Employee

The employer is required to report on all his/her employees and on their wages and to pay national insurance and health insurance contributions for them.

The employer must deduct the employee’s share of the national insurance and health insurance contributions from his/her wage, at the following rates :

From the share of the income that is up to 60% of the average wage, % 0.40 (as of 01.01.2006) national insurance and % 3.10 (as of 01.01.1995) health insurance contributions are to be deducted.

From the share of the income that is above 60% of the average wage and up to the maximum income liable for the payment of insurance contributions, % 7.00 (as of 01.01.2006) national insurance and  % 5.00 (as of 01.01.2006) health insurance contributions are to be deducted.

If an employer did not pay insurance contributions for his/her employee on time, he/she is penalized with imprisonment for one year or a fine, and for a corporation double the said fine. Furthermore, if the employee was involved in an event for which he/she is entitled to benefits from the Institute, the Institute is entitled to claim the sum of the benefit that the employee is entitled to from the employer.

The maximum income on which contributions are paid. No payments are made on income above this amount. The amount is five times the average wage, as published in December 2005, and updated each January by the change in the consumer price index.

must pay national insurance contributions for these workers (except for household workers) through the Payment Department of the Employment Service (to the maternity, bankruptcy and work injury branches).

must report on them to the National Insurance Institute and pay national insurance contributions for them.

whose employment contract was signed in Israel is insured under the National Insurance Law as if he was employed in Israel, and his/her employer must report on him/her and pay insurance contributions for him/her under the laws applicable to employees employed in Israel.

pays insurance contributions for this income if it is equal to or higher than his/her income as an employee.

An employee on a non-paid vacation from work who does not work at another job during this period must pay his/her insurance contributions for himself.
The insurance contributions for the first two months are paid by the employer. The employer is entitled to deduct the sum of these insurance contributions he/she paid from any sum that he/she owes the employee.
The insurance contributions paid by an employee on a non-paid vacation from the third month onward are also minimal NIS 141 (as of 01.01.2008) , on the condition that the employee has no income during this period.

The secondary employer deducts the insurance contributions at the full rate from the employee’s full wage, unless the employee provides him with an authorization from the National Insurance Institute specifying a different rate (“coordination of insurance contributions”). Such an employee is required to submit a report on his/her income to the National Insurance Institute.

Permission for a deduction at a different rate will be given when the employee’s wage from the primary employer is less than 60% the average wage NIS 4,598 (as of 01.01.2008) .

If according to the report, it is found that the surplus amount of insurance contributions was deducted from the employee's wage, the difference will be refunded, including indexing differences. If it is found that the sum of insurance contributions deducted from the employee's wage is lower than the amount he/she is required to pay, the Institute will debit the worker for payment of the difference.