Repeatedly I see the confusion regarding Taxation, Social Security, Insurance and How to get Paid as a Writer in Israel.
Writers, there are stages you have to go to before you charge over 100,000 nis and need the Accountant every month. Did you know that? I was sharing with a friend who worked In-House and is now moving towards freelancing, and these are the tips that I gave her:
Level 1: Schar Sofrim – If you are a writer, and you know you are going to need to charge your client a certain amount, take your client’s Company Number (Chet Pey) and get the tax reduction from the Tax Authority using Schar Sofrim. The page they give you is given to the Client and they will remove the tax ‘Bamakor’ (at the source). You do not need to open a File with Tax Authorities to do this. All you need is to have accessibility to the site or go there yourself and get it directly. See: http://ow.ly/761dA
Level 2: Getting a Tlush – You’ve decided to start a business but you don’t want to open a File with the Tax Authorities until you know for sure you won’t have to close it. FYI, closing can be by far, more complicated than opening a ‘Tik’ because the Tax Authorities may need to audit your accounts to varify no illicit activities have taken place before the Company is closed. This has also been known to take a long time… This is why some people have prefered to go via an agency that gives you a Tlush, otherwise known as a Salary Slip. I don’t suggest you do this for more than a year running though, as some of these agencies sometimes get audited by the Tax Authority, and questions can be asked, albeit it is not illegal, this is a grey area…You should definetly know whether you need to open a Company or not by the time a year is out.
Level 3: Osek Patur – Charging up to 100,000 nis a year you need an accountant once a year for this and there are tax breaks on bills based on having your office at home, etc…Speak to a registered accountant.
Level 4: Osek Murshe – Charging over a certain amount you will have to visit your accountant more frequently and take charge of all your expenses if you want any tax breaks. Speak to a registered accountant.
Your Social Security can be paid via an agency when you are using Level 2. Social Security is NOT Insurance. If you have Social Security rights it’s because you paid Social Security, however you still need Health, Nursing, Life, Management and other insurances. For this, you need an Insurance agent.
How to get Paid as a Writer
If you are a writer, you may want to look at my article about Tips for Consultants in order to understand that getting paid in Israel is Business, not personal and you have to understand the culture in order to succeed.
I wish you the best of success in your ventures and I’m available for interactions on this page.