Bituach Leumi for self-employed
In the same way that employees are required to pay Bituach Leumi on their salary, so too is a self-employed person required to pay Bituach Leumi on their earnings (profit).
Bituach Leumi will charge you a fixed amount per month based on your status and expected earnings. I recommend that you set up a standing order to pay this. Here are links to set this up on your credit card or directly from your bank account.
Once your annual tax return has been filed, Bituach Leumi are given the details of your earnings, and issue a final calculation. This is based on the actual reported profit, divided into the number of months that you declared you were self-employed during the year. Overpayments will be refunded, underpayments will need to be paid – both with the addition of 0.5% interest per month (as Bituach Leumi is a monthly tax) as well as linkage to the retail price index (הצמדה).
It is possible to amend (be it increase or decrease) the basis on which you are paying your payments on account to Bituach Leumi. However, it is only possible to do so during the tax year. Once 1st January comes round, the only way to amend a prior year is by filing the tax return. Be aware that Bituach Leumi, as opposed to the Income Tax office, doesn’t like receiving surprises from you. So if you want to pay a bit more, you have to formally increase the basis of your earnings. Any amounts that they consider to be overpaid (because the amount is not due) will be refunded within a month or two.