Taxation of employment income – part 2 – The Teum Mas
At the end of the last post, I made mention of the importance of section ה on form 101.
This section tells the employer whether you have another employment. If so, you need to indicate if this particular employment is your main job.
If it is, the employer will tax the salary as if it is the only employment, i.e. the regular tax rates and credits are all given.
However, for any other employment, the employer is required to deduct the highest rate of tax on the entire salary, currently 48% or 50%. However, as this is likely to be way over the top, the tax authority can instruct the employer to deduct a lower rate of tax. This instruction is known as the Teum Mas. Typically, the Teum Mas will say that (a) the main employer should tax regularly, giving full credits, and (b) other employers should deduct x% at source on income up to a certain level (cumulative for the year), and at a higher percentage on anything above that level.
Please note that a Teum Mas is not required if you have chosen the employment as the main employment, even if you indicated that you have another employment. A lot of employers will still ask for one, but you are not required to do so by law.
In very simple cases, a Teum Mas can be done online – here. You will need to have the nine-digit mispar nicuyim (will start with the digit 9) of each employer – this should appear on your tlush. For further identification, the site requires you to provide either your driving license or passport number. Once completed, the formal Teum is set to your home address.
In order to speed things up, or in not-so-simple cases, you will need to go to your local tax office in order to get the Teum. The form that you will need can be found here, and the second page looks very similar to the second page of the 101. Read the instructions carefully – there may be documents that you will be required to provide. You will also need to take some payslips with you to prove the level of income.
It is important to understand that the Teum Mas is calculated in order that at leastthe correct amount of tax is deducted. But it is still possible that you will have too much deducted from your salaries. The only way to get this back is via a tax return, and for that you will need form 106, the subject of the next post.