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Bitouah Léoumi for independents

Bitouah Leoumi for independents - Cabinet Dray & Dray

Bitouah Léoumi for independents

A self-employed worker in Israel must pay 3 types of taxes/social contributions:

  1. Income tax - Mas Ahnassa.
  2. Le Maam - VAT (except for Ossek Patour).
  3. Bitouah Leoumi for the self-employed - social contribution.

In this article, we will explain what the Bitouah Léoumi for independents in Israel.

You also have access to a simulation to calculate your Bitouah Léoumi in the rest of this article.

LIRE AUSSI: Does every self-employed person have to pay the Bitouah Léoumi?

What is Bitouah Léoumi for independents?

Bitouah Léoumi for the self-employed is a monthly contribution.

This contribution is a kind of insurance that will cover you in the following cases:

  1. Unable to work due to accident.
  2. Prolonged illness.
  3. Milouim (army reservist).
  4. Maternity leave.

What's more, this contribution also forms part of your future pension in Israel.

READ ALSO: Retirement in Israel

Bitouah Léoumi, how much does it cost?

This contribution is calculated on the basis of the self-employed person's accounting profit.

For the year 2024, here is the amount of this contribution:

  1. Up to a monthly accounting profit of Nis 7,522, the self-employed person will have to contribute 5.97%
  2. Above 7,523 Nis per month, the self-employed person must pay 17.83 % for each additional shekel.
  3. Beyond 49,030 Nis, there are no more Bitouah Leoumi contributions.

Social security and health insurance contributions are not deducted at source for the self-employed, so you'll have to pay Bitouah Leoumi fees monthly on account.

Simulate your Bitouah Léoumi.

Here's an example:

The business is due to open on January 1, 2024, and the estimated monthly profit is 8,000 nis.

You'll have to pay 534 Nis monthly, or 6,408 Nis annually.

Finally, when you file your tax return, it turns out that you earned 108,000 Nis a year, or 9,000 shekels a month.

You should have paid 8,556 Nis, so you'll have to add (8,556 - 6,408 =) 2,148 Nis for your 2024 contributions.

Thus, contributions for 2025 will be based on the profit for 2024, i.e. on a profit of 108,000 Nis.

LIRE AUSSI : Bitouah Leoumi for employees.

In a nutshell:

Bitouah Leoumi is a social security benefit.

The amount of social security coverage is the amount contributed at the time of the accident/disability.

So make sure your contributions are always up to date.

Our advice :

It's better be The Bitouah Leoumi will reimburse the "too much" rather than the "too little". The Bitouah Leoumi will reimburse the "too much" in any case. paid " at the balance sheet date.

But you will have "benefited" from greater social coverage during the year.

Your questions - our advice

  • I've just opened my business. How do I know how much Bitouah Léoumi I have to pay?
  • Can I change my profit estimate during the year?
  • I'm self-employed but also an employee. How does the calculation work?

 

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Boruch Levenson - CPA

A native English speaker qualified in both Israel and the UK, Boruch cares for the English speaking clients.

If you've got questions, don't hesitate to reach out.

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Our consultants in Jerusalem

English speaking accountants in Israel
Address: Kanfei Nesharim 68. Merkaz Oranim
Phone number: 02 631 9000
Fax: 02 631 9005
Email: office@cpa-dray.com