By Amit Acco, Partner

Any employer that employs a worker who is not a resident of Israel is considered an employer of a foreign employee, and must report him to the National Insurance Institute and pay National Insurance premiums for him. Foreign employees in Israel are insured by the National Insurance for cases of injury at work, maternity allowance, child allowance and bankruptcy of the employer.

Important note: This article is not relevant to employers and employees in the health care industry, as different premiums are conferred upon them.

A foreign resident employed in Israel – Premiums

On the part of the salary that is up to 60% of the average salary (NIS 7,122, as of 2023): The total deduction from the employee’s salary , for social security contributions, is 0.63% according to the following distribution:

  • Social security contributions at the expense of the employer at a rate of 0.59%
  • Social security contributions at the expense of the employee at a rate of 0.04%

On the part of the salary above 60% of the average salary up to the maximum income per month that is subject to insurance premiums (NIS 47,465, as of 2023) – The total deduction from the employee’s salary is at a rate of 3.52%, according to the following distribution:

  • Social security contributions at the expense of the employer at a rate of 2.65%
  • Social security contributions at the expense of the employee at a rate of 0.87%

The steps of the procedure


Registration of a foreign resident employee at the National Insurance Institute will be done as follows:

A new employer who has not yet opened a deductions file in the National Insurance : Anyone who has started to employ an employee or workers in the business for the first time and they are foreign residents, must open a deductions file at the income tax offices within two weeks of the start of employment and indicate that he employs a foreign resident (if the employee is a resident of the Palestinian Authority or a resident of Judea and Samaria employed In “area”, the employer must indicate this).

The National Insurance Institute will automatically receive the information about the opening of the file and its number from the Income Tax, and will open a file for the new employer in the National Insurance as well.

An employer with a file of deductions in the National Insurance Institute – a person who already employs an employee or workers who are residents of Israel (and reports for them in the file of deductions opened for him at the National Insurance Institute) and has begun to employ non-resident workers for the first time:

must notify in writing the branch of the Institute for National Insurance where the deduction file of the business is conducted about the start of employment the employee is a foreign resident

When the information about the employment of non-resident workers is received by the National Insurance Institute, the following will be sent to the employer:

a. Notice of the opening of a “reporting contract” for the employment of non-resident workers.

b. A register containing accounting forms on the employment of workers according to the type of workers he began to employ.

In addition, a new employer will also be sent:

c. Notice of the opening of a case, stating the number of employees he reported and the rates of the National Insurance contributions he must pay.

d. A questionnaire to complete details, which he must fill out and return to the National Insurance Institute.

Payment Date

The deadline for reporting and paying National Insurance contributions for non-resident employees is the 15th of each month for the previous month.

Payment methods

You can report and pay for a non-resident employee through:

  • A report form for foreign residents that is sent in a register to the employer at the beginning of the year.
  • “Accounting for employment of foreign residents” form on the payments website .

Report of termination of employment

For months in which non-resident workers were not employed, reporting code 5 = non-employment must be entered in the accounting form.

An employer who has stopped employing non-resident workers, will record in the accounting form reporting code 9 = termination of employment, or will notify in writing of the termination of employment to the branch of the National Insurance Institute where the deductions file of the business is handled.

Important Information

  • The employer must pay social security fees for a foreign resident employee to 3 insurance branches: work injury insurance, workers’ rights insurance in bankruptcy and corporate liquidation, and maternity insurance.
  • Foreign residents are not insured, by law, with state health insurance . An employer of a foreign employee is obliged to purchase private health insurance for the employee, at his own expense .
  • An employee who is a foreign resident who submits an application to the National Insurance to receive an allowance, his application will be reviewed and approved in accordance with the rules.
  • The National Insurance Institute may investigate employers suspected of non-payment of insurance premiums for their employees, and in some cases charges may be filed. For information on the rights of those being investigated, see Rights of those being investigated in the National Insurance .