Understanding pay-slips in Israel isn’t simple. Especially not for people who can’t read Hebrew! To make sure that there are no mistakes in their payslips, workers in Israel must examine and check them every month. There are different payroll programs used by small employers or/ and accountants’ offices who run payroll for their clients.
In order to meet the mandatory requirement defined by law and regulations, pay-slips in Israel are generated by the payroll programs and are usually in the Hebrew language. The pay-slip’s layout and placement differ a bit from program to program, however, there are basic information and requirements that are mandated by law. The Israeli payslip can be translated into English but this can be costly at times. As long as all the required data by Law is provided, signed and has the company stamp on it, the pay-slip is considered legal.
The Israeli pay-slip is generally quite comprehensive, and contains various sections including: Specific information (header), Payments (Tashlumim- תשלומים), Mandatory deductions (Nikuei Chova – ניכויי חובה), Voluntary deductions / commitments (Nikuei Reshut – ניכויי רשות / Hitcheivuyot – התחייבויות), and General information / accumulated sums (Meida klali – מידע כללי / Mitstabrim – מצטברים).
Breaking it down:
The Specific Information section or header usually includes the employer’s name, the number of work Department, address, tax identification number, the employee’s bank account details, and the start date. The employee’s vacation and sick days, balance at the start of the pay period, credit for the pay period, debit for the pay period might also be included.
The Payments section contains all the components paid to the employee for the pay period. Mandatory Deductions section includes details of all deductions that are mandatory by law like Income tax, Social Security, Health Levy, and mandatory pension contributions. Unlike mandatory deductions, the Voluntary Deductions includes all the deductions that are voluntary including advances on the payslip, repayment of loans to the employer, charges for purchases to employees from a company store/collective purchase, and others.
The General Information section contains the monthly gross pay for the tax and social security purposes and the monthly gross base pay for the pension.
Generally, the footer of the pay-slip shows lists the number of days for tax purposes for each of the months worked. The total gross pay, total deduction, net pay, total voluntary deductions and pay in the bank are usually listed in this section.
To sum up, payroll in Israel is considered much more complicated than in any other country. Pay-slips in Israel must be approved by the tax authority, and therefore are quite comprehensive. Should you require assistance understanding your Pay-slips, please contact your accountant or payroll department at your employer, or feel free to reach out to us!