Category: Aliyah

Working for a UK Company from Israel

Post author By Hadassah Levy
Post date June 13, 2024

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.

Aliyah Employment in Israel

Switching Careers after Aliyah

Post author By Hadassah Levy
Post date June 3, 2024

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.

Aliyah Bringing Your Existing Job to Israel

Answering Your American Employer’s Concerns about Working from Israel

Post author By Hadassah Levy
Post date May 13, 2024

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.

Aliyah

Everything You Need to Know about Careers in Israel

Post author By Hadassah Levy
Post date April 3, 2024

We’re proud to announce the publication of our free e-book, Your Route to Career Success in Israe l. 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!

download now

Aliyah Bringing Your Existing Job to Israel

Keeping Your US Job after Aliyah

Post author By Hadassah Levy
Post date March 10, 2024

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.

Aliyah Employment in Israel

Can I Get an Israeli Job before Making Aliyah?

Post author By Hadassah Levy
Post date February 21, 2024

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.

Aliyah

US Taxes for American Expats in Israel

Post author By Hadassah Levy
Post date February 18, 2024

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:

Your habitual abode -You will be considered a resident of the country where you have the closer personal and economic relationship.
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.

Aliyah Bringing Your Existing Job to Israel Outsourcing to Israel Podcasts

Make Aliyah and Work for a US Company

Post author By Hadassah Levy
Post date March 1, 2023

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.