her rights as a small business owner. 

What all these professionals have in common is that they were all concerned about the legalities of full-time freelancing. They were worried that freelancing in Israel might be complicated and expensive. They had heard that they would pay high taxes and be bogged down in paperwork. 

So we set out to put together a list of legal issues which must be taken into consideration before deciding to go freelance.

Freelancers don’t enjoy the same rights as employees

Employees have rights under Israeli law, such as vacation days, sick days, compensation for getting fired and Bituach Leumi partially paid for by the employer. Freelancers do not enjoy these rights – they are paid only according to the agreement made with the client, the agreement can end at any time and they must pay their own Bituach Leumi.

In exchange for their lack of rights, freelancers retain control over their work schedules and the clients they choose to work with. The labor courts have been known to consider a freelancer a de facto employee, if the client behaves more like an employer than a client. One example would be a freelancer who works exclusively for one client for a long period of time and is integral to the function of the department in which he works. The possibility that this worker will be considered an employee retroactively is meant to prevent companies from taking advantage of workers by forcing them to accept freelance conditions while not allowing them the freedom that comes with the status.

Freelancers are responsible for reporting income and paying tax


Employees have their income tax automatically withheld from their paychecks, but freelancers are responsible for reporting their income and paying income tax. Reporting for an Osek Murshe is done bi-monthly and can often be a complicated process. Many freelancers choose to hire an accountant or tax advisor to file their reports in order to avoid fines and other sanctions from the government.

Freelancers may have to collect and pay VAT

A freelancer who is categorized as Osek Murshe (either because his annual salary is over 120,000 NIS as of 2024, or because his business must always be categorized as Murshe) must collect VAT from clients and pay it forward to the Israeli government. 

According to the Israel Tax Authority website, Value Added Tax (VAT) is “imposed on any transaction executed in Israel, on import of goods by every person and on provision of services, in a single rate from the sum of the transaction or the price of the goods.” In 2024, VAT is 17% of the total sale.

This tax is collected by the business and then transferred to the government. Physical products are priced with the VAT included, but when services are provided, the freelancer may quote a price including VAT or let clients know that the price quote does not include VAT. 

VAT which is collected from customers is paid to the government every two months. Certain business expenses can be deducted from the total VAT owed.

Transactions must be recorded with receipts

Any transaction associated with the business must be recorded. The customer must receive a receipt for payments made. Receipts can be on paper or online and must be compliant with Israeli law. An Osek Murshe providing services will also issue a tax invoice, although this can often be combined with the receipt in a document called Cheshbonit Mas Kabbalah (tax invoice receipt).

Some examples of approved invoicing and receipt software are:

Freelancers are required to contribute to a pension fund

Until 2017, freelancers could choose whether to deposit funds independently into a pension fund, but this led to a situation in which too many freelancers were in a financial bind when they reached retirement age. According to current law, freelancers must contribute to a pension fund according to how much they earn.

For the first 75,216 NIS earned, a minimum of 4.45% must be deposited. For the next 150,432 NIS earned, 12.55% must be deposited. Any income above that amount is exempt from the pension fund, but freelancers who want to increase their retirement fund can choose to deposit more. There are tax incentives for pension funds but they are not limitless.

Legally, pension funds can be deposited all at once, as long as they are deposited by the end of the tax year in December. Of course, for many freelancers it is financially easier to deposit a smaller sum each month. This can be set up automatically through the bank.

Freelancers must fill out a Hatzharat Hon

The Israeli government requires freelancers to declare their assets to the government periodically (when the file is first opened and about every five years thereafter). The purpose of this report, called a Hatzharat Hon (declaration of assets), is to ensure that freelancers aren’t under-reporting their income. 

The first Hatzharat Hon serves as a basis for future reports, so that assets reported are constantly checked against the first one. This makes it doubly important that the first one is done properly. It is highly recommended to hire a professional accountant or tax advisor to assist in the preparation of this report. Because the declaration requires a lot of personal information, it is not a job which can be handed over entirely to an expert, and the freelancer will have to be involved with the paperwork. But the accountant will know what needs to be included and ensure that the freelancer is in compliance.

Is it worth it?

We are often asked whether it’s worth it to freelance with all the extra obligations and paperwork that come along with it. There’s no right answer, of course. So much depends on industry, income, lifestyle and personality. Some people find that the inconveniences are far outweighed by the flexibility that freelancing affords them. Others are able to establish more lucrative careers by working for themselves or just can’t fit full-time work into their schedules and prefer to make their own hours. 

Freelancing can be made much simpler by outsourcing the reporting and paperwork. The extent to which this is done must, of course, be balanced with the cost of hiring others to do this work. Many freelancers start out doing a lot of the admin work for their business themselves and hire others as their income grows. If they can earn more by doing the work of the core business, it pays to outsource the admin work. 

Employer of Record services like Route 38 are another solution for outsourcing paperwork. In this scenario, the person is considered an employee of the EOR service. Income tax, Bituach Leumi and pension will be automatically withheld. Invoices and receipts will be issued by the EOR per the employee’s instructions and there is no need for a Hatzharat Hon. Some EOR services are geared towards freelancers with multiple clients, while others (like Route 38) are more focused on those who have one client abroad.

Not sure whether freelancing is for you? Read more about the differences between employees and freelancers in our free e-book, Your Route to Career Success in Israel.

Categories
Employment in Israel

Working in Israel without Fluent Hebrew

Moving to Israel is not without challenges, and one of the big ones is the language. If you went to a Jewish day school you might have a passable knowledge of Hebrew, but it’s equally possible that while you can read a Jewish text, you can’t carry on a conversation in Hebrew without getting stuck mid-sentence. If you didn’t learn Hebrew at all as a kid and you’re starting from scratch as an adult, learning the language will be a bigger challenge.

It’s obviously a good idea to learn as much Hebrew as you can before you get here and continue to learn once you arrive. You’ll need Hebrew most places you go. Although many Israelis speak English, it will be hard to deal with bureaucracy, customer service and parent-teacher meetings without any Hebrew. 

Work in English

Work can sometimes be the exception to this rule. Depending on your profession, you may be able to find a job where English is a huge plus and Hebrew is not as important. Examples include teaching English, US accounting for expats, technical writing, computer programming, marketing to international clients and overseas sales. 

Be aware that even at jobs where the work is in English, office communication may be in Hebrew. Emails, WhatsApp messages, meetings and friendly conversation may all be conducted in Hebrew. You can certainly start a job like this without fluent Hebrew, but you will feel more comfortable and succeed better if you work on improving your language skills over time.

How to learn Hebrew

The best way to learn a language is to use it as much as possible. When you really need to get your point across in a professional setting, it is probably a good idea to speak English. But if you speak Hebrew in one-on-one conversations with colleagues, during coffee breaks and outside the office, you will gradually become much more fluent.

Many olim choose to start their lives in Israel with a stint at ulpan. There are both government-run and private ulpan programs, which focus on acquiring language skills which are useful in day-to-day interactions. An ulpan can be time-consuming, so if you don’t need to start working as soon as you arrive, you may want to focus on learning Hebrew first and look for work later. If you can swing working during the day and going to ulpan in the evening, there are some programs with convenient schedules for employed people.

Bring your job with you from abroad


More and more olim are now choosing to come to Israel with a job they brought with them from abroad. This has the obvious advantage of not requiring Hebrew at all, but it’s a double-edged sword; if you don’t need Hebrew for work, it is likely to take you much longer to learn the language and integrate into Israeli society. However, it certainly makes life easier at the beginning and can be a very useful first job in your new home.

For more information on working in Israel, download our free e-book, Your Route to Career Success in Israel.

Categories
Employment in Israel

How to Find US Companies Open to Employing Israelis

Whether you are considering a move to Israel or are already here, you have probably heard that a lot of English-speaking immigrants are working for companies in the United States. Some of the benefits of this arrangement are the ability to work in English, a more familiar workplace environment, the ability to use skills unique to the US market and the possibility of earning a higher salary.

But how do olim find these jobs? Where can you find US companies that are open to employing Israelis?

Outsourcing companies

There are a number of Israeli companies that specialize in outsourcing and hire Israelis to work for their clients in the US. You benefit from the network that the company has already built, which can make finding a job easier. On the other hand, whenever there is a middleman, you need to consider the expense of that intermediary and whether you want to work for an outsourcing company rather than directly with an American company.

Popular outsourcing companies include:

Job sites

Check out job websites and filter for work from home or remote positions. English-speaking Israeli job boards are likely to have more options for remote work with American companies. The advantage of these sites is that companies that are listed on these sites have chosen to appear there since they are specifically looking for Israeli employees.

These are some boards that focus on English-speaking jobs:

Research companies

Make a list of the companies in your industry that you might like to work at. Then do some online research to see who their employees are. Do they have employees who clearly live in Israel? Or perhaps they have a remote work policy and hire employees from different areas of the US or abroad? Even if these companies aren’t specifically looking to hire Israelis, there’s a chance that they would be open to hiring someone living in Israel. Apply through the regular channels and emphasize that you would like to work remotely.

Here are some websites where you can find remote jobs (although you have to check whether specific companies will hire residents of Israel):

Networking


It’s been said before that many jobs in Israel are procured through networking. You can often get a job based on who you know, and that is true for remote jobs for US companies as well. Go to networking events, connect online to people in your industry and tell everyone you know that you’re looking for work in an American company. The more people you know who are working for US companies (whether they live in Israel or the US), the easier it will be to find out about available jobs. 

The next step

Once you find that remote job, the next step is to figure out how you will get paid and how you will report your income to the Israeli government. You can find some general advice on this dilemma in the article: How to Work from Israel for a US-based Company. For individualized guidance, book a consultation with us at info@route38.co.il

Categories
Business in Israel

Paying Yourself a Salary in Israel

Starting a business in Israel? In addition to figuring out product, marketing and revenue streams, you have to decide how you will pay yourself a salary.

There are a number of ways that you can structure your business and get paid. 

Chevra B’Am

One option is to create a Chevra B’Am (registered company). This option allows you to hire as many people as you like, including you. You will be an employee of the company and draw a salary with a pay stub just like any other employee. This structure allows your business to scale easily, but it does raise the price of your accounting fees, so it’s generally recommended only if you plan to expand and bring in a large revenue. 

When you open a Chevra B’Am you enjoy full autonomy and some flexibility with expenses. The main advantage, though, is the potential for long term gains if you don’t pay yourself all of the company’s earnings as a salary. Funds that remain in the company account are taxed at a lower corporate rate and can be used for investment purposes.

However, these advantages may be offset by the difficulty of dealing with Israeli agencies. You may be familiar with the process of opening a company in the US, which can be done inexpensively online. But Israeli companies are more complex to open and maintain. You need to understand all the rules and take responsibility for the company, in order to ensure you are getting the full value. It’s crucial that you have a trustworthy accountant who is proactive and ensures that all your forms and reports are filed in a timely manner.

Opening a Chevra B’Am is sometimes mentioned as a way to avoid paying US Social Security (if you’re an American citizen), but again, it only makes sense if the company is successful enough to offset the higher accounting fees.

Please note that although we have covered some basic information here, you need to consult with an accountant before making a decision about opening a Chevra B’Am.

Osek Patur or Murshe

You can register as a freelance business, which is called Patur (VAT-exempt) for up to 120,000 (as of 2024) NIS annual revenue and Murshe (not exempt from VAT) for a higher profit. In this scenario, you’re not paying yourself a salary in the classic sense. You collect money from each client and whatever is left over after you pay income tax, Bituach Leumi, VAT, health tax etc. is your income.

This method generally incurs accounting fees (unless you’re really really savvy), but they are much lower than that of a Chevra B’Am. You are responsible for invoicing, collecting and reporting your income to the government. If you are a US citizen, the American government requires you to pay 15% of your income to Social Security.

EOR employee

A method that has become popular in recent years is signing up as an employee of an Employer of Record service. You are a regular Israeli employee with a Tlush Maskoret (pay stub) and all necessary payments withheld before you receive your salary. This method is the best solution if you have one client abroad and need to pay yourself a salary in Israel. If you have multiple clients/customers, it might be expensive to work through an EOR, so you need to check whether this is worthwhile for you.

An EOR service takes care of invoicing and collecting payment and there is no need to report your income to the Israeli government, since your Tlush Maskoret takes care of that. There’s also no need to pay US Social Security.

Choosing the right method


It will probably not surprise you to hear that there’s no right answer for everyone and that you should get professional expert advice before deciding how to structure your business. Your current income, projected income and personality can all play a part in determining which of these methods you should choose for maximum profit and minimum headache.
At Route 38, we offer one-time consultations in which we help you weigh your options and advise you on the best way to proceed. Although we are an EOR service, we promise not to push you into choosing that method or into working with us if that’s not what’s best for you. Our mission is to assist you in making a living in Israel, so you and your family can enjoy a successful aliyah. Email us at info@route38.co.il to book a consultation and take the next step in setting up your business.

Categories
Business in Israel Employment in Israel

Working as an Employee and as a Freelancer at the Same Time

Interested in more than one career path? Want to freelance without giving up the steady paycheck? Building a business slowly and maintaining another job in the meantime? Whatever the reason is, if you are working as an employee and as a freelancer at the same time, it’s important to understand your rights and obligations.

Bituach Leumi and Bituach Briut

Employees get Bituach Leumi (National Insurance) and Bituach Briut (Health Insurance) deducted from their salaries. Freelancers must pay these mandatory payments independently. If you are registered both as a freelancer and an employee, the Israeli government will automatically take into account your income as an employee before charging you as a freelancer. You  need to open a file with Bituch Leumi so that they know to charge you accordingly.

Income tax

Income tax is deducted automatically from your paycheck as an employee but you have to report your income as a freelancer and pay taxes on it independently. In the end of the year report, you report your employee income in addition to your freelance income, as well as expenses that you incurred for the business (but not the other job). So you can claim the internet in your home but not the commute to your job. If you have doubts about what can be claimed and what cannot be claimed, it’s best to consult with an accountant or tax advisor to make sure you are getting it right.

Pension

Anyone who works in Israel must have a pension fund. The company you work for will deposit funds into your pension every month, partially at the expense of the company and partially deducted from your salary. Freelancers are obligated to deposit funds into a pension plan, but if the amount you are required to pay (based on your revenue) is lower or the same as what you are getting from your employer, you will not have to deposit any more.

If you are required to add funds, it is up to you whether you deposit them into the same pension plan your employer uses or whether you maintain two separate plans. 

Keren Hishtalmut

A Keren Hishtalmut is a tax-free investment account which is deducted from your income. It is not offered to all employees, but in some workplaces the employer pays for part of it while the rest is paid for by the employee. Freelancers who want to open a Keren Hishtalmut must pay the entire amount themselves. It is not possible to pay into the same account from two different sources, so you will have to maintain two accounts, one from your employer and one from your freelance business.

You will get tax credits for this investment, but the number of credits you get as a freelancer takes into account the amount deposited by your employer into your other account.

Maternity leave

You are eligible for paid maternity leave if you have worked and paid Bituach Leumi for the necessary amount of time before giving birth. If you are eligible both in your freelance and employed work, maternity payment will be given to you according to your combined income. If you are eligible only in one of the incomes, you will receive payment only based on that income. For your freelance work, the maternity leave payment is estimated according to the advance tax payments you are paying. After filing a tax return it will be recalculated. 

Unemployment

If you are fired from your job as an employee, you may be eligible for unemployment payments. You can continue to work in your freelance business, but the payments you receive will be lowered to account for your freelance revenue. In general, if you lose your freelance income you are not eligible for unemployment, although there are some professions which are an exception to this rule.

Work grant

If your income is very low you might be eligible for a work grant. This grant can be awarded to a freelancer or an employee. If your combined income from your business and job are low enough, you can receive the work grant while maintaining both streams of income.

Want to learn more about working and freelancing in Israel? Download our free e-book, Your Route to Career Success in Israel.

Categories
Aliyah

Everything You Need to Know about Careers in Israel

We’re proud to announce the publication of our free e-book, Your Route to Career Success in Israel. This book covers everything you need to know about working in Israel – whether as an employee or a small business owner. Here’s a small taste of what you can find in this 86-page book.

Considering aliyah? Figuring out how to make a living in Israel is at the top of your list of pre-aliyah tasks. This book will help you figure out whether to keep your current job, find a new one in Israel or open your own business. 

The days when it was extremely challenging to make a living in Israel are long gone. However, it’s not always easy to continue on the same career path you started in your home country and you may find yourself making some adjustments to your current career trajectory.

It’s also possible that although you can continue on your exact career path, you don’t actually want to, and the move to Israel is a good opportunity to try something new. Some olim take advantage of the lack of social hierarchy in Israel to take a job that might have been looked down on in their home country. Or they may pivot into a field they are interested in, but hadn’t had the chance yet to make the leap.

Just moved to Israel and struggling to find a job? We’ve got advice on how to find a job.

Your first step in your job search is to create a resume (or CV as it tends to be called here) that fits Israeli standards. CVs should be one page long and include a list of skills above your experience and education. If you’ve had many jobs, remove the oldest ones and the least relevant to the job you are applying for, so you can keep to the one page format. 

You’ll also learn what to expect once you land a job.

When you come on aliyah you have to leave a lot of assumptions back in the old country. Government bureaucracy, customer service and finances are just some of the areas in which things are likely very different from what you’re used to.

The same holds true for employment laws. You don’t want to go into the Israeli workforce expecting the same rights as you had in your job abroad. In some cases, Israeli law protects you more than the law in your home country. But if you are not aware of your rights, they can easily be impinged on. On the other hand, you may end up being disappointed when you find out that your employer owes you less than you expected based on what you are used to from abroad.

Been in Israel for a while but thinking of changing up your career? Read this book for tips on quitting your job, freelancing or looking for a new position.

If you are not happy with your job or you have found a better one, it may be time to quit your current job and move on. Israel is a small country and almost everyone is connected in some way, so it’s important to leave in a professional way and on the best terms possible. 

Make sure that you give proper notice according to the law. Israeli employment law states that an employee who has received a monthly salary in an organization for up to one year must give notice as follows: one day for each of the first 6 months of employment and two and a half days for each additional month of employment. If you have been working at the same company for over a year, you must give one month’s notice. 

Learn about business and workplace culture, your rights and obligations as an employee or business owner and lots of other advice on navigating a career in Israel.

Hanging out your shingle and starting your own business? Congratulations! There are a lot of wonderful things about being your own boss – starting with the fact that you are your own boss… But before you get started, you need to make sure that you are set up legally to operate and collect payment.

Most small businesses start as “Osek Patur” (exempt business), since their projected income for the first year is not over 120,000 NIS. If your projected income is above that amount or you belong to a professional which is never exempt, you will be considered an “Osek Murshe” (licensed business). 

Of course, Your Route to Career Success in Israel also provides information about the use of Employer of Record services – who should use them, how they work and how they can help you succeed in your career.

In order to provide services to a company abroad, you have to be registered as a freelancer or as an employee here in Israel. There is no way to be officially employed by a company outside of Israel that doesn’t have an office here. Since freelancing isn’t always the best choice, we provide Employer of Record services to people who provide services to one or more companies.

Here at Route 38, we believe that knowledge is power. The more you know about the work culture and laws in Israel, the easier it will be to make a living here. Our mission is to pave the way for you to enjoy a satisfying and lucrative career in your homeland. 

Download the book and arm yourself with knowledge!

Categories
Business in Israel

Transitioning from Osek Patur to Osek Murshe

Making more money in your business this year and need to transition from Osek Patur to Osek Murshe? Mazel tov! 

Here’s what you need to know about making the switch.

What’s the difference between Osek Patur and Osek Murshe?

The maximum annual revenue for an Osek Patur is 120,000 NIS (as of 2024). If you’re making less than that, you are defined as an exempt business – meaning that you are exempt from charging VAT (Ma’am) and transferring it to the government. Once you become an Osek Murshe, you will need to collect VAT from each customer/client and pay it to the VAT office. 

Another difference between Osek Patur and Osek Murshe is that an Osek Patur reports revenue to the VAT office once at the end of the year, while an Osek Murshe reports every two months. Reporting and paying income tax and Bituach Leumi are the same for both types of businesses.

Note that certain professions are always defined as Osek Murshe, no matter the revenue. Architects, engineers, private detectives, lawyers, chartered accountants, doctors, management consultants, interpreters, insurance agents, psychologists, dentists and medical clinics cannot be registered as an Osek Patur. 

I’m almost at the Osek Patur limit; should I stay under it?

While it’s tempting to stay under the Osek Patur limit to make life simpler, this may not be the best financial choice. It’s true that as you transition you may find that you are briefly in a situation where you aren’t actually taking home more money or maybe even losing a bit, since accounting expenses and the need to charge VAT negatively impact your take-home pay. But you just need to get over that hump and increase your income enough that being an Osek Murshe starts to pay off. At the end of the day, limiting your income artificially doesn’t give you the freedom to expand and succeed.

Another reason to become an Osek Murshe is that your business will now be seen as more established. This will garner you more respect and ultimately generate more sales.

I’ve reached the Osek Patur limit and the year isn’t over – now what?

If you started off as Osek Patur but find that you have reached the 120,000 NIS limit before the end of the year, you will need to update your status at the VAT office and show them proof that your bank account belongs to you (either with a form from the bank or a canceled check). 

You will need to start collecting VAT from your customers and transfering that money over to the VAT office on a bi-monthly basis. It’s a good idea to put VAT payments aside when you receive them from clients so that you don’t accidentally spend that money and find yourself scrambling to pay VAT at the end of the two month period. Reported business expenses are deducted from the amount of VAT you owe, so you can save by keeping meticulous records of your expenses and reporting them accurately.

You may find that the transition from Osek Patur to Osek Murshe makes the accounting complex enough that it is worth hiring an accountant or tax advisor to help you with the bi-monthly reporting.

Should I raise my prices?

This is a question which seems to cause a lot of angst to small business owners. You may be afraid that if you raise your prices, your customers will go elsewhere. On the other hand, if you don’t raise your rates, you will be paying the VAT out of pocket, which is unlikely to be sustainable for very long.

If you can swing an across the board price hike without losing customers, let them know that you are now an Osek Murshe and are therefore adding VAT to all prices. If you don’t think this will fly, consider sending a notice that prices will be rising on a certain date, so that clients can enjoy your old rates if they book your services or buy from you sooner. You can get a boost of business from those wanting to save and you’re giving enough notice to everyone so they can adjust to the new prices.

Another method is to raise prices for all new clients while keeping the old prices for existing clients. If you’re selling products, you can do this by setting higher prices and then offering return customers discount coupons. This method works best if the repeat business isn’t too frequent. If you have customers paying you every month for the foreseeable future, at some point you are likely going to want to raise their rates as well.

How else can I make up the difference?

Maybe you can’t raise your prices right now. Or maybe your new prices cover the VAT payment but not your extra accounting costs. If that’s the case, you want to look for other ways to increase your income and your take-home pay. 

Selling more is the most obvious way to increase revenue. Marketing, networking and offering your services to new audiences are all effective ways of boosting sales and making more money. You can also consider cutting costs, so that a larger percentage of the sale is actually revenue. Look into decreasing your payments on internet, phone, workspace, production costs, shipping etc.

Review the value of the product or service you are providing. Cut out any elements that don’t add much value to the customer but cost you time or resources. Instead, add elements that aren’t a big effort and don’t cost a lot of money but significantly increase value for your customers.

Consider whether outsourcing is financially beneficial to you. If it increases productivity and sales, it is worth outsourcing some of the work. But if you are paying someone to do work you could just as easily do yourself without detracting from your business, it may be time to rethink that arrangement.

I’m still not sure what to do…

The transition to Osek Murshe can be overwhelming. If you find yourself unsure about what steps to take and how to run your business with this new status, a business consultant can help you get a handle on things and make decisions about how to move forward. Many consultants offer a one or two session package, in which you can get individualized advice that can be implemented easily. Think about investing a small amount to help you smooth the transition and set yourself up for continued success.

We wish you plentiful and joyful parnassah!

Categories
Business in Israel

Deducting business expenses in Israel

The age-old saying, “You have to spend money to make money” is absolutely true. You can’t run a business without incurring some expenses, whether you are freelancing or selling a physical product. The good news is that it’s possible to deduct many business expenses from your taxable income and reduce the amount you pay to the Israel Tax Authority. 

What is considered a business expense

Business expenses are defined as expenses that are necessary to running your business, for which you get no additional benefit and that you can provide a receipt for. (No, the Tax Authority won’t take your word for it…)

  • Products – If you sell a product, the cost of purchasing the product as well as additional expenses such as shipping, storage and packaging can be deducted. Rent, price of buying and maintaining a storefront or office are also considered business expenses.
  • Office – If you work from home, you can deduct your internet, and part of the water, electricity, cell phone and property taxes (arnona). Office equipment, such as computers, software, office furniture and ink for your printer can also be deducted. These apply whether your office is a rented/purchased space or a room in your house. 
  • Personnel – Salaries and other employee expenses like training are deductible. So are payments made to consultants, including your accountant and lawyer. Your own contributions to a pension plan, Keren Hishtalmut or Kupat Gemel grant significant tax reductions. 
     
  • Food and accommodations – Coffee, drinks and snacks can be deducted at a rate of 80%. Business trips outside of Israel only are recognized as long as they are really business trips and not a trip for pleasure onto which you tacked a conference or meeting. 
     
  • Education – Tuition for academic degrees are not deductible, but professional courses related to your business are. 
  • Cars – If you are an Osek Patur or Murshe and use your car to generate business, you can claim 45% of your expenses, including gas, insurance, maintenance, parking, tolls, registration fees and depreciation. If the business is registered as a corporation, a car attached to a specific person is considered an employee benefit. 
  • Restaurants – You cannot generally deduct the expense of taking a client or employee out to a restaurant or otherwise entertaining them. The exception is if you take a foreign client out for a meal. 

  • Clothes – Clothing is also not deductible, unless you need special clothing for safety or a uniform that you need to wear. 

Deduct expenses carefully

When you deduct expenses, you need to be extremely careful that you are claiming only what the Tax Authority allows you to claim and that you are being honest about what you spent on your business as opposed to your personal life. Since deductions are often partial, it can be complicated to keep track of everything yourself. It is recommended to keep all receipts and hand them over to an accountant or tax advisor who will file your taxes and claim only what should be deducted.

Categories
Business in Israel

Freelancing in Israel for Clients Abroad

As an immigrant to Israel, you have the advantages of speaking another language and connections in the country you came from. These advantages can be translated into a lucrative freelance career working with clients abroad who require your expertise. Here’s what you need to know about freelancing in Israel for clients abroad.

How do I price my services?

Price your services by investigating how much these services cost in the country where your clients are located. You may want to charge slightly less than that price, as an incentive for clients to use your services instead of someone more local. If the salaries in that country tend to be higher than they are here in Israel, you won’t feel slighted by taking less and you will get more business, ultimately leading to you making more money. 

Alternatively, charge the market price your clients are used to and give them other reasons to hire you – such as your unique expertise or your quick turnaround.

How do I create invoices and receipts for clients abroad?


You need to provide the tax offices with receipts for payments for all clients, regardless of where they are located. These receipts must be in Hebrew but you can send the client a version in another language. Many of the invoicing programs which are approved by the Israeli government will provide you with an English version of your invoices and receipts to send to the client, while simultaneously creating a Hebrew version for your reporting and accounting.

Do I need to charge VAT?

If you’re an Osek Murshe, you generally charge your clients VAT. However, the general rule is that clients abroad, with no presence in Israel at all, do not pay VAT. Sometimes individuals living in Israel have a corporation or nonprofit registered abroad and mistakenly think that they can pay you through that entity without having to pay VAT. If you are in any doubt about whether to charge a specific client VAT, consult with a knowledgeable accountant. You don’t want to get in trouble with the VAT office retroactively, so it’s best to get the correct information upfront.

How can clients abroad pay me?

There are a few ways that you can collect payment from clients abroad.

  1. Ask them to send funds via international bank transfer. There is a fee on both ends, so the client will pay to send the transfer and you pay to receive it. The funds can be transferred into shekels at the rate that the bank provides, which is not always the highest rate. The transfer can take up to 7 business days, although it often arrives sooner. Due to money laundering laws, you may be required to show the bank where this money came from before they allow you to access it. Alternatively, you can have funds transferred through Wise, which is the easiest, fastest and least expensive way to move money from abroad to Israel.
  2. If you have a bank account in the country your clients are located in, they can pay into that account. This is easy for your clients, but then you have to get the money here in order to pay your bills and buy groceries. If you have a credit card for that account with no fees or low fees, using it to pay for things in Israel can be a good solution. But be aware that not every company will accept every foreign credit card, so you need a shekel alternative as well. Also note that even if the money is in a foreign account, it needs to be accounted for and reported in Israel.
  3. Payment can be transferred through Paypal. There are fees here too (although they tend to be lower than the bank) and the conversion rate isn’t always in your favor. If you transfer small amounts into your bank account, you will be charged a fee, but if your client pays you a larger amount or you let a few payments build up, you can then deposit the funds in your bank account in shekels for free.
  4. Your client can mail you a check here in Israel, which you can take to a change place and exchange for cash or a check in shekels. Not all change places are willing to accept checks and those that do will give you a lower rate than they give for cash. This method is time consuming and dependent on an unreliable postal system, so we don’t recommend it as a first choice.
  5. You can register with an Employer of Record (EOR) service. You officially become an employee of the EOR company and they take care of fees and exchanging currency. There is a fee involved here too (a flat fee or a percentage of your income), but you also save on accounting fees and time spent on admin work for your business, so it may very well be worthwhile.

Is it better to freelance for Israeli clients?

The answer to this question is dependent on a number of factors. These include market prices in Israel vs. abroad, your level of Hebrew, where clients in your industry tend to be located and whether you need to work during the hours that your clients are in their office. 

Of course, you don’t necessarily have to choose one or the other – if your expertise is required internationally, there’s no reason why you can’t work both for clients in Israel and abroad. The important thing is to find a mix that works for you and to stay compliant with government regulations and proper reporting.

Categories
Employment in Israel

Are EOR services only for US citizens?

Employer of Record services are becoming more and more popular in Israel and for good reason! They have the reputation of being specifically for US citizens who want to avoid being self-employed and therefore required to pay 15% of their income to US Social Security. But this is far from the only purpose they serve, and EORs are definitely not only for US citizens.

Save the hassle and expense of accounting

When you get paid from abroad, you set yourself up legally and report your income to the Israeli government. If you do this by registering as a freelancer, you need to conform to all the rules of freelancing, including invoicing, sending receipts, reporting your income bi-monthly or annually (depending on how much you make), deducting expenses and paying VAT (if you earn more than 120,000 annually). 

If you’re employed by an EOR, the company you work for pays the EOR and the EOR provides you with an Israeli pay stub, with taxes and other payments automatically withheld. You don’t need to hire an accountant or spend hours on pesky office work that takes you away from your actual job.

Save on currency exchange

Getting paid in foreign currency? As a freelancer, you have to maintain a bank account abroad or have foreign currency deposited in your Israeli account. You live in Israel, which means your expenses are all in shekels, so it’s pretty inconvenient and expensive to be constantly converting foreign currency so you can pay your bills. International bank transfers can be expensive on both ends and the company abroad may not like paying extra each month for the privilege of paying you. Some companies will just flat out refuse to pay into a bank account outside of their country.

EORs take the burden off you. They may have bank accounts in other countries or accept the transfers into their Israeli account and take care of converting to shekels without your involvement. You get paid in shekels directly into your Israeli bank account and can pay your bills without any hassle.

Get a stable paycheck

With an EOR, you get paid the same time of the month every month. Taxes and other payments are already withheld and you don’t have to guess what your take home pay actually is. Freelancers are often unable to tell you how much they earn, since so many payments are taken off after they get paid by their clients and these payments aren’t the same every month. So there’s value in seeing it all spelled out clearly on your pay stub and only getting money in the bank which is actually yours to spend.

When you ask the bank for a loan or mortgage, it’s easy to show your income by producing your pay stubs. Banks sometimes look askance at freelance income, considering it less stable than income earned from a job, so having a pay stub can be a big advantage there.

Is an EOR right for you?

It’s hard to know if an EOR is right for you without knowing the specifics of your job, income and finances. We recommend booking a consultation with us to discuss the details of your particular situation. Whether you have already accepted a job, have been working abroad for a while or are considering accepting a new job, we can help you figure out the best way to structure this. At Route 38, we give you the best advice tailored specifically to you, with your best interests front and center. Email us at info@route38.co.il to book your consultation. 

Categories
Business in Israel

Switching from Employee to Freelancer in Israel – Is It Worth It? 

Are you dreaming of being your own boss, making your own schedule and choosing your own clients? Are you thinking of switching from employee to freelancer but are scared of making the leap? We’re here to help with a list of pros and cons so you can make an informed decision.

Advantages of freelancing in Israel

Being your own boss is a very attractive proposition. You don’t have to answer to an employer and can decide when you want to work and who you want to work for. It’s easy to take time off for a doctor’s appointment or for an errand you can’t do in the evening. You can work the hours that you’re most productive, whether you do your best work in the morning or are a total night owl. And you can create a schedule that works around your family life with maximum flexibility.

You get to choose your clients and if you’re not happy with a business arrangement, you are free to end it, whether the client is difficult or the project is not to your liking. This will lead to greater job satisfaction and more pleasant business interactions. 

Some professions lend themselves particularly well to freelancing, since companies or individuals tend to need these services sporadically or as a minor part of their budget and don’t need to hire someone in-house. Translation, marketing, website development, financial services and law are just some examples of service-based businesses that succeed in Israel. 

Disadvantages of freelancing in Israel

Lack of stability is a big disadvantage of freelancing. Your salary will probably be different every month and wars, economic downturns and pandemics can greatly affect a freelance business. If you want to get the same exact salary every single month, freelancing is probably not for you.

Billing is another challenge of freelancing. You need to send invoices to clients, check that they have paid, run after them if they haven’t and issue receipts once payment is received. You also have to figure out how to price your services, negotiate with clients and justify your pricing.

Being your own boss often means that you lose the division between work and home and end up working many more hours than you did as an employee. Demanding clients and work that builds up may have you working into the wee hours of the night, when you’d much rather be spending time with your family or just chilling.

Freelancing also means that you have no intermediary between you and the client, who would have your back and smooth things over. Yes, you can stop working with a difficult client, but you might have to finish the current project and end things on a positive note to preserve your reputation in the industry. That’s not always an easy thing to do!

As an employee in Israel, taxes and additional payments are deducted automatically from your salary and there is no need to report your income to the government independently. As a freelancer, you are obligated to report your income and pay taxes, Bituach Leumi and VAT (if applicable) directly to the government. This means that you need to keep meticulous records of your bills and your expenses. It is recommended to use the services of an accountant or tax advisor for reporting, so this is an extra expense that you need to take into consideration. If you are an Osek Murshe this will be more expensive than if you are an Osek Patur.

If you are an American citizen, you will also be charged 15% of your income to US Social Security as a self-employed person.

So, is it worth it?

There’s really no right answer. You have to consider whether the freelance lifestyle is right for you and whether you can handle the financial risks of running your own business. Some people prefer to start small, by freelancing on the side while still employed. This can be challenging, especially if you’re working full-time, but it’s a good way to test the waters and see if the clients are out there and whether you enjoy working for yourself. You can also take advantage of an unplanned period of unemployment to experiment with self-employment. 

It can take from three months up to a year or even longer to build up a steady stream of clientele, acquire a reputation and bring in substantial income, so don’t give up before you’ve really given it a try.

Want to know how to set yourself up as a freelancer in Israel? Osek Patur – Guidance for Your New Business has all the details.

Categories
Aliyah Bringing Your Existing Job to Israel

Keeping Your US Job after Aliyah

There’s lots to consider before making aliyah – where to live, schools for your children, learning Hebrew, and, of course, employment. Although many people quit their job and look for work or open a business once they get to Israel, an increasing number of olim are continuing to work remotely for the company they are already employed by.

Advantages of keeping your US job after aliyah

The main advantage of keeping your US job after aliyah is that you don’t have to look for a new one while you’re making many other adjustments in your life. With all the changes you have to look forward to (both the awesome and the challenging), knowing you have an income right off the bat at a job you know and like can really make a difference. You don’t have to look for and maintain a job in a different language and in a different culture, making for a smoother transition to life in Israel.

If you’ve always wanted to work from home but never had the opportunity, you are likely to love the flexibility of working from home. And if you were already working remotely, the transition to working from another country will not be such a big leap.

In case your Hebrew isn’t fluent, remote work for a US company has the advantage of not requiring you to learn Hebrew quickly. Although there are many jobs in Israel which are mostly in English, it’s hard to find one where no Hebrew is required at all. Even if correspondence and meetings are in English, lunch break and water cooler conversations are probably going to be in Hebrew. Staying in your English-speaking work environment is just easier, especially at the beginning.

Depending on your current salary, continuing at your job may be a big advantage. Check average salaries in your industry in Israel and compare with what you are making now. You may find that it is an economically sound decision to keep your US job.

Disadvantages of keeping your US job after aliyah


Working remotely for a US company isn’t for everyone. If your job requires you to work American hours, this may impede your family and social life, since you’ll be unavailable in the evenings. It will also be harder to integrate into Israeli society if you are working when other people are getting together. (Bear in mind that some Israeli jobs for English speakers will also require American hours, so this issue isn’t exclusive to remote work.) Plus, you won’t make friends with Israelis at work or improve your Hebrew naturally just by being surrounded by Hebrew-speakers all day.

You may also not be the type of person who works well from a home office. If you thrive in a busy office environment and need structure to keep you on top of tasks, you may find you are lonely and less productive working remotely.

Once you begin working remotely, there might be changes in your relationship with co-workers. When you were in the office regularly, you had a rapport with them and picked up information naturally, but now people need to remember to cc you on important emails, include you virtually in meetings (or update you afterwards) and trust that you are completing your tasks and working the required hours.

Convincing your company to keep you on

If you’ve decided that you would like to work remotely for your current employer, the next step is to convince them that this is a good idea. Here are some arguments you can make for keeping you on:

  • Demonstrate your value to the company. If they don’t want to lose you, they will be much more willing to consider remote work.
  • Are there other employees in the company working remotely? Use them as an example of how this arrangement can be successful. If there are some aspects that could use improvement, be prepared with answers on how you will avoid those pitfalls.
  • If you previously worked remotely (say, during Covid) or occasionally work from home, show how this has not negatively affected your productivity.
  • Demonstrate how the company can benefit from having someone working when others are asleep. Maybe you can take over customer support during the daytime in Israel or be on call for emergencies at times when others would rather not have to be.

How it works

When you work in Israel, you are liable for Israeli income tax, but unless your company has an office in Israel, they do not have a tax file and can’t issue you an Israeli pay stub or withhold taxes and other required payments. 

You can solve this in one of two ways. 

The first option is to become a freelancer (1099 worker) for the company which previously employed you. Then you register as a freelancer in Israel, send an invoice every month to the US company and report income to the Israeli government as a self-employed person. Most people do this by hiring an accountant for bi-monthly and annual reporting, an expense you need to consider when calculating your take-home pay.

As a registered freelancer and a US citizen, you will also have to pay 15% into US Social Security, so take that into account as well.

The other option is to become an employee of an Employer of Record service like Route 38. In this scenario, the EOR service invoices the company you work for. The company pays the EOR and then you are paid by the EOR with an Israeli pay stub and all deductions withheld. You don’t need to hire an accountant and you are not required to pay US Social Security. There is a registration and termination fee as well as a monthly fee, which can be paid directly by the company.

Signing up with an EOR is a process that can be started before aliyah, so that you can begin working as soon as you are settled in Israel and ready to get back to regular employment.  

Categories
Employment in Israel

How to Get a Job in Israel with No Network

Ask any Israeli how to get a job in Israel and they will tell you that connections and networking are a big factor. They might tell you a story about how they found out about a job through a friend of a friend, someone they served with in the army then pushed their CV to the top of the pile and when they got to the interview, they played Jewish geography and discovered that the interviewer was best friends with their former neighbor.

But what if you don’t know anyone in your field in Israel? What if you don’t have multiple relatives here and made aliyah after army age? Does this mean that your job prospects are doomed?

Of course not! Although some jobs are found through connections (what we Israelis call “protexia”) it’s also possible to find employment by applying the old fashioned way.

Here’s how to do it.

Create your Israeli CV

The first rule of thumb for an Israeli CV is to keep short and simple. Unless you’re in a specific industry where longer CVs are acceptable, keep yours to one page. Use bullet points and short sentences to describe your experience, starting with the most recent and working backwards. If you previously worked in a different field or in a job that’s not relevant to the one you are applying for, leave it off altogether, since it won’t help make your case.

Include your full name, phone numbers and email address. Some Israelis include their addresses on their CV but that opens up the possibility of potential employers thinking you live too far away or making assumptions about who you are based on where you live. It is not customary to include a picture and is no longer customary to add your marital/family status.

List your skills front and center, as they may not be obvious from your list of previous jobs. Include your education, but unless you are very young, don’t include where you went to high school.

Tailor each CV to the employer you are sending it to, emphasizing the skills and experience they will care about and de-emphasizing or excluding those which are less important. For instance, if you are applying for a teaching position, the fact that you are handy at using Word is not important, but if you are applying to be an office manager you want to include that and leave out your experience as a classroom teacher.

Search for job postings

Once you have a CV that’s market-ready, start looking for potential jobs. Social media is a great source of job postings. There are a number of Facebook and LinkedIn groups that are dedicated specifically to job posts. 

Remember that if you can find jobs on social media, potential employers can find you there too, so ensure that all your profiles are professional looking. If your profile picture shows you drinking beer with your friends, now is the time to change that. Check that your LinkedIn accurately represents your skills and experience, as it effectively serves as a second resume.

There’s no shame in posting on your social media that you are looking for work. You can state that you have just made aliyah or that you are looking for your next challenge. The more people that know you are looking, the more likely that someone (sometimes even the most unexpected someone) will send a relevant job post your way.

Aside from groups that aggregate job posts, there may also be groups for professionals in your field. That’s a great way to find out about available jobs as well as connect with people in your industry.

Job postings can also be found on Israeli job boards. Nefesh B’Nefesh manages a job board specifically geared toward olim, including many positions that don’t require much, or any, Hebrew. You can also search job listings in English on the Janglo website. Search in Hebrew on sites such as Jobnet, Drushim and AllJobs.

Write a cover letter

Never send an email that just includes an attachment! Instead, write a cover letter and send it in your email to the employer or recruiter. Don’t make the cover letter part of the file with your CV, send it directly in the email. A good cover letter is no more than four or five lines and stresses which skills and experience make you perfect for this specific job. 

If you know the name of the person who will be reading this letter, start with Dear [first name] to personalize your message. If you don’t, leave off the salutation. Do not write “Dear Sir/Madam” or “To whom it may concern.”

Consider using an AI tool such as ChatGPT to improve your cover letter. Write a draft and then run it through AI software to make it even better. Don’t forget to check it for mistakes (they do occasionally happen) and tweak it if it comes out a little bit too generic.

Proofread your CV and cover letter

Before sending, proofread, then proofread and proofread again. Even better, ask a few friends to look over your CV and cover letter before you send them. Typos and grammatical mistakes make you look sloppy, and if you are applying for a position in which language is important (like teaching, sales or marketing), mistakes are even more off-putting. Pay attention to the tenses as well. Choose either past or present but don’t zigzag between the two. You don’t want your CV thrown away because it didn’t look professional! 

Follow up

Immediately after applying, send an email or LinkedIn message to the recruiter to check that your CV was received and to reiterate your interest in the position. The first reason to do this is because most companies have bots filtering the CVs before they even reach the recruiter, so it’s possible that your CV was never actually seen by a human being. The second reason is that this will help you stand out. Most people never follow up, so when you reach out to the recruiter you demonstrate your drive and determination.

Job searching is not like dating

You don’t have to see where one job application goes before applying to another. In fact, the more jobs you apply to, the better your chances of getting called for an interview and getting the job. Devote a certain part of each day to reviewing the job listings and applying to whichever jobs seem relevant. 

Sometimes job posts will add requirements that they might be flexible on for the right candidate. They might prefer to hire someone with 3-5 years experience but your skills and two years might just be enough to impress them. They might list proficiencies in certain technologies but be willing to train you in the one you don’t know, if everything else seems right. So be bold and apply even if you don’t meet every single one of the requirements. 

Be aware that the opposite is true as well. If you are overqualified for the job (for example, the ad asks for 2-3 years of experience and you have 10), don’t be surprised if you don’t get a response to your application. That’s because the recruiter wants to hire someone less qualified and pay them a lower salary. He knows that even if you compromise on a lower salary in order to get that first Israeli job, you won’t be satisfied with the compensation for long and won’t stay in the job for the long haul.

Give networking a chance

If you’re seriously looking for a job, there’s no reason to stick to just one method. Cold applications certainly have their place, but it’s also a good idea to start networking. Even if you don’t get your next job through a connection, you never know when that network will come in handy. Connect to people in your field or related fields on social media and at in-person meetups. One-on-one coffees with relevant connections and attendance at general networking events will create that community that will help you further your career. And you might even make some new friends! Check out our article on How to Build a Network in Israel for more information on how to do this well.

Job searching is a little bit like dating

There is one similarity between job searching and dating – you only need one to work out. That right job is out there somewhere. It might take a little while and some effort to find it, but perseverance pays off in the end.

Categories
Business in Israel

Freelancing without an Osek Murshe

Question: I’ve been working for a few years as an employee here in Israel but I want to switch to freelancing for the added flexibility and the ability to choose my own clients. But I’m concerned because I’m an American citizen and I understand that it’s very expensive to be an Osek Murshe and I will end up owing taxes in both Israel and the US. Is there another solution I haven’t thought of?

Answer: Thank you for your question! Owning your own freelance business as an Osek Patur or Osek Murshe does in fact open you up to owing money to the US government. This is because when you file your US taxes, the government will charge you 15% Social Security as a self-employed person.

As a US citizen, you are required to file a US tax report if you have an income, regardless of whether you are employed or self-employed. As an Israeli, you generally will not owe taxes on earned income to the US government, due to the tax treaty between the two countries, according to which you are taxed first in your country of residence. However, Social Security is not included in this treaty. If you’re self-employed, you will be charged 15% Social Security, just like any other self-employed person in the US.

Paying into Social Security

This is not necessarily a bad thing. If you earn 40  Social Security credits you will be eligible to receive a monthly payout from the US government after you retire. Under current laws, you can receive this money even if you are living in Israel. Many retirees find this amount a welcome addition to their retirement funds.

On the other hand, you need to make a living right now. If the payments to Social Security, Israeli income tax and Bituach Leumi are too high to leave you much in your bank account at the end of the month, freelancing might not be the best idea.

Employer of Record service

But that doesn’t mean you should give up your dream of a flexible lifestyle and career. If freelancing is what you want, you can sign up with an Israeli Employer of Record service. Some of these companies specialize in employing freelancers who maintain creative control over their business, while getting an Israeli pay stub from the EOR service. You can still choose your clients and decide how much and when you want to work, but at the end of each month, the company will invoice your clients and pay you a salary according to the amount received from them. 

Legality of EOR services

EOR services which comply with Israeli government requirements are perfectly legal and a good solution for many people. If you go this route, check that the company is compliant and that it has good customer service, so that you receive your salary in a timely fashion and get a quick response when you have a question or issue. 

Categories
Business in Israel

Israeli A-1 Resident and Freelancer – Can It Be Done?

Are you a temporary resident of Israel looking to freelance? It can be done! Here’s what you need to do to set yourself up legally:

Obtain an A-1 visa

In order to obtain an A-1 visa, which gives you permission to work in Israel, you need to go in person to Misrad Hapnim (Interior Ministry). You will need your passport, marriage certificate, birth certificate, proof of your parents’ birthdates, a letter from your school if you are a student, proof of Jewishness (if relevant), criminal background check from your country of origin and an application for visa extension. Be sure to ask specifically for a visa that allows you to work, since it is not offered to you automatically.

Open a file at the VAT office

Before you open your business, you must open a file at the VAT office. You need to do this even if your projected income is that of an Osek Patur (sole trader who is exempt from collecting VAT for the government). As a temporary resident, you can only open a file at the VAT office if you have an Israeli representative who takes responsibility for your business dealings. This representative can be an Israeli spouse, a friend or a relative. The Israeli representative will fill out VAT Form 22, which may need to be notarized by an Israeli notary. 

This representative is not involved in business decisions or management, but is fully responsible for timely and correct payment of all taxes. The purpose of having an Israeli representative is to prevent a situation where a foreign national leaves the country with debts, unpaid taxes, wages owed to workers etc.

If you don’t have anyone you can ask to take on this responsibility, you can open your business through a trust company. This company will act as your Israeli representative for a fee. Some of these companies offer additional services, like registering the business for you, preparing and submitting tax reports and opening a corporate business account at the bank.

In order to open a VAT file, you need proof that your bank account belongs to you. You can use a checkbook or ask the bank for an ishur nihul cheshbon (letter stating that you manage this account). If your bank account is shared, both account holders need to be present with proof of identity (Teudat Zehut or passport).

Print receipt books or sign up for an online receipt service

There is a legal requirement in Israel to provide receipts for any business transaction. You can print receipt books with your business name and information at a printing house, or you can sign up for one of the multiple online services that provide you with electronic receipts. Not all receipt services are accepted by the Israeli government, so it is crucial to choose one that has the government’s stamp of approval.

Open an income tax file

Take your documents from the VAT office to the income tax office (Mas Hachnasa) and open a file there as well. You are now obligated to file an annual tax return, reporting your income and expenses to the government. Avoid problems by keeping meticulous records and backing up any documents that aren’t already in the cloud.

Your business is now open! Now’s the time to get the word out, invest in marketing and get your first clients. We wish you great success in your new endeavor!

For more information on opening a business in Israel, see: Osek Patur – Guidance for Your New Business.

Categories
Resources for Employers Outside of Israel

How Can a US Company Hire Israeli Employees?

An American company employing Israelis is no longer the rarity it once was. Israelis living and working in the US often want to hire other Israelis. Many companies want to support immigrants and native Israelis. And other companies don’t want to lose good employees when they move to Israel.

Remote work has become the norm around the world and Israel is no exception. This makes it easier for Israelis to accept jobs that are based abroad or bring their job with them when they make the move. So, how can your US company hire Israeli employees?

If your employee is currently working on a W-2 basis, you will likely want to change this. Employing someone with a W-2 requires your company to open a tax file in Israel and brings with it various tax obligations you probably don’t want to deal with. 

If your worker is working as a 1099 (independent contractor) or can switch to 1099, your company will not have to open a tax file in Israel. As a 1099, your employee will be responsible for paying Israeli taxes and Israeli Social Security, as well as any tax obligations in the US. 

In order to be compliant with Israeli taxes, your worker may register as a freelancer in Israel.

The disadvantages are that if your employee wants to be paid in shekels, you will need to deal with international wire transfers and their accompanying fees. Additionally, being self-employed in Israel means that your employee will have to pay 15% Social Security in the United States. This can be a big burden, on top of paying Bituach Leumi (National Insurance)  in Israel, so this is not necessarily the best deal for your employee.

Enter Employer of Record services. EOR companies make employing Israelis a piece of cake. Your employee becomes an employee of the Israeli EOR company and you are billed by them for consulting services. They will send you an invoice each month and you transfer payment to them (in some cases, directly into their American bank account). They then pay the employee, withdrawing taxes and other payments as necessary.

This process is easy to set up and maintain from your perspective. There is a registration and termination fee, as well as a monthly fee, but this is a small price to pay for a happy employee, and likely less expensive than giving your employee a raise to cover all their new expenses as a freelancer.

At Route 38, we specialize in providing EOR services for Israelis working anywhere in the world, and we work with hundreds of US companies paying for consulting services in Israel. We are experts in US and Israeli tax obligations and will guide you and your employee on how to best structure your employment arrangement. Email us at info@route38.co.il to set up a consultation and get personalized advice.

Categories
Aliyah Employment in Israel

Can I Get an Israeli Job before Making Aliyah?

If you’ve started consulting with people about aliyah, you may have noticed this phenomenon. Jews living outside Israel often state unequivocally that it’s irresponsible to make aliyah without having a job, while Israelis tell you that it’s almost impossible to get a job here until you are physically in the country. Who’s right?

The advice you’re getting abroad is based on the fact that it can be hard to manage your finances here, especially since there are a lot of adjustments you need to make. Banking, salaries, expenses – it’s all different here. And in a country where salaries are relatively low but expenses aren’t, it can be a real challenge to successfully navigate your finances here. This will, of course, be exacerbated if you are unemployed for the first few months, or longer, of your aliyah. So yes, it would be great to have a job waiting for you before you get on the plane.

Unfortunately, Israelis very much live by the seat of their pants. This is a country in which stability is a rarity, and we never know what’s coming next. We tend to hire employees who can start as soon as possible (after they work off their notice in their previous place of employment) and we may not trust that someone will actually move here until they have arrived. That makes it harder to get a job before you have made aliyah.

It’s not impossible, though! If you have an expertise that’s rare or you have connections in your field, you may be able to get a job offer before aliyah. It’s not likely to be before you make the commitment to come, so you can’t really make the decision to come only after you have a job. Instead, take the leap of faith, decide to come and start looking for a job close to your aliyah date. 

Start networking and putting feelers out there. Get to know Israelis in your field who reside in Israel or in your country of origin. Let friends and family know that you are making aliyah and what kind of work you are looking for. Beef up your LinkedIn profile and revamp your CV to fit with the Israeli style. Even if these measures don’t get you a job before you get here, they will certainly help once you arrive. 

Categories
Aliyah

US Taxes for American Expats in Israel 

Moving to Israel doesn’t end an American citizen’s tax obligations to the US government. If you’re an American expat in Israel, you need to understand  how US tax reporting affects you, so that you can make financially smart decisions.

US-Israel tax treaty

The US and Israel have signed a series of tax treaties which prevents dual citizens from being taxed in both countries. What this means practically is that you will be taxed in the country which is deemed to be your primary residence. This is determined based on many factors, primarily:

  1. Your habitual abode -You will be considered a resident of the country where you have the closer personal and economic relationship.
  2. Nationality – If you are a citizen only of one of the countries, you are considered a resident there. If you are a dual citizen, there are other factors that are brought into play.

If you are considered a permanent resident of Israel but maintain your American citizenship, you will likely not have to pay income tax on earned income in the US (there are exceptions on very high salaries), but you will have to file an income tax report each year. There are accountants in Israel who specialize in filing taxes for Israeli and American dual citizens, and it is generally preferable to work with them as opposed to hiring an American CPA who is not familiar with the issues facing dual citizens. (We have a long-standing relationship with Yosefa R. Huber, CPA, who assisted in the preparation of this article.)

Child tax credit

The United States government offers a tax credit per child which reduces the amount of tax that a citizen pays. For many dual citizens who are reporting income but not paying income tax, this can translate into a refund from the US government. At one time, it was popular for Israelis to go to great lengths to obtain American citizenship for their children in order to benefit from this payout, in situations where one parent was an American citizens but neither parent had ever lived in the US. However, due to the obligations these children will have to the US government in their adult life (starting with having to file an income tax report each year), parents should think carefully before going down that road.

FBAR

The FBAR (Foreign Bank Account Report, also known as FinCen Form 114) is a report that must be filed annually if you have an aggregate of over $10,000 in one or various non-US accounts, including savings accounts such as your pension fund, Keren Hishtalmut or Kupat Gemel. It is important to fill out this form before the deadline to avoid heavy fines. You can fill this form out yourself if you know exactly what needs to be declared. Otherwise, it is recommended to hire an expert to file on your behalf.

There is an additional report that you may need to file as part of your tax return if you exceed certain other higher thresholds. We advise you to speak to an Israeli-based US CPA if you think you may qualify for this requirement. 

US Social Security for the self-employed

If you’re a self-employed American citizen, the US requires that you contribute 15% of your income to Social Security. If you accrue 40 credits, you will get a monthly payout upon your retirement. The Social Security tax can be quite challenging for dual citizens, who are also required to contribute to Bituach Leumi (Israeli social security) and a private pension plan. These regulations can discourage people from opening a small business or freelancing. An alternative is to be employed by an Israeli company which issues your invoices and pays you a salary each month (Employer of Record service), while you maintain creative control over your business. 

Renouncing US citizenship

Some dual citizens feel that US citizenship is too much of a burden and that the privileges of voting in a US election and holding a US passport aren’t worth the headache of complying with US tax laws. Renouncing US citizenship is done by appearing in person at the US consulate, signing an oath of renunciation, filling out paperwork and paying a fee. It also requires giving up one’s green card, where applicable, not just letting it expire. You may also be liable for an exit tax, depending on your assets and past tax compliance. Renunciation is irreversible, so you need to be really sure before taking this step. 

Categories
Employment in Israel

How to Build a Network in Israel

It is often said that job-hunting in Israel is heavily based on “protexia” (connections) and there is definitely some truth to this. As an oleh, you might think that you are at a disadvantage, not having old school and army friends to rely on for support. And if you’re experienced in your field but have no former colleagues to help you find a job, that can be concerning as well.

But here’s the good news: Networks can be built at any age and at any point in life, and the prevalence of social media in our lives means that connections can be created virtually as well. Connections with people often begin online and become real friendships later on. Israelis are hard-wired to help others, as we have all grown up on values of chesed and kindness, so even a distant connection can be the one who will help you land a job.

You can start building your network even before you start actively looking for a job in Israel. Connect to people in your field and related industries on LinkedIn. Comment on their posts, ask questions and show interest in what they share online. Join industry-related and general job groups on Facebook and LinkedIn. Contribute where you can and connect personally to people in these groups who you would like to know in real life.

Israelis that are currently in the US are a great resource as well. Reach out to founders and ask them to meet for coffee and attend events happening in cities around the US. For instance, Israeli Mapped in NY and Israeli Mapped in Boston list Israeli startups in those cities and hold get-togethers for their members.

Once you are in Israel, it’s a good idea to attend networking events. These take place all over the country and many of them are in English (although you can always go to the Hebrew ones and find people who want to practice their English with you). Get to know people, write down who they are and what they do and ask them how you can be of service to them. When you get home, search for the people you met on social media and connect to them there. Write them a note about how much you enjoyed meeting them and will keep them in mind when you hear of someone needing their services, hiring in their field etc. 

Ask to meet some of them one-on-one for coffee, to continue the conversation you started at the event or to dive deeper into how you can help each other. (Remember, if you issued the invitation, coffee is on you.)

You can also join small networking groups that have regular events and where members try to help each other out as much as possible. There are BNI groups all over Israel and there are a number of English Speaking Networking groups as well. ESN combines professional development with networking support and also hosts occasional large events.

Don’t underestimate the power of “friends of friends.” Ask your friends who they know in your field and request they introduce you, so that you can connect to those people and be mutually helpful to each other. If you’re applying to a company, it pays to ask your friends whether they know someone who works there and can help get your CV seen. If a friend asks them to use their protexia as a favor to them, they might do it even if they don’t know you personally. 

When you’re actively looking for work, let people know what kind of job you seek and ask for leads of places that are hiring. You won’t find every relevant job ad on your own, so it’s great to have people looking out for you and sending you relevant ads that they spot. There are also jobs that aren’t widely advertised or haven’t been publicized yet, which you can find out about from connections. Don’t be afraid to look “desperate” by letting people know you are on the job hunt. It’s just like dating; if you don’t tell people you want to be set up, it won’t happen. Put the word out there that you are looking and you will get help from friends and strangers alike.

Lastly, don’t neglect your network once you have a job. You never know when you will have to rely on it again. And even if you never need it yourself, you will have the privilege of helping others advance their professional careers by utilizing your own protexia, just like a true Israeli.

Categories
Employment in Israel

The Hiring Process in Israel

Finding a job in Israel is often the biggest hurdle in the aliyah process and it’s compounded by the fact that the hiring process can be quite different from what you are used to. We’re here to clear up some of that confusion and provide clarity on what to expect. If you haven’t read our post on how to get a job in Israel, start there and then come back here to read about what happens when you apply for a position.

Step 1: Your CV lands in a pile

When you send your CV to a company, first a robot goes through the CVs to weed out totally irrelevant applications. Then, your CV lands in a pile of resumes from all the appropriate job seekers who have applied for the same position. An HR employee and the hiring manager on the team will skim through all the CVs to see who seems suitable. Notice that we said skim and not read, because they tend to glance at each one and make an almost-instant decision about whether to contact you. Your CV must have all the important information on top, be easy to read and be tailored to the job you are applying for. Make sure your skills and experience are easy to spot and relevant to the position.

Step 2: Phone interview

If your CV stood out, you will get a call or e-mail from an HR representative asking you to interview for the position. Companies will often start with a 15-20 minute phone interview before asking to meet you in person. Sometimes, you will get a call out of the blue and be expected to interview on the spot. If this is inconvenient, let them know very politely that this isn’t a good time to talk and schedule a time where you can be fully present. 

To prepare for this call, research the company online, review the job description and be ready with an answer to the question, “What are your salary expectations?” It’s best to give an honest answer when asked, so that you don’t waste your time or theirs continuing in the process with a company which won’t satisfy your salary needs. 

Because each company has a slightly different hiring process, this is the time to ask what the next steps are so you are prepared for whatever comes next.

Step 3: In-person interview

If the phone call went well, you will likely be invited to an in-person interview. This is the time to showcase what you bring to the table as well as to ask questions about the job expectations and get a feel for whether this job is the right fit for you. You’ll want to understand the hours required, the tasks you will be expected to complete and who you will be working with. For instance, if you’re being hired to interface with people in the US, will you be required to work American hours? This is an especially important question if you are interviewing for a position in sales, customer support, customer success or marketing. 

You also want to pay attention to the general atmosphere of the company to determine whether this is a place where you will feel comfortable and enjoy working.

Olim are often unsure what to wear to an interview in Israel, since the more formal wear they might have worn in their country of origin seems out of place here. The best way to determine what to wear is to look online at the company website and their social media to see how their employees are dressed. You want to dress similarly, but look as if you made a bit of an effort to look put together.

Step 4: Assignment and/or presentation

Companies in Israel sometimes ask you to complete an assignment in a fairly short deadline and/or prepare a presentation for your potential team members. The purpose of this “homework” is to determine whether you have the skills necessary for the job. You can look at this as another way to see if this job is a good fit for you. If you can complete the task with relative ease and enjoy doing it, you’re on the right track. But if it’s totally out of your wheelhouse, boring or frustrating, you may not want this job.

If you are asked to give a presentation, prepare for it so you go in confident and knowledgeable. If the presentation is in English, keep in mind that you may be presenting to people who are not native English speakers. They likely know all the professional terminology in English, but might not know other complex words, so stick to vocabulary they are likely to understand. 

Step 5: Checking your references

If the hiring team is seriously considering you, they will reach out to the references that you have mentioned on your CV. It’s important that you choose references who will say positive things about you, so make sure to list people you had a good relationship with. Ask them beforehand if they are OK with being listed as a reference. If they hem and haw, choose someone else!

If you can, let them know that you are in the advanced stages of a hiring process and they might be contacted in the near future. Tell them what job you are applying for and what skills are crucial for it. This gives them a chance to prepare and raises the likelihood that they will give a good impression of you. 

Step 6: Interview with the CEO

Depending on the size of the company, you may be asked to interview with the CEO of the company. In a small startup this is more common than in a big company, since you are likely to have an ongoing relationship with the CEO if you take the job. Find out what you can about him or her beforehand, ask about the company and show that you are excited about what the company does and how you can be a part of that.

Step 7: Negotiations

If you’ve made it this far, the next step is negotiating the contract. You will be offered a salary as well as other perks, such as number of vacation days and how sick days are paid. You don’t have to accept the first offer; negotiations are acceptable and expected. There are some companies that won’t budge, but there are definitely cases where asking for more – either salary or perks – can be successful. It’s important to negotiate politely and to decide for yourself what the minimum is that you will accept. It’s OK to walk away if their best offer is not acceptable to you. 

Once negotiations are over, you will get a contract to sign. Whether the contract is in English or Hebrew, it’s always a good idea to have a lawyer look over the contract and ensure that you aren’t signing anything you aren’t aware is written there. If you find something objectionable, ask for an explanation and possibly ask for it to be removed. Again, don’t sign just because you got this far. Only sign if you are satisfied with the contract and want the job.

Step 8: Start working

If you are currently employed, you will have to give notice at your previous place of employment and start working only after that. You can ask to start work a bit after that, if you feel that a short vacation will help you transition and start the new job with more energy. Depending on the company’s needs, they may be more or less flexible on start dates. In any case, they generally expect that you will start working pretty soon after the contract is signed.
The first days at a new job are always going to be challenging. Focus on learning the job, interacting with your colleagues and fitting into the company culture. Update your CV with information about your new job and maintain your professional network, since you may need it again sometime down the line. Most importantly, enjoy your new job!

Categories
Bringing Your Existing Job to Israel

How to Work from Israel for a US-based Company

Here at Route 38, we often get asked, “Why can’t I be a W-2 in Israel?” Many olim assume that they can simply work for an American company while living here, in exactly the same way they did before they made aliyah. Unfortunately, this is far from the truth.

What Is a W-2 employee?

A W-2 employee is someone whose employer deducts taxes from their paychecks and reports on this to the government. At the end of every tax year, the employer must send its employees their Form W-2, which delineates all the income earned and taxes withheld. This form is also sent to the IRS. W-2 doesn’t apply to contracted or self-employed workers.

There is no law in the United States against hiring employees in other countries, but the US company would have to comply with Israeli labor law as it relates to taxes, employee rights and other statutory commitments. They would also have to open a payroll tax file with the Israeli Tax Authority.

If you’re a recent oleh and physically work in the US while commuting back and forth to Israel, you can work as an employee of a US company with a W-2. You will need to pay taxes on any income earned while in Israel, but will be exempt from Israeli taxes on money earned while physically in the US.

Sounds simple, right? Unfortunately, the US company now has a potential Israeli tax exposure on its Israeli source profits. Additionally, the company must operate Israeli tax withholding, pay taxes to the Israeli government and register at the VAT office and pay VAT. Most American companies don’t want to take on these responsibilities, so they won’t employ an Israeli on a W-2.  

Alternatives to working as a W-2 employee

You may be wondering, if it’s so complicated to work for a US company, how is it that I know so many Israelis/dual citizens who are doing it? There are three popular alternatives to working as a W-2 employee:

  1. Freelancing 
  2. Employment by an Israeli Employer of Record service (payroll company)
  3. Open your own Israeli company (Chevra Ba’am)

If the company you want to work with is open to both these options, consult with an accountant who understands US and Israeli tax law to figure out which is best for you. It’s possible that you may decide that it’s more beneficial to seek employment with an Israeli company, or you might find a solution that works for you and for the US company, and enjoy a fruitful business relationship with them for the long-term.

Ways to work from Israel for a US-Based company

As you can see, a foreign employer can’t directly employ you overseas without setting up a payroll tax file or legal entity here. Since this opens the company up for tax exposure issues, they are unlikely to want to do this for only one employee. Let’s look more deeply at the other ways that you can work from Israel for a US-based company and consider the pros and cons of each option so you can choose the one that’s best for you.

Become a freelancer

You can set yourself up as a freelancer in Israel and the employer will then contract you as a consultant. 

Freelancing can be a blessing and a curse. If you were a classic freelancer working for more than one client, you would enjoy the advantages of making your own schedule, deciding which clients to work for, setting your own prices and not having a boss-employee relationship to contend with. On the other hand, you wouldn’t get vacation or sick days, you would pay more into Bituach Leumi and you would have no steady income.

When you set yourself up as a freelancer for the purpose of working with an American company, you still have no legal rights such as vacation and sick days, you will have to pay Bituach Leumi as a freelancer and will most likely need an accountant to manage your books. If you are an American citizen, you will also have to pay Social Security taxes in the US. But if you are working for a US company, you likely won’t get to make your own schedule, decide who to work with or be on an even footing with your boss. In some ways, you are taking on the obligations of a freelancer without enjoying the benefits.

Before you take this step, it’s important to weigh the advantages and disadvantages as they pertain to your individual situation.

  1. Is the salary being offered to you high enough to offset the extra costs?
  2. Is your US company offering you flexibility, such as work during Israeli hours or at any time you choose?
  3. Are your bosses bothered by your designation as a freelancer, since it weakens the employee/employer relationship?

Use an Employer of Record service

If freelancing seems like a bum deal to you, but you really do want to work with an American company, you can choose to be employed by an Employer of Record service such as Route 38.

In that scenario, your employer pays Route 38 monthly and Route 38 pays your salary in accordance with Israeli law. This is simple for your employer to set up, since Route 38 takes care of all the bureaucracy. It’s easy for you as well, since you get a pay stub (tlush maskoret) like any other Israeli employee, can get paid in shekels in Israel or dollars in the US and all necessary deductions (pension, health insurance and income tax) are withheld for you.

What is an Employer of Record (EOR) service?

An EOR is a company which takes on the responsibilities of employment for employees who are providing services for other businesses. In the case of Route 38, we employ people working in various fields, usually for companies based abroad. We provide our employees with an Israeli pay stub (tlush maskoret) and we deduct all the legally required deductions. 

How is this different from a Professional Employment Organization (PEO)?

A PEO doesn’t take full responsibility, rather shares responsibility with another employer. This is a solution that only works if the hiring company has an entity in the relevant jurisdiction (in this case, Israel). This is a solution that works well for a company that has 5-10 employees in Israel, although their main office is abroad. It must cover all the employees belonging to that company in the country.

An EOR such as Route 38 takes full responsibilities for the employee. The company doesn’t have to have an entity here in Israel. It can cover some of the employees and doesn’t have to cover them all. There is no minimum number of employees, so this is a great solution for a business which wants to work with only one person in Israel. We take care of HR, taxes, payment terms, payroll funding, workers compensation and unemployment claims.

What are the associated costs?

There are registration and termination fees as well as a flat monthly processing fee. It’s best if you can get your US employer to cover these fees, otherwise it will be deducted from your salary.

Advantages of Working through Route 38

  • Easy to get paid by employers abroad. We maintain a US bank account, so it’s easy for the employer to pay invoices. Your salary is then paid directly into your Israeli bank account. You don’t have to deal with the headache of exchange rates and change fees and they are automatically deducted from your salary.
     
  • Simple for employers to navigate.
  • No need to become an Israeli freelancer and deal with the effort and expense of reporting. The disadvantage of freelancing is that you are required to report your income annually or bi-monthly. Most freelancers find that this is complicated to do independently and hire an accountant or tax advisor to assist them with reporting. This is an added expense that comes off their salaries.
  • Avoid self-employed status in the US and its consequences vis a vis Social Security payments. Self-employed Israelis who are also US citizens are required to deposit 15% of their salaries in Social Security.
  • Office space. We maintain an office in Jerusalem, where our employees can come to work. Bring your laptop and enjoy our wifi, kitchen and friendly atmosphere. Book our conference room for meetings.
  • Collaboration opportunities. Because we employ many different types of professionals, you can easily find colleagues to provide services that you need. 

Is it legal? I heard that Bituach Leumi doesn’t like these companies.

In 2014, a key player in the industry in Israel was sued by Bituach Leumi, because its clients were paying lower Bituach Leumi fees as if they were employees, while acting as freelancers. The company lost the court case and had to change its business model as a result. Employer of Record companies which have been established since then follow the new business model which is in accordance with Bituach Leumi’s regulations.

Opening your own business

Another solution is to open your own Israeli company, called a Chevra Ba’am in Hebrew. In this situation, you become an employee of the company and are issued a regular Israeli pay stub. Accounting fees are higher than in the other options, because reporting income to the Israeli government is more complex. If your company is small, a freelance CFO can take care of all financial issues, but this is still a significant expense. The biggest advantage of creating a Chevra Ba’am is that you can scale your business and easily employ others to help you grow and expand.

Getting the right advice

The employment structure you choose will affect your finances as well as your relationship with your employer, so it’s important that you get the right advice in order to make an informed decision. One common mistake many olim make is consulting with an American CPA living in the United States about their finances in Israel. Because the average CPA is, understandably, unfamiliar with Israeli tax laws, their advice is often misguided and can lead to issues later on. The better choice is to consult with an American CPA living and working in Israel, who is an expert both in American and Israeli tax law. It is also possible to consult with a firm which employs both American and Israeli accountants, who work in collaboration with each other to give their clients the service they need. 

We at Route 38 are extremely knowledgeable about tax law in both the US and Israel and we offer paid consultations to people who are trying to figure out how to structure their employment arrangement with an American employer. If relevant, we will suggest our Employer of Record service, but we will also tell you if this is not in your best interest, and you would be better off with a different type of arrangement. Book a consultation with us by emailing info@route38.co.il.

Categories
Business in Israel

What’s the Best Way to Take on a Short-Term Freelance Project in Israel?

All freelance work performed in Israel must be reported to the Israeli government and is subject to tax. If you own a business, there’s a system in place for generating receipts and reporting your income to the tax authorities. But what if you are an employee that wants to take on a short-term consulting gig? Or a student helping a professor with a research project? What if you’re currently unemployed and have been offered a few weeks of work on a timely project?

One option is to report to the government that you have made a business arrangement called “Iskat Akrai” – a temporary business agreement. This is done directly on the Tax Authority website or by filling out Form 8356 and bringing it in person to the offices of the Tax Authority. You will then receive an official tax receipt which you send to the entity which hired you as a consultant. The payment you receive is liable for Bituach Leumi (Israeli Social Security), income tax and VAT. This option is only available for a one-time payment, so if you provide a service for a few months, you can’t use multiple Iskaot Akrai to be paid each month, and will have to accept payment in one lump sum.

Another option is to ask the entity that hires you to put you on their books as an employee and pay you with a Tlush Maskoret (pay stub), in which taxes and Bituach Leumi are withheld automatically. If you have another job, you will need to notify the Tax Authority, by performing a Teum Mas (tax adjustment) online. In the absence of a Teum Mas, each employer will withhold the highest tax rate. When you report both incomes, the Tax Authority instructs each employer how much tax to withhold. 

Not all employers will agree to put you on the books for a short time, due to the extra paperwork involved, so this is not always a possibility. 

The third option is to register as an employee of an Employer of Record service. That company will then issue an invoice to the entity hiring you and send them a receipt once payment has been made. This option is easier for the hiring body, but you will still need to fill out a Teum Mas, since you will be considered a person with more than one job. 

How do you know which option is best for you? The deciding factor may very well be the employer’s preference, since it has to be worth their while to hire you. You want to make it easy for them to pay you, otherwise they might choose to hire a different consultant, who already has a registered business. If you are able to choose, consider whether you expect to receive more than one payment and whether you prefer the bureaucracy involved with an Iskat Akrai or with a Teum Mas.

Remember that a one-time consulting gig may very well turn into something more long-term or give you a taste for freelancing that you want to pursue. If that happens, you may find yourself opening a business after all.

Categories
Aliyah Bringing Your Existing Job to Israel Outsourcing to Israel Podcasts

Make Aliyah and Work for a US Company

Baruch Swinkin, CFO of Route 38, was interviewed by the famous Nachum Segal about how Americans can make aliyah and work for a US company. Listen to it here:

Just want the cliff notes version of the interview? Here you go!

Want to make aliyah but concerned about how to make a living in Israel?

Route 38 provides a simple and seamless solution for American olim working for companies in the US. Our Employer of Record service is perfect for:

  • Americans who want to make aliyah and keep their American jobs by working remotely
  • Olim who have been living in Israel for a while and want to transition to a remote job in the States
  • US companies who want to tap into the talent and resources of the “Start-Up Nation”
  • Religious Jews who want to grow their business with American ex-pats they feel comfortable with and support the Israeli economy at the same time

An Employer of Record service helps navigate the challenges of tax reporting for dual American-Israeli citizens, so that they can concentrate on their work, secure in the knowledge that their income is being reported in Israel and that they aren’t being “double-taxed” in both countries.

Feel free to reach out to us at info@route38.co.il to hear more about how we can help make your dreams come true.

Categories
Employment in Israel

The Termination Process

The process of firing an employee in Israel is set out clearly by the law, and the termination process seeks to protect the rights of the employee. 

An employer can’t fire an employee without a hearing (shimua). The employer will send a notice to the employee inviting him or her to a hearing. This notice must include the reasons that the employee is being fired and be sent with enough advance notice for the employee to prepare for it. The employee can come alone to the meeting or bring a lawyer or other representative. He can refute the claims and make the case for his continued employment. Alternatively, he can waive his right to a hearing, if he so chooses.

If there is a legal reason why the employee can’t be fired, such as pregnancy or pending army service), this is the time to bring that up.

The hearing is not meant to be a formality, and the employer is supposed to seriously consider the employee’s argument before making a final decision. Nonetheless, most people who have attended a termination hearing do end up getting fired.

After the company has decided to go ahead with termination, a written notice will be sent detailing the date on which the employment is terminated. An employee who has worked at the company for at least a year is entitled to a month’s notice.

Within 14 days of termination (or 7 days after the employee requests it), the employer must send a letter of termination which states the start and end dates of employment. 

An employee who has been at this workplace for a year or more is entitled to severance pay upon being fired. Severance is one month’s salary for one year of work, unless the employee’s contract promises more. If the employer fires an employee shortly before the end of the first year of employment, this is likely to be seen by the labor courts as an attempt to avoid paying severance. If this happens, the fired employee should seek legal counsel.

If the employee has unused vacation days, the employer is required to pay a regular day’s salary for each one.

Now is the time for the employee to find out whether he is eligible for unemployment from Bituach Leumi, and if so, to apply for it. He should also tweak his CV and begin the search for new employment. 

Categories
Business in Israel

Maternity Leave as a Business Owner

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.

Categories
Employment in Israel

Quitting your job: What are your rights and obligations?

If you are not happy with your job or you have found a better one, it may be time to quit your current job and move on. Israel is a small country and almost everyone is connected in some way, so it’s important to leave in a professional way and on the best terms possible. 

Make sure that you give proper notice according to the law. Israeli employment law states that an employee who has received a monthly salary in an organization for up to one year must give notice as follows: one day for each of the first 6 months of employment and two and a half days for each additional month of employment. If you have been working at the same company for over a year, you must give one month’s notice. 

An hourly or daily worker who has worked up to one year must give notice of one day per month of employment. A worker of 1-2 years needs to give notice of 14 days plus one day for each two months of work in the second year, with a cap of 20 days. A worker of 2-3 years gives notice of 21 days plus a day for each two months worked during the third year. After 3 years, the notice period is a month.

If your contract says that you must let your employer know that you are resigning earlier than the legal requirement, you can still give notice according to the law and no legal action can be taken against you. Of course, this might anger your employer, so consider whether you want to do this.

You will work as usual during the notice period and receive your regular salary. You and your employer have the right to agree mutually to shorten the notice period, but it can’t be forced on either of you. If you have vacation days saved up, you can use them during your notice period, unless your employer needs your services and insists that you work. 

You will want to let your senior bosses know in person that you are leaving before you write an official resignation letter. They will almost certainly ask why you are quitting. This is not necessarily the time to tell them every single thing you hate about working at their company. You can give one or two reasons that are true but not accusatory. Or you can simply say that you have found a better opportunity or want to change directions in your career. Mention some of the things you enjoyed or learned at the company to soften the blow and leave a positive impression.

Work out your notice in the best way you can. If the company has already hired a replacement, train the new employee to make the transition as smooth as possible. 

Once you have left, beware your instinct to badmouth your previous employer in public or on social media. Your comments may very well get back to your bosses and leave a bad taste in their mouths. Remember that you may need a recommendation from them someday or that they may be asked about you in the future by potential employers. Israel is, after all, a very small country.

Categories
Business in Israel

Show Me the Money

Pension Tips and Investment Risks with Motty Handler

Our second networking event was a huge success! We learned all about saving for retirement from Motty Handler, while enjoying sushi, fresh fruit and candy. Most importantly, we met other professionals, traded advice and dreamed up new collaborations.

Check out these pictures from the event:

Categories
Employment in Israel

Resources on Employee Rights

Do you know your rights as an employee? We recommend having a general working knowledge of the employment laws in Israel. Employees who are not well-versed in their rights can be taken advantage of, and this can easily happen to olim who don’t ask the right questions (or ask the right people).

Additionally, there can be specific issues that you need in-depth information on, such as the intricacies of termination, maternity pay and pensions. Our goal here is to provide as much helpful information as possible, but if you need greater detail, here’s how to get it.

The Kol Zechut (All Rights) website is partially translated from the Hebrew site and includes many articles on all aspects of legal rights, from health and disability to immigrants and old age. There are numerous articles about employment issues, such as pensions, National Insurance, income tax, labor laws and more.

Kav LaOved is an Israeli nonprofit organization which provides individual help to employees who suspect that their rights have been violated or who want to better understand their circumstances. The organization has office hours and a hotline and can also be contacted via email. The website provides some English language brochures about topics such as work accidents, hourly workers and women’s rights in the workplace.

For more general information, see Nefesh B’Nefesh’s online article on Employee Benefits. This article covers some of the basics of the employee-employer relationship and Israel labor laws.

The Human Resources representative at your company is also a useful resource. In larger companies, there may be an entire HR department, but even in smaller companies, someone is in charge of HR. If you don’t know who that is, ask. The HR representative should be able to explain your pay stub, assist with specific questions and provide you with necessary forms. 

There is strength in community. You can easily get answers to employment questions by posting on olim social media groups, especially those that are dedicated to career discussions. Of course, not all these answers will be accurate, so take them with a grain of salt, but there is often a consensus on legalities and processes which can point you in the right direction. These groups can also provide firsthand experience of other olim, which is often invaluable.

Knowledge is power and this is certainly true in the realm of employee rights. Awareness can help you choose the right job, get what you deserve in your job and leave a job in the right way.

Categories
Business in Israel

Office Space in Har Chotzvim

Route 38’s office space in Har Chotzvim, Jerusalem is available for rent. Choose a dedicated desk or a private office. Take advantage of the conference room, internet, printing facilities and free hot drinks.

Additionally, members of the Route 38 family may come and enjoy any of our hot desks for free , up to 20 times a year.

Prices for monthly rentals are as follows:

Categories
Business in Israel

Networking at Route 38’s New Offices in Jerusalem

On March 9, 2022, Route 38 celebrated the opening of its new offices in Jerusalem with its first networking event. A light dinner was served in the lobby of the new co-working space in Har Hotzvim, accompanied by lots of schmoozing. This was followed by short presentations by Baruch Swinkin and Yael Frydman and a networking session by Helena Baker, in which she taught everyone how to give an unforgettable elevator pitch. And we will certainly not forget Mike Kashnow’s pitch!

Here are a few pictures from the event:

Categories
Uncategorized

Podcast: Israelis, Remote Work and Your Business

Are you a business considering hiring Israeli talent? You don’t want to miss this interview with Baruch Swinkin, CFO of Route 38. You’ll get the whys and the hows of hiring Israelis when you don’t have (or want) an office in Israel.

Categories
Business in Israel

Osek Patur – Guidance for Your New Business

Mazel tov on setting up your new business! If you’re just starting out, chances are that you will be an “Osek Patur,” a business which is exempt from collecting and paying VAT. The following is a brief overview of what you need to know for your new Osek Patur.

  • Mas Hachnasa- Your tik (file) in Mas Hachnasa (Israeli Tax Authority) is registered on both your name and your spouse’s name.
    Every year a Doch Shnati (annual report – tax return) is submitted which should include all income earned both in Israel and abroad for both spouses. If you work with an accountant or tax consultant (and we recommend that you do), send your receipt book, expense invoices and any other documents you have to your accountant in January of the next year for preparation of the Doch Shnati.
  • Bituach Leumi (National Insurance) – If, according to the definitions of Bituach Leumi you are required to make payments to National Insurance, you have the choice to pay via credit card or a monthly set payment (horaat keva). You should set this up as quickly as possible so you don’t end up with back payments.
  • Ma’am (VAT) – Your file at the VAT office is only under your name and doesn’t include your spouse. The updated ceiling for your income in 2021 is 99,893 NIS per year. Please check your income during the year making sure you are not approaching the ceiling, and if you are please update the VAT office as soon as possible.
  • Revenue recognition (receiving payment from a client) –  Israeli accounting requirements dictate that an official receipt (kabala) must be issued immediately upon receipt of payment from a client, or as soon as you become aware of a cash receipt (in the case of a bank transfer). It is important that this practice is strictly enforced. Non-issuance or late issuance of invoices may cause accounting complications and headaches, even possibly fines.

Receipts can be issued in two ways:

  1. Use of online programs or applications – many of which are easy to use and are readily available, including: Easy Count, Cheshbonit Yeroka, Cheshbonit Online, iCount and more. (Some are free and some come with a low monthly fee.)
  2. Manual receipt book – this book can be purchased and printed in a printshop. Ask them for a receipt book for an Osek Patur – Original + two copies per receipt.

The invoice must include the following details on the top:

Full name/Business name, Address, Phone number of the business and osek patur number (which is generally your teudat zehut number).

The receipt should provide information about the service provided and the method of payment (cash, bank transfer, check – including check number). If payment was in another currency, include the rate of exchange to shekels. 

  • Important highlights when filling out a receipt:
    • Receipts should be issued at the time of the receipt of payment, even if the service will be provided at a future date.
    • The dates and numbers of each receipt must be consecutive. Do not issue receipts out of order!
    • The original should be given to the client, and copies should remain with you (the business).
    • When a receipt has to be cancelled, or a numbered receipt was skipped, the cancelled/skipped receipt should stay in the book and you should write “cancelled” or “skipped” on it.
    • Receipts in the amount of more than 5,000 NIS should include the client’s teudat zehut or business number in addition to their full name.
    • In cases of receipts over NIS 11,000, per law, cash cannot be exclusively used – payment must be remitted via check or bank transfer.
  • Saving expense documents/paperwork:

It is strongly advised to keep as many expense documents as possible. Any expense that you submit will save you from higher income tax and Bituach Leumi payments.

It is also advised to keep donation receipts in order to reduce tax payments (or receive a tax payment refund), if you have any. Please note that receipts must be from Chapter 46 recognized organizations,and their status must be noted on the receipt. This applies even in years that one did not make any tax payments, as donation receipts may be used for 4 years.

The following are considered direct business expenses, and are 100% recognized and deductible:

  1. Furniture and equipment for business, office equipment
  2. Travel by taxi and public transportation
  3. Advertising, marketing, education, advanced training
  4. Accounting, professional advice/consulting
  5. Subcontractors (external consultants, professional temp positions)
  6. Credit card fees

Indirect/mixed expenses, partially recognized:

  1. Private car expenses (including insurance, license, fuel, maintenance/repair) – 45%
  2. Cell phone – 50%

Home expenses- 25%:

  1. Landline, internet
  2. Electricity, water
  3. Municipal taxes (Arnona) and Homeowner Association Fees (Va’ad Bayit)
  4. Renovations
  • Inventory

One is obligated to count all inventory in one’s possession on December 31st of every year, in the event that one has raw materials or equipment or other items for sale that require evaluation. 

  • Hatzarat Hon (Financial statement):

Sometime after the opening of your independent contractor tax file, Mas Hachnasa will request and require a Hatzarat Hon (financial statement) as of December 31st of the year that the tax file was opened. The statement details all the assets and liabilities of the business owner as of the date of the statement. Additional Hatzarat Hon requests are generally made once every 4-5 years.
It is generally recommended to submit this statement with the help of an accountant or tax consultant, since it can be complex. The first one should certainly be submitted with professional assistance, since it serves as the basis for all future statements.

Categories
Business in Israel Podcasts

Podcast: A Story That’s Worth a Thousand Words

Videographer and photographer Yirmiyahu Vann is an expert in visual storytelling. Listen to his tips on getting great headshots, creating meaningful videos to grow your business and mountain biking in Israel (VR camera in hand)!

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Business in Israel Podcasts

Podcast: A Couples Therapist in Israel Shares Intimate Details

Abby Weisz, LCSW, M. Ed, tells us about her work as a marriage therapist focusing on sexuality and intimacy: What made her choose this field, why she’s sad to have so much work and what rabbis say about what she does. Oh yeah, she also tells us why she chose to work with Route 38 in their Wellness Center division and how that helps her run a successful therapy practice.

Categories
Employment in Israel

How to Get a Job in Israel

One of the biggest challenges of moving to any new country is finding a job and aliyah to Israel is no exception. It can be daunting to seek employment in a country where the norms are different from your home country, the primary language is Hebrew and everyone else seems to know each other. But have no fear; many olim are gainfully employed in Israel and you can be too.

Resume/CV

Your first step in your job search is to create a resume (or CV as it tends to be called here) that fits Israeli standards. CVs should be one page long and include a list of skills above your experience and education. If you’ve had many jobs, remove the oldest ones and the least relevant to the job you are applying for, so you can keep to the one page format. 

Whether you need a Hebrew CV is dependent on the industry you work in and the type of job you are looking for. Even many Israelis submit English CVs, especially in the hi-tech industry. It’s best to ask around in your industry (you can easily do this on a Facebook or LinkedIn group if you don’t personally know anyone who works in the field) to find out what language your CV should be in.

Until recently, CVs always included personal information like marital status, children and home address, so you might be told to add these to your CV. But most experts in job hunting are now recommending against this, since these personal details can cause prejudice.

When sending a CV to a company, include a cover letter in your email of up to 5 sentences, detailing why you are the right person for this job. Your cover letter should be tailored to the job you are applying for, so send a different one for each application. 

It’s important to have references prepared as companies will often ask for them. If there’s no room on your CV to list them, you can leave them out, but make sure that you have names ready and that you have asked for permission to share their contact information. Be sure to add a line on your CV that says “References available upon request.” If you are asked for references, provide names, phone numbers and email addresses.

Job Postings

One place to search for a job is online. There are a number of Hebrew job posting websites (some may require a paid membership) and the Nefesh B’Nefesh Job Board and Janglo website list jobs that are geared specifically to olim, many not requiring any Hebrew. Jobs are also listed on Facebook and LinkedIn groups, especially those catering to English speakers. Cities with large Anglo populations tend to have local Facebook groups which may have job opportunities and there are also groups devoted to job postings and career advice.

“Protexia”

It’s true that a lot of Israelis find jobs through relatives and old army buddies. You may not have those, but you might have friends who made aliyah before you, acquaintances who are willing to lend a hand and Facebook friends or LinkedIn connections who are happy to support fellow olim. Put yourself out there by calling and posting on social media about the kind of job you are looking for. This is commonly done by Israelis, whether they are looking for their first job or have left their previous job for whatever reason. You may hear about positions that haven’t been advertised yet or get your CV on the top of the pile because of a personal recommendation, so this is well worth doing.

Reaching Out to Companies Directly

If there’s a company you would like to work for, you can reach out directly to their HR department and ask if they are hiring. Even if they aren’t, they will often keep your CV on file and contact you later if an appropriate position becomes available.

Working for a Foreign Company

If you have previously worked in a company with offices around the world, find out if there’s an Israeli office you can apply to work at. You might even be able to transfer your existing position to the Israeli office. It is also possible to work for a company outside of Israel, if they are comfortable with hiring a remote employee. Many olim work from home or in a shared workspace for a company based in their home country. 

This won’t always work, since many local subsidiaries of global companies are not interested in putting an employee of a foreign subsidiary on their books due to factors such as budget, headcount restrictions and payroll imbalance. It never hurts to ask, though!

Headhunters, Career Consultants and HR Companies

Depending on your industry, you may find that a headhunter can help match you with a position that’s right for you. Headhunters specialize in helping companies (usually large ones) find the right employee. They are paid by the firm which is hiring and do not take payment from job seekers.

Career consultants help people navigate the job search. They are paid for their time and expertise, regardless of whether you find a job. According to Marna Becker of MRB Consulting, career consultants can help you by sharing their built-in network, improving your CV, boosting your networking skills and troubleshooting why you’re having trouble finding a job.

Career consultants are especially useful if you are looking for your first job in Israel, don’t have a strong network here and are not familiar with the norms and company culture in the country. They are also helpful if you’re just entering the workforce and need help deciding what profession to pursue based on your skillset, personality traits etc. Additionally, a career consultant can be of great assistance if you’re contemplating a career change and aren’t sure what you want to do or how to transfer your skills to a new field.

There are also human resource companies which specialize in placing employees in positions. Be aware that these companies are sometimes also the employers, and the salary and perks of the job may differ from those offered to the employees of the company proper. 

When to Apply

If you’re making aliyah now, be aware that Israeli companies tend to want their employees to start sooner rather than later, so searching for a job months before moving to Israel is likely to be futile. Use that time to check out the job market in your field and make some connections, and start applying shortly before aliyah or once you are already here.

If you are currently employed in Israel, make sure you know how much notice you need to give your current employer, so you don’t end up in a situation where you can’t take a job you were offered due to an early start time. (The notice period is generally a month if you have worked at a job for at least a year.) If you’re on maternity leave, start looking for work close to when you are willing to start a new job. 

An exception to this rule is if you are in a field where contracts are on a set schedule, like education. Conventional wisdom is to start searching for a position in education around Pesach time, in order to start in September.

The Interview

Job interviews are often less formal and this can take some olim by surprise. Questions might range from the professional to the personal, and don’t be surprised if there’s some Jewish geography mixed in. Candidates are often asked what their salary expectations are. You can sometimes turn the question on them and get them to tell you what they want to pay, but this won’t always work, so be prepared with a range and be open to negotiation. 

Job hunting in Israel may take some time, but the jobs are out there and you can certainly find one. Wishing you a successful and smooth job search!

Categories
Employment in Israel

Vacation Days and Sick Days in Israel

Israeli labor law has determined a minimum number of vacation and sick days, but company policies may differ and you may be entitled to more benefits than legally required. Here we delineate what is legally required.

National Holidays

Employees are entitled to up to 9 paid vacation days for national holidays, assuming these days fall on a weekday. These holidays are religion-dependent. For Jewish workers, the days are:

  1. First day of Rosh Hashanah
  2. Second day of Rosh Hashanah 
  3. Yom Kippur
  4. Sukkot
  5. Simchat Torah
  6. First day of Pesach
  7. Last day of Pesach
  8. Yom Haatzmaut
  9. Shavuot

Employees who usually work on Fridays or Shabbat get paid for these vacation days if they fall on a weekend, but employees who work Monday-Thursday are not paid extra for national holidays that don’t fall on a work day.

Additionally, there are other days which are not national holidays but which any Jewish employee can take as one of their accrued vacation days (up to one day per year). These are called “Yemei Bechira” (chosen days):

  1. Erev Rosh Hashanah
  2. Tzom Gedalya
  3. Erev Yom Kippur
  4. Erev Sukkot
  5. Hoshanah Rabbah
  6. Sigd
  7. Asarah B’Tevet
  8. Taanit Esther
  9. Purim
  10. Shushan Purim
  11. Erev Pesach
  12. Erev Shvii Shel Pesach
  13. Mimuna
  14. Lag B’Omer
  15. Erev Shavuot
  16. Shiva Assar B’Tammuz
  17. Tisha B’Av

Annual Vacation 

An employee’s allowance of vacation days depends on whether the job is full or part time, how long the employee has worked at the company and how many days a week the job requires. The minimum number of annual vacation days for a full time employee is 12. 

It is within the employer’s rights to determine when an employee can take vacation and it is legal for the office to be shut down for a specific time period and all employees required to take their vacation at that time. If the enforced vacation is for 7 days or more, the employee must be informed at least two weeks in advance.

Employees are entitled to take one vacation day a year at any time, without need for the employer’s consent, on the condition that the employee notified the employer thirty days in advance.

Days Off Which Aren’t Vacation Days

Employees who are absent for reserve duty, a worker’s strike (unless they are government employees), maternity leave, mourning/shiva or national elections do not have these days deducted from their annual vacation days.

Sick Days

A salaried employee who works full time at once place of employment is eligible for 18 sick days a year (1.5 per month). Sick days can be used for one’s own sickness or in order to care for a family member who is sick. Legally, the employee isn’t paid for the first sick day. The second and third days are 50% pay and the fourth and on are 100% pay. In order to be eligible for this payment, the employee must provide a sick note from a doctor.

Contract Negotiations

Some companies stipulate in their contracts that the employee is entitled to more sick days, that they pay for the first sick day as well or that they offer more vacation days than stipulated by law. When negotiating a contract (either for a new job or in the case of a promotion) these stipulations can often be negotiated. Sometimes, despite a company standing firm on the salary they are offering, they are flexible on vacation and sick days. It is considered acceptable to bring this up in salary negotiations and may result in an improvement in working conditions.

Categories
Employment in Israel Podcasts

Podcast: Employee Rights: What You Need to Know

Yael Frydman, COO of Route 38, knows almost everything there is to know about employee rights and she shares what you should be aware of. 

Categories
Employment in Israel

Israeli Company Culture (and Your Culture Shock)

If you’re just entering the workforce in Israel, you may find that the company culture here is different from what you are used to in your home country. Not every company in Israel is the same, and there are differences between industries and locations, but a group of working women in Israel who belong to the ImaKadima Facebook group have helped us compile a list of characteristics that you are likely to encounter in the Israeli workplace.

Bear in mind that Jerusalem offices tend to be more toned down than offices in the Tel Aviv area. Jerusalem offices are often more heavily religious and that affects workplace culture as well. Some of the characteristics described below are true across the board, while others are more likely to be experienced in the Merkaz (center of the country).

Formality (or lack thereof)

Israel tends to be less formal in general and this is never more true than in the workforce. It starts with the way people dress and talk and even affects management.

Most companies do not have a dress code and casual dress is the norm. There are very few companies where people wear suits to work and many workplaces where jeans and flip-flops are perfectly acceptable.

Israelis tend to speak at work in the same way they speak to their friends or random strangers on the bus. You might be surprised to hear people speaking loudly, very directly and even sounding like they are having an argument, but none of these things are considered rude in Israel. It’s likely that you will be expected to make your opinions known and not beat around the bush.

There is less deference to hierarchy at Israeli companies. Management tends to be more accessible and more open to socializing with employees. Bosses (or their HR departments) often organize mandatory “fun days,” which can be very informal. Alcohol is often served at company events and people are encouraged to let their hair down a bit.

Vacations and absences

Israeli law requires minimum vacation days, but employers can dictate when those vacation days take place. Some companies have mandatory shutdowns during periods when many employees want to take off or when productivity is low. So you may find that your company is closed on chol hamoed or during the last two weeks of August. In some companies that stay open, there is a much smaller staff since a lot of employees choose to take their vacation days at those times.

A large number of Israelis serve in the military reserves (miluim) until their early forties. So your colleagues might be off of work for an extended period while they are in the IDF.

International travel has become popular in Israel in recent years, and it’s not unheard of for employees to take off for a week or two in order to vacation outside the country.

Blurred Boundaries

If you’re used to very strict boundaries between your personal and professional life, aliyah is a good opportunity to let go of them. Coworkers tend to be open about their personal lives, discussing children, spouses and even politics. Colleagues invite each other to family simchas and give each other gifts for events.

Hot topics like politics or religion are not taboo and heated discussions can happen, with everyone still staying on friendly terms. Coworkers may share their feelings and be more free with hugging and kissing. Sometimes personal discussions veer into gray areas, such as asking a woman about her plans regarding getting pregnant. You don’t have to answer any questions that make you uncomfortable or could lead to discriminiation, but it’s best to avoid them elegantly.

In many workplaces, it is acceptable for family and friends to come by to say hello. Even children are welcome in these offices, as long as they aren’t too disruptive.

Work Hours

The Israeli work week is fairly long. A full time job (without overtime) is 42 hours. Many companies work Sunday to Thursday, which translates into nine-hour days. Some companies (and especially governmental institutions) have shorter hours for working mothers.

If you get a job offer with a global salary, this means that you are expected to work overtime. The exact details must be laid out in your contract and adhere to the laws on compensation for overtime.

Some workplaces have electronic time-clocks, where you clock in when you arrive and clock out when you leave. The time clock protects both you and the employer in case of a dispute about work hours. Mas Hachnasa (Israel Tax Authority) requires that hours worked appear on your monthly pay stub.

Salaries and Benefits

Salaries are paid monthly (by law they must be paid by the 9th of the next month). This might be a culture shock if you are used to getting a paycheck every two weeks. Most employers will take your bank account information and pay you by direct deposit.

It is common for employers to give their staff presents before Rosh Hashanah and Pesach. These might be gift baskets, housewares or a gift certificate. Some companies allow their employees to choose a gift from a list of options. Other employers will not give gifts at all or will give something symbolic, like a bottle of wine. Note that gifts from employers are often taxable.

Breaks

Smoking is ubiquitous in Israel and with it cigarette breaks. Coworkers may use their smoking breaks as a time to socialize or to talk business. Lunchtime is also a social occasion at Israeli workplaces. Colleagues tend to eat together, talking, laughing and getting to know each other. Employees may order in, get takeout from a nearby restaurant or bring their own food. 

Some companies (especially in the hi-tech industry) provide their employees with lunch cards such as 10bis and Cibus, which give them free meals at certain establishments. (The amount on the cards is considered taxable income, since, after all, there is no such thing as a free lunch.) There are also workplaces which provide catered lunches for their staff. Some even stock the fridge with breakfast foods and snacks, so employees never have to leave the building during the workday.

Family First

Israeli employers are generally respectful of family obligations and events, such as bar mitzvahs, britot, weddings and funerals, and will understand when an employee takes off time to attend them. When there is a death in an employee’s family, this will be announced to all the workers and some of them will make the effort to attend the funeral and/or shiva. An employee sitting shiva is legally entitled to all those days off.

Judaism in the Workplace

Depending on the location and the people who work at the company, the environment might be more or less religious. But even the most secular workplaces are likely to hold holiday parties before major Jewish holidays. Most companies will make arrangements for kosher food at parties and other events if they know that this is important to some of their employees. Even if you are the only kosher-eating person in your office, there’s no need to be shy about asking for consideration of kashrut restrictions. Legally, Jewish holidays on which work is prohibited by Jewish law are considered paid vacation days.

Work Methods

Olim are sometimes surprised to find out that the customer isn’t always right in Israel. This is true as a consumer but also as an employee. You may find that your bosses are working under the impression that they know what’s best, even if customer feedback seems to be saying something different.

Organized methods and deadlines are not always a feature of the Israeli workplace. On the other hand, both management and employees tend to be extremely dedicated to getting the job done, even if it requires working crazy hours or pulling people off other projects to complete a goal.

Communication

We already mentioned the lack of formality in speech and this includes using casual army slang and references, swear words and divulging TMI (too much information). Israelis talk fast and interrupt each other and this is not considered rude. They do small talk and Jewish geography, but just as often will cut out the small talk to get to the main point as quickly as possible. Who you know is more important than what you know, so it’s important to establish connections, even if it’s as remote as your niece’s neighbor serving in the army with your colleague’s daughter. And don’t be surprised if your coworker offers to set you up with his best friend’s son.

You may find that your office relies less on email and more on WhatsApp and direct communication. A lot of offices prefer task management apps in order to cut down on email but important information may still be relayed informally. This preference for direct communication leads to meetings which may seem unnecessary to you, but which are considered vital by management. 

Adjusting Your Expectations

It will be much easier to get used to the differences in company culture if you come with an open mind and a readiness to learn. Let go of the ideas you brought from your home country and pay attention to how your colleagues behave. Before long, you will find yourself acting like an Israeli and wondering how you ever did business any other way!

Categories
Business in Israel Podcasts

Podcast: The Golden Rules of Networking

Helena Baker of English Speaking Networking shares the do’s, the don’ts and the OMGs of networking, as well as the trials and tribulations of a new olah restarting her career in Israel. 

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Business in Israel

Business Culture in Israel

If you’ve owned a business in another country or seen firsthand how a foreign business is managed, you may be surprised at some of the business practices which are common in Israel.

Payment Terms

One of the most surprising (and challenging) aspects of doing business in Israel is the concept of shotef plus – delayed payment. Many organizations and businesses don’t pay immediately upon receipt of an invoice. In 2017, a law was passed in the Knesset requiring most institutions and businesses to pay up to 45 days from receipt of an invoice. If you expect payment sooner, this should be included in your service agreement/contract, but don’t be surprised if you are told that the institution simply can’t pay earlier. These payment terms are usually based on cash flow issues (i.e. they are also being paid late), so you may have to accept these terms if you want to work with certain clients.

Acceptable forms of payment are cash, bank transfer and checks. Checks have become less popular in recent years and they aren’t worth the hassle if you can avoid them. Your clients may want to pay with Paypal, Paybox or Bit. Check fees and ease of use to decide which of these you choose to accept. You can also sign up for a paid credit card processing app and accept payments through it. Keep in mind that the easier you make it for clients to pay you, the sooner you will receive the money.

Becoming a Supplier

If you supply services or goods to another business, they might ask you for your Nikui Mas BaMakor and Ishur Nihul Sefarim. The Ishur Nihul Sefarim states that you keep your books according to the regulations of the Israeli Tax Authority. Nikui Mas BaMakor instructs the paying entity whether they are required to withhold tax and at what percentage. These documents can be obtained from your accountant or via the Israeli Tax Authority website.

Communication

In keeping with the informality prevalent in Israeli culture, business culture can be pretty informal too. Clients often prefer to communicate via WhatsApp or Facebook Messenger and some eschew use of email entirely. If you find that this way of communicating wreaks havoc on your business processes and organization, consider signing up for a task management system. There are lots of free options out there, and you can keep everything organized in one place, regardless of the form of communication utilized by your clients.

Price Haggling

Haggling over price is a time-honored Middle Eastern tradition and Israelis are well-versed in the art. You can choose not to work with clients who bargain or you can quote a higher price and expect to lower it in negotiations. In either case, you don’t want to lower your price below what your work is worth or to an amount that doesn’t leave you enough profit after taxes and expenses. A strategy that reduces the chance that a client will haggle is to let them know what they are getting for this price so that suddenly the amount seems low. 

Meetings

Meetings at coffee shops are totally acceptable in Israeli business culture. It’s understood that you may work from home or have an office space that’s not set up for hosting and your client or colleague may be in a similar situation. Etiquette requires that if you are the one who has asked for the meeting, you pay for the drinks or meals. Location should be closer to the person who was invited to the meeting and the initiator should check about dietary restrictions, including kashrut, before choosing a cafe or restaurant.

Invoices

Most clients will ask you for an invoice before they send payment for a service. An official invoice is called cheshbonit mas, and it obligates the business owner to pay VAT once issued.  Therefore, many business owners will send a “drishat tashlum” or “cheshbon iska” which is not an official document, in order to avoid getting stuck with a VAT expense before receiving payment. However, your client may fear making a payment and then getting stuck tracking the official cheshbonit mas. They are allowed by law to request the official, numbered cheshbonit mas before issuing payment and you must provide it.   

Some clients are prompt in their payments but others may need a little nudging. Sometimes clients will even ask to pay in installments or reduce the payment that was already agreed on. Stand firm when necessary and choose clients wisely to avoid these issues as much as possible.

Receipts

Once payment is made, if you are an Osek Patur, a receipt (kabala) is issued. If you are an Osek Murshe, you will need to issue a cheshbonit mas, which is a legal document and must be numbered. The ORIGINAL is what has value, so when using officially printed books the original document must be given to the payee. A digital copy is not enough for the payee to claim the VAT back on the expense.

In many cases, especially when funds are exchanged at the time services are provided, these documents are issued together in what’s called a cheshbonit mas kabala.

If you are using an electronic invoicing system, it’s easiest to create the payment request in the system and transform it into a receipt once payment has arrived.

Receipts are legal documents and it’s important to use a government-approved electronic system or an official printed booklet. Clients generally prefer to receive receipts electronically, so if you use a printed book, take a picture or scan it to send immediately and then send the paper one in the mail afterwards.

Professionalism and Extenuating Circumstances

In some countries, the lines between work and life are sharply defined, but they are a bit blurrier in Israel. Business owners may tell you why they can’t provide a service as quickly as they usually do – for example, they are taking a vacation, their baby is sick or they are dealing with a family crisis. It is assumed that you will be understanding, and that, if your project isn’t urgent, you will wait a little longer. If you feel comfortable, you can also let clients know how life events affect your productivity. Constant excuses won’t go over well, but an occasional hiccup is understood and accepted.

Categories
Employment in Israel

Working Two Jobs in Israel: Everything You Need to Know

One of the things you learn quickly in Israel is flexibility. Plans tend to change at the last minute, rules aren’t necessarily law and the food tastes nothing like it did in your home country. At the beginning of life here, these things can be frustrating, but soon you will start to see the benefits of agility and adjustment. 

One of the ways in which Israelis are flexible is in the definition of their careers. There are many Israelis who have one conventional career and stick to it, of course. But there are also a lot of Israelis who work more than one job in order to make a living. There’s the office worker who teaches exercise classes in the evening, the teacher who tutors on the side and the translator who also runs a marketing business, to name a few.

When you have two (or more) jobs, there are some Israeli laws you need to be aware of.

Coordination of Income Tax

If you are a salaried employee, the Income Tax Authority (Mas Hachnasah) provides guidelines to your employer for how much tax to withhold from your salary. Without instruction from Mas Hachnasa, when your employer becomes aware that you are receiving another salary, they are obligated to withhold the maximum amount of taxes.

In order to prevent most of your income going to taxes, you need to coordinate your income tax in a process called Teum Mas. You can apply for a Teum Mas online by providing information about your income sources, although it may be worth your while to stop by your local Mas Hachnasa office and walk it through with an agent. This may take more time, but oftentimes saves headache down the road due to misunderstandings or typos. You will need certain details from your employers, such as their Mispar Tik Nikuim (payroll tax number) and your expected annual income. Register at the Income Tax Authority in order to access the form for Teum Mas. The Teum Mas will arrive within a week or two of applying and you should then send this report to your payroll or HR department so they know the proper amount of taxes to be withheld.

In some cases, you may also need to communicate your dual income to Bituach Leumi. If you didn’t do so and you overpaid, you can request a return.

Unemployment Benefits

Working a second job doesn’t disqualify you from unemployment benefits. If you worked for two employers and one of them laid you off, you can continue to work at the second job and collect unemployment from the first one if you qualify. Your benefits will, of course, be lower than if you were laid off from your only job and were no longer working at all. You’ll need to submit pay stubs from your employer each month.

Entrepreneur with Multiple Clients

If you have multiple clients and don’t receive a salary, you must open a business with independent contractor files at the VAT office, Income Tax Authority and Bituach Leumi. You report your income and pay income tax, Bituach Leumi and VAT (if relevant) according to your total income from all your clients. This involves paperwork and it is recommended that you hire a tax consultant (Yoetz Mas) or accountant to help you with this. 

It is also possible to receive a salary from an Employer of Record such as Route 38. In that case, the clients pay the EOR and you receive a salary based on revenue collected. Payments and taxes are automatically withheld, just like they are for every other salaried employee.

Employee and Entrepreneur

If you’re supplementing a salaried job with a side business, you need to open files with the VAT office, the Income Tax Authority and Bituach Leumi. Your payments to Bituach Leumi will be deducted automatically from your salary and additional payments will be owed from your freelance income, taking into account what you have already paid as a salaried employee. 

As a freelancer, you are required to report your income to the Income Tax Authority. There is no need for a Teum Mas, unless you have more than one salaried position in addition to your freelance earnings. When filing your end of the year report, include your income as a salaried employee so your income tax is calculated correctly. This report should also include funds deducted from both the job and the business for pension or Keren Hishtalmut (education savings fund), as they will reduce your taxable income.

Categories
Employment in Israel

Benefits for Pregnant Women

Israeli employment law protects pregnant women in several ways. In fact, there are some benefits that start even before pregnancy if a woman is undergoing fertility treatments. Full days off for fertility treatment are treated as sick days and individual hours can also be deducted (up to 40 hours a year for a full time employee). A woman cannot be fired or have her salary changed during an absence due to fertility treatments.

A woman is obligated to inform her employer of her pregnancy during her fifth month. Likewise, a woman who is hired at a new job while pregnant doesn’t have to disclose her pregnancy prior to accepting the job, unless she has reached month 5. Some women choose to let their employer know earlier, either because they are feeling sick and may not be performing at optimal level or in order to give their bosses more time to find a maternity leave replacement. The law allowing women to wait till five months protects them against discrimination, so each employee should consider carefully when the best time to disclose a pregnancy is.

Discrimination against pregnant women, in the hiring process or in the workplace, is illegal. A woman who was discriminated against can sue her employer in the labor court. This includes a prohibition of firing a pregnant woman because she is pregnant. If a company wants to fire a pregnant woman for a different reason, and that woman has worked at the company for more than 6 months, the employer must obtain special permission to fire her. A common case would be a company that is laying off many workers due to budget cuts and wants to include a pregnant woman in the general layoff. If a pregnant woman was fired without special permission, it is considered as if she was never fired.

Employers are also prohibited from lowering the salary or work scope of a pregnant woman, regardless of how long she has worked at the company. 

It is prohibited to require a pregnant woman to work overtime or night shifts. However, she can work overtime if she has consented in writing and provided a letter from her OB/GYN that there is no need to refrain from overtime. A woman can be asked to work at night (at least two hours between 10 PM and 6 AM) but she is within her rights to refuse in writing. 

If a woman has a documented high-risk pregnancy and is absent from work for 30 days or more, she is entitled to a Bed Rest Benefit from Bituach Leumi.

A pregnant woman can be absent from work for routine pregnancy tests for up to 40 hours (for a full time employee). These hours are paid for by the employer as if she worked.  A part time employee is entitled to this benefit as well, relative to the number of hours she works on a regular basis.

The spouse of a pregnant woman is entitled to use 7 days of their sick days due to her pregnancy or childbirth. This includes accompanying her to appointments and being present for childbirth. He can also utilize 3 vacation days after the birth of the child. If he wishes to take 4 or 5 days, those extra two days can be considered sick days. These days are not considered maternity leave and don’t negate the spouse’s right to split maternity leave with his wife.

For more information on the rights of pregnant women in the workplace, see the Kol Zchut website.

Categories
Business in Israel Podcasts

Podcast: In Good Company

Shuey Fogel of Fogel CFO & Management Services gives some of the best advice you will ever get about aliyah, opening a business in Israel and pivoting your career. You’ll also hear how a bloody nose in a basketball game can change your life and how a book signing can make a lasting impression.

Categories
Podcasts

Podcast: Is It Hard to Make a Living in Israel?

CFO Baruch Swinkin talks to financial consultant Rifka Lebowitz, about the opportunities and challenges of aliyah. Rifka reveals some of the results from her recent survey and Baruch tells us what happened when he accidentally told someone he was a taxi driver.

Categories
Rosh Hashanah

The Joy of Repentance

In his incredible commentary on Rav Kook’s Orot HaTeshuvah, “Song of Teshuvah,” Rav Moshe Weinberger brings to light Rav Avraham Yitzchak HaKohen Kook’s groundbreaking approach to the concept and process of repentance. Rav Weinberger cites over and over again Rav Kook’s message that repentance is not intended to be a burdensome process, rather a joyous, restorative process. As our Sages state, the creation of repentance preceded the creation of the world and represents our soul’s desire and yearning to return to that point, to a place in time where there is an understanding and appreciation for Truth, to a place and time before the veil of the physical world shrouded us and obscured us from that Truth. It’s a healing process and not a punitive process. Kaparah is classically translated as atonement, but it literally means to wipe away. We are literally cleaning our souls and we should approach the repentance process not with trepidation, but with enthusiasm. It is a hard and rigorous process, but it should be embarked upon with a sense of renewal and hope. 

Additionally, a person’s desire to make the world a better place and specifically any activism, advocacy and efforts in the advancement of the Jewish people is a form of repentance. The Jewish people are different from any other nation. We are made up of individuals, but our heart also beats as one. When any part of the nation is suffering, we all suffer. We see examples of this all the time. Therefore, when one takes the lead in improving the lot of the nation, in any way, they are actively engaged in bringing us back to our original pure state, which is the essence of repentance. Every person who leaves his or her home country, makes aliyah to Israel and contributes to the welfare of the Jewish people and its homeland is engaging in a form of repentance.

The beauty is that Hashem created lots of us, each with our own personalities, character, strengths and weaknesses. We see this clearly in the myriad ways that you – our clients – choose to serve the Jewish people and boost the Israeli economy. No matter how you look at yourself, as long as your focus is on doing good, you can take whichever approach fits you best. Or, more practically, blend of approaches. As long as we recognize our True purpose in this world, we can then go about the process of working on ourselves in whichever way speaks to each of us. 

5780 was really challenging. COVID hit us like a brick wall. We had hoped for better in 5781. And in some ways it was. Because we learned to cope with this ever changing pandemic. But we also suffered tremendously as a nation. The losses that we endured this year were obviously meant as messages to us. Without a prophet, there is no way to know what that message is, but it’s clear that we have lots of work to do. If everyone takes upon themselves to make 5782 a year of repentance, step by step, day by day, baby steps each day – a year of positivity, a year of growth, a year of unity – not just 10 days or one month, but an entire year, then hopefully we can stand together on the eve of 5783 with a real call for everyone to return to our home in the land of Israel. 

We wish you a shanah tovah umetukah, a year of blessings and success, a year of health, of endless nachas from our families and only joy, a year in which all our wishes come true. 

The Route 38 Team

Categories
Business in Israel Employment in Israel

Should I freelance, open a business or work as an employee?

One of the great things about living in Israel is that there are endless ways of making a living. Olim are often surprised to discover that their new neighbors are working in many different types of jobs and that they are not necessarily working full-time jobs at established companies. They may be freelancers, small business owners or founders of start-ups. The Israeli economy and social structure promote creativity, flexibility and out-of-the-box thinking about careers.

You don’t always have a choice on how to structure your career path, but there are some circumstances in which you will have to choose whether to be an employee, a freelancer or a business owner:

  • The Israeli company you work for wants to hire you as a freelancer
  • You work for a foreign company with no Israeli office
  • You work for multiple clients in Israel or abroad
  • You are starting your own company

Here are the some of the differences between employees, freelancers and business owners:

EmployeeFreelancer (atzma’i – osek patur or osek murshe)Business owner (b’am)
Taxes and social benefit obligations are deducted automaticallyTaxes and social benefit obligations are paid independentlyTaxes and social benefit obligation payments are set up as automatic deductions by the company accountant 
Minimum sick days and vacation days provided by lawNo sick days or vacation daysYou are your own boss. You make the rules.
Keren hishtalmut savings plan may be includedKeren hishtalmut savings plan can be set up independently Keren hishtalmut savings plan can be set up via the business
US citizens will not owe a 15% Social Security (FICA) tax for filing as an independent contractorUS citizens will be taxed 15% of their income to Social SecurityUS citizens will not owe Social Security
No accountant needed to file an annual return, assuming no other reportable incomeAccountant strongly recommended for the end of the year report. Osek murshe has additional, periodic reporting requirements over the course of the year (best done with an accountant).High accounting fees. Monthly, bi-monthly and annual reporting requirements
No additional administrative or accounting responsibilitiesMinimum level of administrative responsibilities in addition to tax reporting responsibilities indicated aboveSignificant additional administrative responsibilities and required understanding of Israeli corporate income tax requirements in addition to tax reporting responsibilities indicated above
Receives maternity leave and maternity payment (after accrual of minimum required months on payroll)Receives maternity leave and maternity payment (after accrual of minimum required months reported)Receives maternity leave and maternity payment (after accrual of minimum required months on payroll)
Work schedule determined by employerSelf-determined work scheduleSelf-determined work schedule
Payment generally deposited directly into employee’s bank accountPayment collected directly from client(s)Payment collected directly from client(s)

One of the reasons that we founded Route 38 was because being an employee in Israel is legally and financially simpler than being a freelancer or opening up a company. We are the employer of record for people who work for foreign companies or provide services to clients and are not employed by another Israeli company. Our solution allows people to focus on their work without spending time and resources on collection of funds, paperwork and government reporting. In many cases, the employees retain control over their schedule and choose which projects they want to work on, while enjoying the benefits of an Israeli pay stub.

There are career paths which don’t lend themselves to the Route 38 employer of record service. In fact, every case is different, and professional advice is highly recommended before making a choice that has long-term effects. We provide objective and professional advice to help you make the choice that’s best for you. Email us at info@route38.co.il with information about your situation and we will get back to you as soon as possible.

Categories
Employment in Israel

How Do I File for Maternity Leave in Israel?

Mazel tov on your new baby! In between changing diapers and feeding this adorable munchkin, you may be worried about how you receive your maternity leave benefits. The good news is that you probably don’t have to do anything to make that happen, but of course, there are some exceptions.

Eligibility for Maternity Leave

Maternity leave refers to the amount of time your employer is obligated to hold your job for you. If you have worked for a year for the same company, you are entitled to a maternity leave of 26 weeks, only some of which is paid. If you have worked for your current company for less than 12 months, you are entitled to 15 weeks of maternity leave, all or some of which is paid. Your employer cannot prevent you from taking maternity leave or begin the termination process for a period of 60 days after your return. 

If you were employed by the same employer for a year before becoming pregnant, you will have pensions contributed on your behalf for the first 5 weeks of maternity leave. You must also deposit 6% during this time (usually laid out by the employer and deducted from your pay upon your return to work).

If you’re self-employed, you don’t need anyone to hold your job, so this is not relevant to you, but you do receive maternity pay from Bituach Leumi.

Maternity Pay

A woman who worked 10 out of 14 months or 15 out of 22 months prior to her birth is eligible for 15 weeks paid maternity leave from Bituach Leumi. A woman who worked 6 out of 14 months prior to her birth is eligible for 8 weeks paid leave.

According to the Kol Zchut website, “The maternity allowance is computed per day according to the gross salary of the employee in the three months preceding the first of the month in which the leave began, divided by 90, or according to the total income in the six months which preceded that day, divided by 180 (whichever is higher, up to the maximum established amount).”

If you’re self-employed, payment is based on the three months preceding your maternity leave or the same three months in the previous year, whichever is higher. If you’re both a salaried worker and self-employed, maternity pay will be based on both incomes.

How to File for Maternity Pay

If you’re a salaried worker and your employer has an arrangement with Bituach Leumi, you will automatically receive your maternity pay in a one time payment during your maternity leave. If you are self-employed, you will get a payment based on your advance payments to Bituach Leumi and adjustments will be made later if necessary. If you were receiving bed rest benefits or unemployment, you will also receive your maternity pay automatically.

If you don’t fall into any of these categories or you gave birth at home and not in the hospital, you will need to file a claim with Bituach Leumi. This can be done up to 9 weeks before the due date by mail, fax or at a local branch, or after birth online. These are some of the documents you may need:

  • Confirmation of birth from the hospital (if you gave birth abroad)
  • Newborn registration at Ministry of Interior (if baby was not born in a hospital)
  • Permit from the Ministry of Health or Ministry of Economy (if you received vocational training from the government)
  • Reserves book and certificate of discharge (if you are a newly released soldier)
  • Proof of National Service (if you have just completed it)
  • Bank account information (if you are a foreign worker or foreign passport holder)
  • A completed Form 355 from Bituach Leumi. Sections 8, 9 and 10 of this form must be completed and signed by your employer.

In most cases, maternity pay arrives automatically in a new mother’s bank account. If you fall into one of the categories that require filing, the process is fairly transparent and shouldn’t be too difficult. You’ll have plenty of time to focus on yourself and your new baby.

Categories
Bringing Your Existing Job to Israel Podcasts

Podcast: You’ve Heard of Route 38. But What Is It?

Baruch Swinkin, CFO of Route 38, talks aliyah, succeeding financially and mountain biking as he explains what Route 38 is all about.

Categories
Employment in Israel

How Do Pensions in Israel Work?

Financial advisors will tell you that pensions are just as important as salaries, and for good reason. Although it seems counter-intuitive, retirement expenses are just as high if not higher than what you are spending now. This is because of new expenses such as medicine and medical treatments and increased spending on things like transportation and food. Taxis often replace driving, busing or walking and the ability to get to discount stores may be curtailed. Some retirees are still marrying off children or helping out their young adult kids. And basics like phones, electricity and home maintenance don’t change.

That’s why smart financial planning includes planning for retirement and luckily, the Israeli government has regulated this so that every citizen has some form of pension.

Bituach Leumi

All citizens who have contributed to Bituach Leumi for 12 years are eligible for a state pension. Israeli residents start paying into Bituach Leumi at the age of 18 (unless they are in the army or National Service). If you are working, this payment is deducted automatically from your paycheck. If you are a business owner, the government collects this payment from you directly. The basic pension starts at 1,558 NIS a month per person and 2,430 NIS for a couple, so while this is a nice amount to have, it’s not going to go very far in covering your living expenses. Furthermore, the amounts paid out by Bituach Leumi might be reduced due to actuarial issues.

Private Pensions

Your employer is obligated to set aside at least 6.5% of your salary or the average wage in the economy (whichever is lower) every month for pension insurance. You also pay into the insurance, at the rate of 6% of your salary. 

Your employer is also obligated to set aside severance pay to the amount of 6%, or 8.33% if you have signed a Chapter 14 clause. A Chapter 14 clause states that the employee is entitled to receive exactly what is in the fund (no more and no less) at the time of termination, regardless of whether the parting of ways was initiated by the employee or the employer. If you don’t use your severance pay, it becomes part of the pension paid out to you in retirement.

Just like Bituach Leumi, employees have their pension deducted automatically from their paychecks, while business owners have to set this up on their own.

Multiple Pensions

Many companies choose a pension provider for their employees and this may result in one person having several pension plans. In recent years, the government has mandated that an employee can choose which plan he wants to contribute to, regardless of the company’s official provider. So if you get a new job but already have an existing plan, you can continue to contribute to it and don’t have to open a new one.

If you do have multiple pensions, check whether you are paying fees on each one. If that’s the case, you may be better off consolidating them into one, although there are cases where it makes sense to keep them separate. If you merge the plans, make sure that your pension is now being paid into the consolidated plan.

Catching Mistakes

It’s important to check that your pension is actually being deducted, because if a mistake is made you may find yourself suddenly losing most of your salary to a retroactive pension payment. 

In general, we recommend looking at your payment stub (tlush maskoret) carefully each month, to check that everything is in order. Payroll mistakes can happen and if you’re only looking at the final number at the bottom, you may miss them.

How to Choose a Pension Plan

There are many pension providers and it can be extremely confusing to understand the differences between them. Revenues, management fees,  level of investment aggression, annuity vs. lump sum payments, various insurances connected with the policies and more differences need to be taken into account when choosing a plan. To complicate matters further, insurance agents are often representatives of one specific company, so they aren’t giving you objective advice. 

If you’re starting fresh or want to switch pension companies, it is advisable to consult with an independent insurance agent who can explain what your options are and recommend a plan that meets your needs.

Thank you to Motty Handler, registered insurance agent, hmotty@gmail.com, for his help in writing this article.

Categories
Resources for Employers Outside of Israel

Pros and Cons of Outsourcing to Israel

As telecommuting has become more prevalent around the world, more American companies have begun to hire people in Israel to join their staff. There are four main reasons why companies choose to do this.

Tapping into Israeli talent

Israel is called the Start Up Nation because of the ingenuity and talent of its best and brightest. Many Israelis have learned specialized skills during their army service and have been taught to think out of the box and dream big. Companies looking for exceptional talent will often find it in Israel. This is especially true in the hi-tech industry but by no means limited to it.

Savings on salary

Israeli salaries tend to be slightly lower than American ones, so it can sometimes be less expensive to hire someone in Israel to do the same job. Of course, salary is very much dependent on industry and experience, and not every Israeli will work for a lower salary than his or her American counterpart.

Night workers

Certain industries, such as medicine and customer support, require staff to work overnight. Israel is 7 hours ahead of the US, so an Israeli employee can provide services during his daylight hours while his American colleagues get a good night’s sleep.

For instance, JTA reported that Dr. Warren Isakow, an intensive care physician, works from 4 AM to 4 PM Israel time for hospitals around the US. Using software developed for this purpose, he directs procedures from his home office in Modiin, Israel, half a world away.

Existing employees

Another reason that American companies employ Israeli workers is that they had an excellent employee who wanted to move to Israel and they didn’t want to lose him or her. Instead of giving up on an outstanding asset, searching for and training someone new, they prefer to switch to a remote work arrangement with their current staff member. This arrangement is often mutually beneficial to both employer and employee and can last for many years.

Outsourcing to Israel has all the advantages listed above but it also comes with challenges. These are some of the issues to consider:

Employer’s obligation to the Israeli government

An American company hiring an Israeli must take into consideration that the Israeli government may call this an Israeli office and tax the company accordingly. Some companies solve this by having the employee set himself up as an independent contractor or business owner in Israel, with the American company billed as a client.

Employee’s obligations to the Israeli government

An arrangement where the employee becomes an independent contractor is beneficial to the American company, but it comes with serious drawbacks for the employee. This is because American citizens residing outside of the US are still obligated to file taxes and will have to pay 15% Social Security as independent contractors. Many dual citizens will balk at this arrangement and prefer to work for an Israeli employer in order to avoid these payments. 

A less expensive and more efficient solution to this problem is to hire Route 38 to provide services to the American company. A dual citizen wishing to work for this company becomes an employee of Route 38, which pays his salary and deducts all the taxes and payments required by the Israeli government. This is a win-win, because the employee doesn’t owe Social Security to the US government and has a smoother transition into Israeli life, while the American company doesn’t have to open an entity in Israel, with all its implications.

Communication challenges

Remote work is a different animal than office work. Particularly at the beginning, it may be difficult to communicate effectively in order to get things done efficiently and well. This problem is exacerbated by the time difference. Luckily, technology has advanced enough that task management software, virtual meeting platforms and social media make it easier to stay in touch. The 7-10 hour time difference does allow for some overlap between American and Israeli work hours, and Israelis are often flexible with their schedules in order to accommodate their overseas colleagues.

Is outsourcing to Israel a good idea? If the last few years have taught us anything, it’s that agility and flexibility are key to a successful business. If a company can tap into new talent pools, save money, cover nighttime hours or keep a good employee, outsourcing to Israel is certainly an excellent option.

Categories
Bringing Your Existing Job to Israel

Pros and Cons of Working Remotely in Israel

The 9-5 office of the past has gradually transformed into a much more fluid work environment, in which remote working has a place of honor. There are, of course, jobs that can’t be done remotely, and employers who don’t allow it even though it could technically work, so remote working in Israel isn’t an option for everyone.

But if you’re thinking about aliyah or are considering a career change in Israel, remote work might be on your radar. Let’s start with the ways it can be awesome:

  1. If you already have a job outside Israel and you’re pretty happy with it, remote work can be a great solution that allows you to move to Israel and continue working for your American company. If set up correctly, your employer doesn’t have to create an entity in Israel in order to employ you. You can keep doing what you know how to do at a company that appreciates you while enjoying life in Israel.

  2. Work/life balance is often off-kilter in a traditional office job, with much more time and energy spent on work than on life. But when you work remotely, you tend to have more flexibility with your schedule and find it easier to establish boundaries where you need them. Even if you’re working set American hours, you will find that having the mornings off for children, errands, chores or a leisurely breakfast out with friends can make a huge difference in your happiness.
  1. American companies tend to pay higher salaries and consulting fees than their Israeli counterparts. Working remotely in Israel means that you can enjoy better pay for the same type of work you’re already doing or want to do. You can also work for more than one client and for companies around the world and take home more money at the end of the month. Of course, a higher gross salary outside of Israel may end up not being so lucrative once exchange rates, bituach leumi and taxes are taken into account, so you need to investigate this on a case-by-case basis.

  2. Depending on your level of fluency in Hebrew and familiarity with Israeli culture, you may find it easier to work remotely in your home country.

Not everything is rosy in the world of remote working, of course. Here are some things to consider that make working remotely a little less attractive:

  1. Israeli companies deduct taxes automatically from their employee’s salaries, so there’s usually no filing necessary. If you’re working remotely, you are officially considered a freelancer in Israel and that means that you need to file taxes and pay them separately. Some remote workers in Israel prefer to be employed by an Israeli payroll company which deducts taxes for them in order to avoid this pitfall.

  2. Israeli employers are required by law to provide certain social benefits such as sick days and a minimum number of vacation days. Many companies also add extra benefits, like a tax-free savings fund (Keren Hishtalmut) or a leased company car. Freelance remote workers are generally not eligible for these benefits and must fend for themselves.

  3. When you’re not working in an office, you don’t get to chat with colleagues while making coffee in the morning or start a brainstorming session by walking past someone’s desk. You may find it harder to get quick answers to small questions (although WhatsApp or a task management system may help with this). And you might get left out of meetings and important updates. Of course, with some extra effort you can be a vital member of any team, even if you’re far away.

  4. If you’re working American hours (which are evening hours here in Israel) you may find the late evenings a challenge, especially if you don’t have the ability to sleep later in the morning. Work will also conflict with social events such as weddings, concerts and dinners out with friends who work during the day.

We’d love to hear from you. If you decided to work remotely, what were the deciding factors? What do you miss about working in an office and what aspects are you glad to be rid of?

Categories
Resources for Employers Outside of Israel

Your Employee Wants to Move to Israel — Now What?

The change in lifestyle and culture that the pandemic has brought to the world has brought much chaos and challenge to the world. But change also creates opportunity. One such opportunity that now exists is for employees to follow their dreams and move to locales never before possible while continuing to work remotely and provide even better service to their employers with a  balanced work/life model that fits their needs and keeps them satisfied and eager to prove themselves. Working remotely from Israel with a 7-10 hour time difference to the States has now become acceptable and brings about a preferred lifestyle for many.

If your employee would like to move to Israel, there are three ways that this can be accomplished.

The first option is that the employee continues to work for their US employers as a W-2. This option would require the employer to open a tax file in Israel – not a highly recommended course of action for any company who does not want to create nexus in a foreign country.

The second and more feasible option is for your employee to open a personal tax file as an independent contractor, requiring the service provider to hire an accountant to open the files with the relevant authorities and file an annual return, along with a small handful of other possible other reporting obligations. It’s pretty straightforward and may not take much time, but it can still be a burden on your employee. The financial downside to this approach for Americans is that, as they are reporting as an independent contractor, they will be required to report as such in the US as well, kicking in a 15% flat Social Security tax, that is not covered by the US-Israeli tax treaty, nor can any deductions be taken. Your employee may very well be reluctant to choose this option, due to the burden of reporting in Israel and paying Social Security in both countries.

The third way to continue to employ an Israeli resident is through our payroll service. Our service allows your employee to continue to work for you, but as an employee of our company, Route 38 Professional Services LTD. The benefits are that we take care of all of their accounting requirements here in Israel, helping them to continue to work seamlessly with you. Additionally, as an employee of our company (even though it is a foreign company) when the individual files their US return, they will no longer be liable for the Social Security tax. 

Our association with your organization will be through our US company, Route 38 LLC. This allows us to have a completely domestic relationship and act as a straight 1099. We invoice on a monthly basis and you can pay us via our BOA account using most electronic means. 

A brief run-down on mandatory Israeli employer costs might give you some reference point on the cost of employing someone in Israel. They are as follows:

 – National insurance  – approximately 7%-9% of gross salary

 – Pension – 6.5% of gross salary

 – Severance – 8.33% of gross salary

There are also a couple of optional benefit options, primarily a study fund benefit in which you could add an additional 7.5% of gross salary for funds to be deposited in an investment vehicle that can be tapped into after 6 years. 

You should also be aware of certain differences in employment law in Israel versus the US – specifically protections for employees for termination (a hearing needs to be proposed and happen and only after that can an up to 30 day notice period start) and maternity (pregnant women can almost never be terminated, job must be available upon return from leave and employer cannot start the termination process with the employee for at least 60 days upon return.) 

If there is any other information that we can provide, feel free to reach out to us at Route 38: info@route38.co.il. We look forward to hearing from you.

Categories
Bringing Your Existing Job to Israel

Putting the Pieces Together

I have a somewhat quiet passion for puzzles. My family just finished a 3,000 piece puzzle. It took around four months and lots of time spent trying to jab pieces into places that just didn’t fit. Some pieces you just know are supposed to go in certain spots and you try dozens of times to make them fit…to no avail. It’s only when the puzzle is complete that you can look back and find those “trouble” pieces and see that they actually belonged somewhere completely different. Sometimes, you can struggle to find one piece for days, and then someone else comes in and in twenty seconds, they say, “Were you looking for this?” With a look mixed with incredulousness and self-doubt you sheepishly respond “Uh, yeah…”

Life is obviously one huge ever growing puzzle that we are constantly trying to get ahead of and complete. There are some challenges that interlock neatly and we are able to move on from quickly and effectively and there are some challenges that we keep on trying to solve the same way over and over and over, until finally, we figure out that our approach was completely wrong. 

Making a living is a challenge that is constantly evolving and requires constant energy and focus. We are given many hundreds of “pieces” – resources and assets – in order to complete the puzzle. They are all multi-colored and many do not seem to fit anywhere and are left unused for long periods of time. We sometimes try to use the same resource, the same mindset over and over again and can’t figure out why it doesn’t “fit.” Oftentimes, we need to stand back and look at the picture from afar to see that we were way off in our assessment and we need to recalibrate.  Many times, we need an outside perspective to come in and direct us to where that piece should have gone the whole time. 

The world is rapidly changing and more and more people are starting to think about coming home. The aliyah process is a ginormous puzzle, with dozens, if not hundreds, of moving parts. One of the biggest sections of that puzzle is making a living in Israel. At Route 38, we can help you recalibrate your focus. Maybe the piece that you have been searching for is right under your nose. 

Could I really, possibly keep my job and just continue to work remotely (now that the pandemic has proven that it’s possible)? What are the ramifications for my employer and for me? How do I report and pay my taxes in either country? How do I approach my employer? What tools do I need to make this happen? If I absolutely cannot bring my job with me, what is the business landscape like in Israel? How do I operate a business? If I am looking for a new job, what do I need to know? What is accepted and how do I know that I am not being taken advantage of? 

There are so many questions. Route 38 has the answers. Our team of experienced American-Israeli professionals can help guide you through these concerns and map out a plan. Our vast network of service providers in dozens of industries can answer your industry-specific questions. We will give you the tools to take a step back and make guided informed decisions in order to complete the backbone of your aliyah parnassah puzzle. Contact us today to schedule an appointment.