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Contributions
Compulsory national and health insurance
Every Israeli resident aged 18 and over is required by law to be insured with the National Insurance Institute and pay national insurance
contributions, except for housewives (a married woman neither employed nor self-employed with an insured partner), and those who first became
an Israeli resident after age of 62.
Every Israeli resident aged 18 and over must also be covered by health insurance and pay health insurance contributions to the National Insurance Institute, along with the national insurance
contributions. A housewife is exempt from payment of health insurance, except for a housewife who receives an old-age pension or whose spouse receives a supplement to his old-age pension.
Every insured person must be registered in one of the health funds and is entitled to the health
services specified by law.
Definitions in this section:
National insurance contributions − payment
for national insurance contributions.
Health insurance contributions − payment
for health services.
Insurance contributions − includes both national
insurance and health insurance contributions.
Average Wage – NIS 9,089 a month, as of
January 2014.
Maximum income for payment of insurance contributions – NIS 43,240, as of January 2014.
National and health insurance contributions are calculated according to the insured׳s income from employment and from other sources, and according to the status determined for him (salaried
employee, self-employed, unemployed, student,
etc.). The payments may not be less than the
minimum specified by law and may not exceed the maximum specified by law.
A person who is not working and has no income pays the minimum insurance contribution of NIS 166 per month.
Insured persons are required to pay insurance contributions even when they are temporarily outside Israel.
Exempt from national and health insurance contributions:
• New immigrants who are not working for 12 months from the day of immigration to Israel.
• Anyone enlisting in compulsory military service or National Service before the age of 21.
• High-school students (up to 12th grade). The exemption is until the age of 19, so long as they
are students.
• Prisoners or detainees who have been incarcerated or detained for over 12 months.
Soldiers in compulsory service receive healthcare
services from the IDF and are not insured under
the National Health Insurance Law, so they are not required to pay health insurance contributions.
Career service soldiers are required to pay health insurance contributions.
Students in officer candidate academic programs
(״atudai״) are required to pay national and health insurance contributions during their studies. The National Insurance Institute will send an account book for payment, and they will have to pay insurance contributions every quarterly.
Students at a yeshivat hesder – The Ministry of Defense pays their national and health insurance contributions from date of conscription and until the date of discharge, including for periods in which he is studying at the yeshiva.
Registering with a health fund and transferring from one health fund to another
Registration with an health fund, or transferring from one health fund to another, can be done through the National Insurance Institute website, at no charge. It can also be done at one of the Israeli
Post Office branches, on a special form (for a fee).
For questions and enquiries regarding registration
and transferal issues:
Contact the National Insurance Institute from Sunday through Thursday, between 9 am and 1 pm, site of the Health Registry, 13 Weizmann
St., Jerusalem, Tel 02-6462000, Fax 02-6462029.
What is the difference between a salaried employee and a self-employed worker?
• Salaried employee − His employer is required
to report on his salary and to pay national and health insurance contributions for him.
• Self-employed worker − must register with
the National Insurance Institute and pay the insurance contributions himself.
• Salaried employee − is also covered by
Unemployment Insurance and Employees׳
Rights following Bankruptcy and Corporate Dissolution Insurance.
• Self-employed worker − is not covered by
Unemployment Insurance and Employees’ Rights following Bankruptcy and Corporate Dissolution Insurance.
• Salaried employee − His rights are not adversely
affected by arrears in payment of the insurance contributions that his employer is obligated to pay.
• Self-employed worker – His rights may be adversely affected if he does not register or is in arrears in payment of the insurance contributions. A self-employed person
A self-employed person is defined as one of the
following:
• A person who engages in his occupation for at least 20 hours a week on average;
• A person whose average monthly income from his occupation is more than 60% of the average
wage (NIS 5,453 as of January 2014);
• A person who engages in his occupation for at least 12 hours a week on average, and whose
average income is more than 15% of the average wage (NIS 1,363 as of January 2014). Self-employed persons must register with the
National Insurance Institute immediately upon
beginning business activities. Injured self-employed persons are eligible for work injured benefits, only
if at the time of injury they were registered at the
National Insurance Institute as self-employed and
had paid insurance contributions.
A married woman who is self-employed in her husband׳s business is required to register with the National Insurance Institute and to pay insurance contributions.
A married couple working in a joint business
can distribute income from the business among them, and pay the insurance contributions each according to their share, provided the distribution
between them is between one-third and two-thirds
of the total income for each side, or half for each from the total income.
A self-employed person who also has income as a salaried employee must pay insurance
contributions from both sources, up to the maximum
income that is subject to insurance contributions.
Self-employed persons with additional non- employment income are required to pay insurance
contributions on the non-employment income as well, up to the maximum Income liable for insurance contributions, and after an amount equal to 25%
of the average wage has been subtracted from
the non-employment income.
A person who does not meet the definition of self-employed as specified above is not
considered self-employed and is subject to the regulations specified below (see ״A person who is
not a salaried employee and is not self-employed״).
Following are the insurance contributions paid by self-employed persons (as of January 2014): Self-employed person who is over the age of 18
and under the age of retirement pays:
• On the part of the income that is up to 60% of the
average wage (NIS 5,453 as of January 2014) − 6.72% for national insurance contributions
and 3.1% for health insurance contributions.
• On the part of the income that is over 60% of
the average wage (NIS 5,453) and up to the maximum income that is subject to insurance
contributions: 11.23% for the national insurance
contributions and 5% for health insurance
contributions.
Self-employed persons who have reached the age of retirement and receive an old-age pension pay for the portion of income under 60%
of the average wage (NIS 5,453), 0.39% national
insurance contributions; and for the portion of income over 60% of the average wage and up to
the maximum income which is liable for insurance
contributions, pay 0.68% national insurance contributions.
Health insurance contributions are deducted from
the old-age pension.
An insured person who is neither an employee nor self-employed
Insured persons who are neither employed nor
self-employed must register on their own with the
National Insurance Institute and pay the national and health insurance contributions themselves, according to their income. If they have no income, they pay minimal insurance contributions at a rate
of NIS 166 a month (as of January 2014). Students in institutions of higher education and yeshiva students who do not work pay the minimum rate of national and health insurance contributions (NIS 124 a month) every quarter, in
January, April, July and October, using an account-
book that is sent to them once a year.
Following are the insurance contributions paid by persons who are neither employed nor self- employed and have non-employment income (as of January 2014):
For the portion of income under 60% of the average wage (NIS 5,453) pays 4.61% national insurance contributions and 5% health insurance contributions,
and for the portion of income over 60% and up to
the maximum income which is liable for insurance contributions, pays 7% national insurance and 5%
health insurance contributions.
Prepayment of insurance contributions
A self-employed person and a person who does not work but has an income must make prepaid contributions by the 15th of each month. The rate of the monthly payments is determined by estimated income. Upon receipt of the assessment
from the Tax Authority, the National Insurance
Institute calculates the differences above or below the insurance contributions.
At the same time, the National Insurance Institute
recalculates the differences between benefits paid
to the insured person for that same period of time
(income replacement benefits, such as maternity
allowance, allowance and military reservists compensation).
Reducing and increasing prepaid insurance contributions
If the amount of the advance as determined by the local NII branch is not based on actual income, please visit the local NII branch in which the insurance contributions account is managed, with
confirmations of income and a form for request for
amendment of advances (672).
Amending the advances can be done up to
4 times a year, once every quarter in January, April, July and October. The amendment will be made based on income confirmations, as required
by the National Insurance Institute regulations.
A self-employed person can reduce or increase
the amount of the prepaid contributions, provided that he submits a request to do so before the end
of the fiscal year and, if he was injured at work, the
request cannot be submitted after the work injury.
If a self-employed person was not injured at work during the fiscal year, and is certain that his income
will be greater than the basis on which the insurance contributions were paid, it is advisable that he contact the National Insurance Institute and request
to increase the prepaid contributions:52% of the
prepaid insurance contributions are recognized
as an income tax deduction for that fiscal year. If a person who is self-employed or not working
is in arrears in paying insurance contributions, he
will be subject to the fines and linkage differentials
prescribed by law. Salaried employees
Employers are required to pay national and health insurance contributions for their employees. Employers must notify of all their employees and their wages, and pay national insurance contributions and health insurance contributions on their behalf. Employers must deduct from the employee’s wages the employee’s share of national and health
insurance contributions at the following rates: For
the portion of income under 60% of the average
wage (NIS 5,453 as of January 2014) 0.4% national
insurance contributions and 3.1% health insurance contributions will be deducted; and for the portion of
income over 60% and up to the maximum income
which is liable for insurance contributions, pays
7% national insurance contributions and 5% health
insurance contributions will be deducted. If an employer did not pay insurance contributions on behalf of his employees on time, he will be
charged with fines and linkage and may even
be sentenced to jail time, and a corporation will
be fined doubly.
Likewise, if an employee undergoes an event that entitles them to a National Insurance Institute
benefit, the NII may demand the benefit amounts
from the employer.
Employers who employ workers in Israel who are not Israeli residents and who live in Judea, Samaria or territories of the Palestinian Authority, are required to pay national insurance
contributions on their behalf (except for domestic
workers), through the Payments Department at the Population, Immigration and Border Authority at the Ministry of the Interior (in the Maternity, Bankruptcy and Work Injury departments).
Employers who employ foreign workers in Israel must notify of them to the National Insurance Institute, and pay national insurance contributions on their behalf.
An Israeli resident who is employed overseas by an Israeli employer, and their employment contract was signed in Israel is, under the National Insurance Law, insured like any worker employed in Israel, and their employee must pay insurance contributions on their behalf, under the guidelines that apply to workers employed in Israel.
If 5 years have passed since commencement of overseas employment, the employer will file an extension request with the National Insurance
Institute. Approval of the request is dependent, among other things, on a residency test the employee must pass.
Employed persons who have non-employment income pay insurance contributions on all income
up to the maximum amount which is liable for insurance contributions, after subtracting 25% of
the average wage and after the employed person’s income has been taken into account.
A salaried employee on unpaid leave An employee who is on unpaid leave from work and is not working at another job during that time must pay insurance contributions himself.
The insurance contributions for the first two months
are paid by the employer.
Employers may deduct these insurance contributions from any amount the employee receives from them. The insurance contributions paid by an employee on unpaid leave as of the third month are minimal, provided that the employee has no income during that time.
A salaried employee working for several employers
The secondary employer must deduct the insurance contributions at the full rate from the employee׳s full salary, unless the employee provides him with authorization from the National Insurance Institute specifying a different deduction rate (״adjusted insurance contributions״). Such an employee is required to submit an income statement to the National Insurance Institute.
Authorization for a deduction at a different rate is given when the employee׳s salary from the primary employer is less than 60% the average wage (i.e.,
NIS 5,453 as of January 2014).
If the insurance contributions deducted from the employee׳s salary are higher than he should have paid according to the report, the difference
is refunded along with index differentials. If
the insurance contributions deducted from the employee׳s salary are lower than he should have paid, he must pay the difference to the National Insurance Institute.
Producing confirmation for insurance contributions coordination, as well as filing a request for return of excessively deducted
insurance contributions, is performed on the National Insurance Institute website, at
www.btl.gov.il/insurance and collection/
coordination of insurance contribution. Domestic workers and their rights A domestic worker is a worker employed for
housework, not for the benefit of the business or
profession of the employer, including caring for children, cleaning of stairways in common buildings, under certain circumstances, and the likes.
Anyone employing a worker at their household must register the worker with the National Insurance Institute, and report and pay national and health insurance contributions on his behalf. The employer may deduct the worker׳s share of the insurance payment from his salary.
When filling out a report on the employment of
a domestic worker, all of the worker׳s particulars must be accurately recorded. Missing or incorrect details may adversely affect the worker׳s national insurance rights.
An employer who does not pay the insurance contributions on behalf of a household employee on time, will be charged with interest and linkage any may even serve a jail sentence. He will also be required to pay insurance contributions on the employee׳s actual wage, but no less than half of the average wage during each month of the employment for which payment is in arrears. Additionally, the National Insurance Institute may demand of an employer who did not register on time, or did not pay insurance contributions on
time, the total amount of the benefits the employee
is entitled to.
The obligation to pay insurance contributions for household employees also applies to anyone employing a foreign worker, or a worker who is not an Israeli resident and whose place of
residence is in Judea, Samaria or territories of
the Palestinian Authority. Insurance contributions for the these workers will be paid directly to the National Insurance Institute.
Career-service soldiers
Career-service soldiers receive health services from the IDF, and health insurance contributions,
together with national insurance contributions, are deducted from their wages. The rate of insurance contributions deducted from their salaries is equivalent to the rate for salaried employees. Vocational training students
A person undergoing vocational training which has been approved for the payment of national insurance contributions under the National Insurance Law, is covered by both national insurance and health insurance. Obligations to pay insurance contributions for the Work Injury branch and Maternity branch (in places approved for it), falls on the institution administering the training, while anyone undergoing training must pay insurance contributions themselves, at the minimum rate which applies to a student.
Insureds living abroad
An insured person living abroad who is not working for an Israeli employer pays insurance contributions based on his income in Israel which is subject to insurance contributions. If he does not have income in Israel, he pays the minimum insurance
contribution (NIS 166 as of January 2014), the same
as a person who is neither a salaried employee
nor self-employed in Israel.
An insured person staying overseas who has income from overseas employment pays insurance contributions according to his income, of which he
reports to the Tax Authority.
The insured person departing overseas must visit his local NII branch, and notify of the departure and arrange his insurance for the duration of his overseas stay.
An insured person staying in a country which has signed a Social Insurance treaty with Israel (Austria, Belgium, Bulgaria, Britain, Canada,
Czech Republic, Denmark, Finland, France,
Germany, Norway, Rumania Slovakia, Sweden, Switzerland, the Netherlands and Uruguay), and pays insurance contributions in that country,
will produce confirmation for payments and be exempt from payment of insurance contributions
in Israel. However, he will be required to pay
health insurance contributions on his income.
Israeli residents living abroad for two or more years
An Israeli resident staying overseas for two consecutive years or more and is not paying health insurance contributions to the National Insurance Institute in Israel for over 12 months, will lose his right to receive medical service in Israel under the National Health Insurance Law. To regain eligibility for medical services, he must go through a waiting period of one month for every “year of absence” from the country. A year in which Israeli residents live abroad for at least 182 days, even if not consecutive, is considered a year of absence. The minimum waiting period is 2 months and the
maximum is 6 months. Special payment
Israeli residents of whom a waiting period is required can redeem it with a special payment,