By Amit Acco, Partner |
Under Israeli law, all foreign employees have the same type of work visa, the B-1 work visa. The B-1 work permit process is different in the various sectors (for example care givers, constructions, agriculture, Experts, Hi-Tech, etc).
Although the visa category is the same, there are different regulations for each category, in relation to medical insurance, housing, salary etc. Such differences may sometimes creates confusion in relation to the benefits and employers’ deductions allowed from the foreign employee’s salary in the various categories.
The following is a guide to the possible deductions employer can make from the foreign employee in Israel:
Housing
An employer can deduct part of the actual cost of the employees but no more than an amount determined by the regulations. The amount varies depending on the area of residence (if the residence is owned by the employer, it is allowed to deduct only half of the amount stated in the following table 2022).
Area Sum allowed for deduction
Jerusalem 431.01
Tel Aviv 490.02
Haifa 326.82
Center 326.82
South 326.82
North 267.33
Utilities
An employer can deduct from the employee’s salary some of the expenses that the employer actually paid, such as water, electricity, property tax, gas.
This is the relative share of the employee in the accommodation that the employer provided for him at his own expense.
Medical insurance expenses
An employer may deduct from the employee’s monthly salary, reimbursement of expenses in an amount not exceeding 1/3 of the amount that the employer spent or undertook to spend, for medical insurance for work, but no more than:
– Foreign employee in home nursing: 146.55 NIS;
– foreign employee employed in the field Other: 127.72
Other Payments
Payments agreed in writing between the parties that the employer will pay – and the employee will return as – a loan).
National insurance
An employer may deduct 0.04% from the first 6,331 shekels of the employee’s salary and 0.87% from each additional shekel from his salary. The employer must transfer the deducted amounts to the National Insurance Institute. The amounts are updated annually.
Income Tax
Income tax payments are deducted from the employee’s salary by the employer and transferred to the tax authority. An employer is not allowed to deduct from the salary of a foreign employee any levy or fee imposed on the employer.
Advance Payments
The employer is allowed to deduct advance payments that he paid to the employee from the salary account during his work – provided that the interruptions do not exceed the wages for the last 3 months of the employee’s work for the employer. It should also be noted that the employer must prove that the deducted payment was actually transferred/paid.
According to the regulations, all deductions from the employee’s salary in one month may not exceed 25% of his salary in that month; But if it is the last month of work, it is allowed to deduct the balance of the employee’s debts to the employer from the last three months of work.
