{"id":7911,"date":"2013-09-29T11:06:42","date_gmt":"2013-09-29T11:06:42","guid":{"rendered":"https:\/\/aboulafia.co.il\/?p=7911"},"modified":"2025-09-04T11:34:38","modified_gmt":"2025-09-04T11:34:38","slug":"taxation-of-employment-income-part-1-tax-at-source","status":"publish","type":"post","link":"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/taxation-of-employment-income-part-1-tax-at-source\/","title":{"rendered":"Taxation of employment income \u2013 part 1 \u2013 Tax at source"},"content":{"rendered":"<p style=\"text-align: left;\">Over the next few posts, we will cover many aspects pertaining to employment income \u2013 relating to the obligations of both employer and employee, with specific focus on employee rights and taxation.<\/p>\n<div style=\"text-align: left;\"><\/div>\n<div style=\"text-align: left;\">As discussed\u00a0<a href=\"http:\/\/www.taxinisrael.blogspot.co.il\/2013\/04\/are-you-required-to-file-2012-tax-return.html\" target=\"_blank\" rel=\"noopener\">previously<\/a>, a person whose only income is their salary is not required to file a tax return. This is because Israel operates a Pay-As-You-Earn system which obligates the employer to deduct at least the correct amount of tax from the salary of an employee.<\/div>\n<div style=\"text-align: left;\"><\/div>\n<div style=\"text-align: left;\">As a basic rule, each month\u2019s tax is based on the the monthly salary and the various credits that the employee is entitled to for that month. Potentially, that means overpaying in a month in which you got significant overtime pay, bonus etc. The law therefore allows the calculation to be made on a cumulative basis throughout the year if you have worked in the same place since January, or this is your first employment of the year.<\/div>\n<div style=\"text-align: left;\"><\/div>\n<div style=\"text-align: left;\">In order to ensure that you get the correct amount of credit points, form 101 must be filled in (<a href=\"http:\/\/taxes.gov.il\/TaxesFormsList\/itc101_13.pdf\" target=\"_blank\" rel=\"noopener\">link to the form<\/a>); immediately for a new employment and on 1st January each year\u00a0for ongoing employment. On a practical level, it should be filled out in time for your employer to process your first salary of the year.<\/div>\n<div style=\"text-align: left;\"><\/div>\n<div style=\"text-align: left;\">The form is split into two pages. The second page is for claiming all of the\u00a0<a href=\"http:\/\/www.taxinisrael.blogspot.co.il\/2013\/06\/are-you-receiving-all-tax-credits-that.html\" target=\"_blank\" rel=\"noopener\">relevant credits<\/a>. Most do not require any paperwork or confirmation from the tax office, but read the notes carefully!<\/div>\n<div style=\"text-align: left;\"><\/div>\n<div style=\"text-align: left;\">The first page contains some basic information about both employer and employee.<\/div>\n<div style=\"text-align: left;\"><\/div>\n<div style=\"text-align: left;\">Of particular importance is section &#8216;\u05d4 which gives details about the employment. Specifically, if you have more than one place of employment (and for these purposes, a pension is considered another employment), you will, most likely need to get a \u201cTeum Mas\u201d \u2013 the subject of the next post.<\/div>\n<div style=\"text-align: left;\"><\/div>\n<div>\n<p style=\"text-align: left;\">It should be noted that only credits enumerated on the 101 and those directly related to payroll ( e.g. Pension, life insurance etc. if applicable) can be given by the employer. Anything else will need to be claimed via a tax return (the prime example is donations \u2013\u00a0<a href=\"http:\/\/www.taxinisrael.blogspot.co.il\/2013\/09\/tax-relief-on-donations.html\" target=\"_blank\" rel=\"noopener\">see here for more<\/a>).<\/p>\n<p style=\"text-align: left;\">Employers are also required to deduct Bituach Leumi at source. The lower rates of Bituach Leumi will be given in the main employment; all other employments will have the full rate deducted unless a \u201cTeum Bituach Leumi\u201d is done \u2013 but that\u2019s for another time.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Over the next few posts, we will cover many aspects pertaining to employment income \u2013 relating to the obligations of both employer and employee, with specific focus on employee rights and taxation. As discussed\u00a0previously, a person whose only income is their salary is not required to file a tax return. This is because Israel operates [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":8246,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[200,216,250,253],"tags":[],"class_list":["post-7911","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-israeli-taxation-en","category-individual-taxation-3-en","category-itzik-libster-en","category-binyamin-radomsky-en"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Taxation of employment income \u2013 part 1 \u2013 Tax at source - \u05d0\u05d1\u05d5\u05dc\u05e2\u05e4\u05d9\u05d4 \u05e8\u05d5\u05d0\u05d9 \u05d7\u05e9\u05d1\u05d5\u05df<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/taxation-of-employment-income-part-1-tax-at-source\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Taxation of employment income \u2013 part 1 \u2013 Tax at source - \u05d0\u05d1\u05d5\u05dc\u05e2\u05e4\u05d9\u05d4 \u05e8\u05d5\u05d0\u05d9 \u05d7\u05e9\u05d1\u05d5\u05df\" \/>\n<meta property=\"og:description\" content=\"Over the next few posts, we will cover many aspects pertaining to employment income \u2013 relating to the obligations of both employer and employee, with specific focus on employee rights and taxation. As discussed\u00a0previously, a person whose only income is their salary is not required to file a tax return. 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