CWS Israel: Olim First Steps

Yes — US citizens are subject to worldwide income tax, even when living abroad. However, Israel and the US have a tax treaty that helps avoid double taxation. You may be eligible for credits, deductions, or exclusions (such as the Foreign Earned Income Exclusion). It’s essential to file both Israeli and US tax returns annually. Working through an Employer of Record (EoR) like CWS Israel ensures compliance in both systems.

The US and Israel do not have a totalisation agreement, which means Social Security contributions made in one country may not automatically count in the other. If you’re working through an Israeli employer or EoR, you’ll contribute to Bituach Leumi (National Insurance) instead of US Social Security. Consult your US tax advisor to check how this affects your future benefits.

Olim can work as:

• Employees of local or international companies (directly or via an EoR like CWS Israel).

• Freelancers (Atzmaim) managing their own clients and taxes.

• Hybrid workers, combining remote contracts abroad and part-time Israeli engagements.
  Each path has different tax, pension, and social security obligations, so choosing the right one is key.

Do’s:
✅ Register properly with Mas Hachnasa (Income Tax), Bituach Leumi, and Ma’am (VAT).
✅ Keep receipts and use an accountant familiar with freelancer taxation.
✅ Set aside money monthly for taxes.

Don’ts:
❌ Work without issuing invoices.
❌ Assume your home-country tax rules apply.
❌ Forget to contribute to pension — it’s mandatory even for self-employed individuals.

Yes — you can, but the structure matters. If you’re employed directly by a foreign entity, both you and the employer may face non-compliance risks. Working via CWS Israel’s EoR model ensures your employment, payroll, and benefits are handled legally under Israeli law while maintaining your link with your overseas employer.

Israel requires both employers and employees to contribute to mandatory pension funds. Olim starting new jobs will begin contributing after a short waiting period (typically three months, retroactive). These funds include retirement savings and life insurance components. An EoR like CWS Israel ensures all contributions are compliant and transparent.

Israeli law provides:

• Annual leave (starting at 12–14 days per year)

• Sick leave (up to 90 days per illness)

• Recuperation pay (Dmei Havra’a)

• Paid holidays and parental leave
  These apply equally to Olim once employed under an Israeli contract.

Bituach Leumi (National Insurance) is Israel’s version of social security, covering health, unemployment, maternity, and pension rights. Registration is mandatory for all residents — even freelancers. Your contributions determine eligibility for various benefits, including healthcare through one of Israel’s Kupot Holim (health funds).

• Receiving foreign income without reporting it to Israeli tax authorities.

• Assuming their overseas employer can pay them directly without local compliance.

• Failing to register for Bituach Leumi on time.

• Not keeping accurate financial records.
  Working through a compliant structure like CWS Israel prevents these pitfalls.

CWS Israel simplifies your professional life in Israel by:

• Handling employment, payroll, and taxes compliantly.

• Managing pension, benefits, and Bituach Leumi contributions.

• Providing HR and legal support tailored for immigrants.
  Whether you’re a US citizen, freelancer, or relocating employee — we ensure your transition is smooth, compliant, and worry-free.

👉 Learn more about our EoR services for Olim here.