This survey can’t tell you how soon you will
work or how much you will earn, but it will attempt to describe the basic
components of salary and benefits which you may receive.
The following is a table of approximate
monthly gross incomes (in shekels – divide by 4.2 to translate to dollars) for
full time positions for salaried workers by profession:
|
Field |
Entering Salary* |
Experienced Professional* |
|
Computers |
5,000 –8,000 |
10,000 – 25,000 |
|
Accountants** |
3,000 –5,000 |
10,000 – 20,000 |
|
Engineers |
5,000 – 7,000 |
10,000 – 20,000 |
|
Economists |
5,000 – 7,000 |
10,000 – 20,000 |
|
Technical Writers |
4,000 – 6,000 |
10,000 – 20,000 |
|
Marketing |
4,000 – 6,000 |
10,000 – 20,000 |
|
Doctors |
5,000 – 7,000 |
10,000 – 20,000 |
|
Lawyers** |
3,000 – 5,000 |
8,000 – 20,000 |
Architects
|
4,000- 6,000 |
8,000 – 15,000 |
|
Secretaries (Hebrew/English) |
3,500 – 4,500 |
5,500 – 6,500 |
|
Pharmacists |
4,000 – 7,000 |
8,000 – 15,000 |
|
Teachers (university) |
6,000 - 7,000 |
10,000 – 15,000 |
|
Teachers (high school) |
4,000 – 5,000 |
7,000 – 8,000 |
|
Teachers (grade school) |
3,000 – 4,000 |
5,000 – 6,000 |
* Based on income information used for tax filing purposes.
Includes the value of company cars, but does not include the value of employee
contributions to savings plans (explained in Monthly Pay Slip below)
** An “apprenticeship” at low salary is needed in
order to receive full professional certification.
Salary levels for middle and senior management in
these professions are higher than for experienced professionals, and it is
difficult to fix an upper limit on management salaries. Certainly, salaries of
40,000 shekels per month are not unheard of.
The salary levels
listed above are for people who have full Hebrew language skills and for
experienced professionals, the intent is for those with experience in
Monthly Pay Slip – A monthly
pay slip in
The salary slip is generally divided into two
parts, gross pay you received, and deductions from pay. Gross pay less deductions
equals net salary received.
The following is a brief summary of potential
data on a salary slip (not every employer pays all of the categories of gross
pay):
|
Category |
Sub-category |
Explanation |
Gross Pay
|
Base Salary |
Everyone gets this |
Overtime Pay
|
Hours multiplied by per hour rate |
|
|
Experience Premium |
Addition of 1% per year of experience |
|
|
Month 13 salary |
Since there are 52 weeks per year, but only
12 months, some employers pay a 13th month salary |
|
Vacation
pay
|
By law, employees are entitled to a salary addition for at least one week of vacations. This payment is over 1,000 shekels and depending upon the employer’s generosity, can reach at least 5 times this amount. The amount is generally paid in full at the beginning of the summer |
|
|
Public Transportation Allowance |
Covers the cost of traveling to work by public transportation. By law, a public transportation allowance must be paid unless this cost is expressly dealt with in the framework of base salary, or in the form of a car allowance |
|
|
Car allowance |
Allocation per kilometer multiplied by cost
of operating vehicle per kilometer traveled |
|
Deductions
|
Income Tax |
The more you earn, the more you pay (see
Table below) |
|
National Insurance |
About 5% of gross pay. Insurance for
unemployment, disability, retirement |
|
|
Health Insurance |
About 5% of gross pay. Insurance for
doctors visits, operations. |
|
|
Pension* |
About 7% of worker’s base salary (the
employer contributes too). Provides for monthly pension upon retirement |
|
Kupat Gemel*
|
5% of worker salary (the employer
contributes too). Sometimes paid on non-base salary as an addition to
pension, and sometimes on whole salary. Funds a one-time lump sum payment
upon retirement. |
|
|
Manager Insurance (generic term – not
limited to managers)* |
5% of worker salary (the employer
contributes too). Generally paid on base salary only. Funds a one-time lump
sum payment plus disability insurance. |
|
|
Keren Hishtalmut* |
2.5% of worker salary (the employer
contributes 5% or 7.5%). Generally paid on base salary only. Funds a one-time
payment every 6 years, which may in theory be for education, but in practice
may be used however the worker chooses |
|
|
Union Fee |
1% of base salary, when a union exists |
* These deductions are considered optional worker benefits. Some employers give them to all workers, some employers give them to some workers and not others, and unfortunately, some places of employment won’t offer them at all.
Given that money set aside
for pension and manager insurance is usually paid only on base salary, it is
important to structure your salary so that your base salary represents a high
proportion of total salary.
One benefit that all workers are entitled to without
deduction from pay is “Pitzuim” (separation pay). The
employer sets aside 8.3% of the base salary (one month per year), which is paid
to the employee if he is laid off.
Calculating Income Tax – As in your country of origin, income tax is
calculated according to marginal tax rates and deductions from
tax owed.
The following is a table of marginal tax rates
for 2007:
|
Monthly Salary (in shekels) |
Marginal Tax Rate |
|
The first 4,170 |
10% |
|
4,171 to 7,420 (the next 3,250) |
21% |
|
7,421 to 11,140 (the next 3,720) |
29% |
|
11,140 to 16,000 (the next 4,860) |
35% |
|
16,000 to 34,450 (the next 18,450) |
36% |
|
Above 34,450 |
48% |
The primary deduction from tax is tax credit
points. Each point is worth 178 shekels. Points are allocated as follows:
|
Category |
Points |
|
Male Resident of |
2.25 |
|
Working woman without children |
2.75 |
|
New Immigrants |
3 extra points - first 18 months in |
|
Working woman with children |
2.75 points plus one extra point per child |
As such, the following is a short, simplified example
of a pay slip for a married man who is a new immigrant:
|
Line Item |
Amount |
|
Base Salary |
9,000 |
|
Overtime |
1,000 |
|
Total Salary |
10,000 |
|
Less: |
|
|
Income Tax (based upon marginal tax rates and 3
extra tax credit points) |
913 |
|
National Insurance |
500 |
|
Health Insurance |
500 |
|
Total
Deductions |
1,913 |
|
Equals: |
|
|
Net Salary |
8,087 |
* For simplicity, it is assumed that there are no
employee deductions for
Pension, Kupat Gemel,
Manager Insurance and Keren Hishtalmut.
Job Offer Pitfalls
1. Total Salary versus
Net Salary – Some employers will make you an offer of Total Salary, which
is prior to total deductions, and others will cite a Net Salary figure, which
is after total deductions.
Recommendation: Since the size of
deductions for Pension, Kupat Gemel, Manager Insurance
and Keren Hishtalmut are related to gross
salary, have th employer cite you offers for Total
Salary and Net Salary.
2. Optional worker benefits – some
employers will start putting aside money for Pension, Kupat Gemel,
Manager Insurance and Keren Hishtalmut
from the beginning of your employment, others will start them only after
completion of a trial period, and others will not offer them at all.
Recommendation: Since these payments can
amount to over 10% of total salary, be sure to understand whether they are
included and other what conditions.
3. Annual Pay versus Monthly
Pay – some
employers will quote an a monthly wage that includes
the proportionate monthly amount (1/12) of one time or periodic payments for
month 13 salary and of vacation pay. This provides the illusion of a higher
salary than you will receive on a month-to-month basis.
Recommendation: Ask whether the monthly
salary offer factors in these payments.
4. Vacation and Sick
Leave – by law, your employer is obligated to give you 10 vacation days per
year, and need not pay you if you are out of work for less than 3 days. Many
employers are much more generous, and will give at least 20 vacation days per
year, and pay you if you are out of work for 1 day.
Recommendation: Ask what the employer
provides.
Miscellaneous
Basic Training and Reserve
Duty – If you are called to serve, you will be paid either directly by your
employer, or by National Insurance.
Employment Within Karnei Shomron
1.
Teachers –
There are a number of kindergartens, primary schools, and high schools in the
area, which provide a possible source of employment for teachers.
English is taught in the school system from third grade and up.
2.
The Karnei Shomron Local Council
operates a learning center, which employs occupational, physical and speech
therapists.
3.
For those who’s Hebrew is fluent, jobs may be available in the local
municipality’s offices.
4.
For young adults with fluent Hebrew, there are
part-time work opportunities at the local mall.
Job Sources and Contacts
·
Networking with friends and neighbors
·
Tehillah and the Association of Americans and Canadians in Israel (AACI)
provide employment counseling and maintain data banks of available positions
that were sent to their offices.
·
Nefesh B’Nefesh provides a network of contacts and
job placement assistance.
·
Newspapers,
both the Jerusalem Post and the Hebrew papers, advertise available jobs,
particularly on Fridays.
Telecommuting with your pre-Aliyah Job
This option appears to have
spread among immigrants who liked their pre-Aliyah
job, and whose work does not involve direct daily contact with other employees.
If you think this is a potential option, check with your pre-Aliyah employer before you move to
Setting up a Business in
Despite objective
difficulties with language, lack of familiarities with the system and with the
market for the good or service to be provided, some new Olim
decide that working on their own beats working for others.
However, we caution new
immigrants from exploring this option before you have mastered the language,
know the system (including reporting to the Income Tax Authority (“Mas Hachnasah’) and the Social
Insurance Institute (“Bituach Leumi’),
and have researched the outlook for the service you wish to provide. Running a
new business in
Job Stability versus Potential for Improved
Compensation
As in seeking employment in the
Let’s define terms:
Job Stability – the chance of achieving long-term
employment without fear of layoffs due to efficiency measures or of business
closure.
Potential for Improved Compensation – the opportunity to improve your
compensation package over time. This opportunity depends on the financial
health of the employer and the extent to which the employer is geared to
promote professional advancement.
In general, employment opportunities in which both job
stability and the potential for improved compensation are high are fairly
limited. In many cases, there exists an inverse relationship between the two.
However, in
L=low, M=medium,
H=High
|
|
Chance for
Improved Compensation |
|||
|
L |
M |
H |
||
|
Job Stability |
L |
Small businesses |
|
Start-ups |
|
M |
|
Non-bank financial,
academia |
Large Israeli owed
companies, |
|
|
H |
government |
|
Subsidiaries of
foreign companies, banks |
|
From this diagram, it can be seen that:
1.
Small businesses (private stores or
companies with only a few employees) tend to offer limited job stability and
limited opportunity for improved compensation.
2.
At
the other end of the scale, Israeli subsidiaries of foreign companies and
commercial banks tend to be stable employers who also offer good opportunities
for professional advancement and as a result, increased compensation.
3.
As in other countries, Israeli start-ups
tend to be risky but offer potential for compensation growth (assuming the
company stays viable long enough).
4.
Government (both national and local) tends
to be a stable employer with relatively limited opportunities for improved
compensation. However, government jobs sometimes provide a good starting point
for obtaining initial
Tax Issues in
Beyond an understanding of how various taxes are
calculated (see Monthly Pay Slip and Calculating Income Tax above), the
following are several tax issues that you should be aware of:
1.
First year in
· You were likely taxed in your pre-Aliyah
nation based upon earning a monthly salary for a 12 month calendar year. Even
if
· If you work in
Be aware: Even though the professional person who
hired knows that you are a new Oleh, chances are that
he/she will not realize that there are tax implications and won’t notify the
payroll department.
If you don’t get income tax reduced during the year,
you can file a short form with the Income Tax Authority and receive a tax
refund after the year is over.
2. American Citizens in
Aside from being a good citizen, in the 2001 – 2010 period there is a less altruistic
reason to file:
Families with children age 16 and under are entitled
to substantial tax credits for each of these children. For example, in the year
2006 if a U.S. family living and working in Israel shows that its Israeli
income tax is higher than the income tax it would have paid on that income in
America, its tax obligation to the Internal Revenue Service is zero, and in
addition it is entitled to a refund of $1,000 per child age 16 and under.
There are cases where the childcare credit may not
lead to a refund:
· Self employed workers who owe social security tax – the
credit will only partially offset social security tax
· The family has substantial taxable income on interest and
dividend income from