By Amit Acco and Jessica Morag |
Under Israeli law employers of foreign workers must pay a levy of between 15%-20%, depending on certain factors such as the industry and wage of the employee, though this levy was not previously imposed on employers of foreign experts, athletes, and health care workers.
Earlier today the Knesset (Israeli Parliament) voted, at “first call” to abolish this levy altogether. At this stage, the government needs to present a bill of law, that must pass the Knesset in two additional rounds before the levy may be abolished. Once passed, the bill will become law, and the foreign employee’s levy will be abolished in its entirety.
The levy cancellation is expected to save employers and developers huge costs especially in the construction and infrastructure industries where employers currently pay 15%-20% in addition to employee wages..
As for the reason for this proposal, Knesset Member, Meirav Ben-Ari said:
“The Covid-19 Pandemic has severely affected business owners in Israel. Small businesses collapsed, those that survived suffered a heavy economic price. I submitted the bill already in the 20th Knesset with the understanding that the levy is a heavy burden on Israeli business owners. “In many industries, the levy has been abolished in the past, now and in light of the difficulties of the period, it is time to abolish it in the other industries as well,”