Route 38 Blog
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.
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.
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
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:
Here are the some of the differences between employees, freelancers and business owners:
| Employee | Freelancer (atzma’i – osek patur or osek murshe) | Business owner (b’am) |
| Taxes and social benefit obligations are deducted automatically | Taxes and social benefit obligations are paid independently | Taxes and social benefit obligation payments are set up as automatic deductions by the company accountant |
| Minimum sick days and vacation days provided by law | No sick days or vacation days | You are your own boss. You make the rules. |
| Keren hishtalmut savings plan may be included | Keren 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 contractor | US citizens will be taxed 15% of their income to Social Security | US citizens will not owe Social Security |
| No accountant needed to file an annual return, assuming no other reportable income | Accountant 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 responsibilities | Minimum level of administrative responsibilities in addition to tax reporting responsibilities indicated above | Significant 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 employer | Self-determined work schedule | Self-determined work schedule |
| Payment generally deposited directly into employee’s bank account | Payment 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.
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.
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.
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.
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:
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.
Baruch Swinkin, CFO of Route 38, talks aliyah, succeeding financially and mountain biking as he explains what Route 38 is all about.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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:
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.
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.
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.
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:
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:
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?
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.
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.
As we all know, everyone falls and makes mistakes. The Talmudic commentator Rabbeinu Yonah points out that it’s one’s reaction to those transgressions that makes the person. If a person’s attitude is of horror and shame and he does teshuvah (he repents) then he has learned from his sin and will actually grow from it. If his reaction is – “this is cool, I’m going to try again,” or “I just can’t deal with this desire or need and I am just giving up on this battle,” well, for that our sages have some pretty tough words.
G-d knows that he created us as fallible human beings. We make mistakes. We have our ups and downs. We are going to trip and do things that we are not proud of. That’s not good, but it’s acceptable, as long as we learn from those mistakes and grow from them. Hashem wants our hearts. He wants us to be focused on the true purpose of our existence, the true essence of our being, which is to serve him, build positive loving relationships in this world and create and build lasting sustainable good. That is what He desires from us. Those are all part of a long journey, replete with hiccups along the way. If we stumble and get back up, we are viewed with the same loving kindness. If we fall and sink, Hashem still gives us an opportunity to get back on track, but we are now going to have to work much harder to get ourselves there.
Elul and Tishrei are usually times to look back at the year and focus on many of the things that we would like to change. 5780 was really, really challenging (understatement of the year). Many lost loved ones after long and protracted battles. Many went through their own health battles, whether COVID-19 related or not. Many lost their livelihoods or faced extreme uncertainty as to how they were going to move forward. Many had ambitious projects and plans that were collateral casualties of the pandemic. Anxiety and depression were probably more common than not. And no one has any idea what tomorrow or next month or 5781 will bring. We’ve all made some mistakes and said things that we really would like to take back. Many of those were born out of maddening frustration and dread.
But introspection also requires us to look back and appreciate all of the good that happened in 5780. We had the opportunity to really focus on our families. We remembered both the importance of our community, but also that we are individuals who can manage on our own. Many that were not able to be with their children received constant reminders of their families’ love. Zoom made us want to throw away our computers, but also brought family reunions with long lost cousins that we had not connected with in years. We had opportunities over the year to do things we never thought possible. Many began to realize that the borders of Israel were closed and began the journey of planning or at least considering Aliyah so that they could be inside instead of out. Countless acts of tzedakah and chesed that never would have come to the fore were enabled by the challenges that we faced. Many difficult interpersonal relationships were mended. And on and on.
See, we can focus on the daily drama and challenge and reflect on 5780 as a nightmare. Or we can choose to focus on what went right. We can focus on our overall outlook.
We generally focus during this time of year on all of our faults. We do still need to work on those. But maybe it would be healthy this year to focus on all of the good that we have accomplished. Not to be haughty. But to present to Hashem – See? I’m growing. I’m learning. I’m striving. I’m doing my very best to fight through the hurdles that You have presented me so that I can be the best spouse, parent, sibling, friend, neighbor, community member, Jew that I can be. Here are my credentials. Please allow me to continue on this path, only maybe lighten up the hurdles in 5781. Please. I might stumble again, but I will not waiver in my commitment to You. Because ultimately, this is what Hashem wants from us.
We wish you a sweet new year, full of blessings, success, health and joy from your family. May this be the year that the entire Jewish people find their home and livelihood in Israel.
Whether you have lived in Israel for a number of years, are considering aliyah or are packing up to make the big move, one of your biggest concerns is surely how to make a good living in Israel. Stanley Fisher, former President of the Bank of Israel, famously remarked that he couldn’t understand his own salary slips. Salaries in Israel are made up of a number of components and understanding them is key to analyzing your financial situation.
Let’s clarify some of the basic terms that are used to describe the required and optional tax and social benefit obligations in Israel.
Ø Bruto – Gross salary. Generally the base salary that is offered to you in a contract.
Ø Neto – The amount of money actually deposited in your bank account on a monthly basis, after deductions of income tax and other required payments are removed. Note that the Israeli standard is to be paid monthly, not bi-weekly or bi-monthly.
Ø Mas Hachnasa – Income tax. Incurred at a graduated rate. Income tax is removed automatically from your salary, and in most cases, there is no need to file taxes at the end of the year. Income taxes are calculated on an annual basis, yet paid out on a monthly scale. We will dissect this area in a later post.
Ø Bituach Leumi – National Insurance coverage. Often compared to US Social Security benefits, but they are actually very different. (I’ll compare these two institutions in a future article.)
Ø Keren Pentzia – Pension fund deposit. This is a mandatory benefit requiring the employer to pay a minimum of 6.5% of the monthly bruto total and the employee to deposit a minimum of 6% of bruto. Each employee has the ability to choose the investment option they prefer. This will also be the subject of a later post.
Ø Kupat Gemel – Mutual fund investment. Similar to a pension fund in structure and purpose, but not mandatory.
Ø Bituach Menahalim – Pension for managerial positions and above.
Ø Keren Hishtalmut – Translated as a “Study Fund.” The initial purpose was for an employee to accumulate a base in order to apply for continuing education. In reality, it now acts as an additional, optional short term tax free savings vehicle. Some employers offer this as an added benefit, but it is not available across the board.
Ø Ovdan kosher avodah – Additional, optional long term disability insurance. This perk is generally only offered in the hi-tech sphere.
When you are offered a job in Israel, you will be told what the bruto salary is and what additional benefits (if any) are provided. An employer will not be able to tell you what your neto take home pay will be, since this is based on many factors outside his control. You can get an idea of what your neto salary will be by using this calculator.
Got any more questions about how your neto salary is determined? Comment below and I will respond.