Introduction:

Employers of foreign workers and agencies that broker and care for foreign workers are entitled to make deductions from the foreign worker's salary that are permitted by law
An employer or agency that makes illegal deductions is committing a criminal offense


Employers are only permitted to deduct payments from a foreign worker's salary that are permitted by law, and only on condition that the worker gave his consent in writing for the following deductions:

  • The employer is permitted to deduct mandatory deductions and permitted deductions from the worker's salary as detailed below.
  • The employer is not permitted to deduct fees paid to the authorities for the foreign worker's work permit. These fees are paid by the employer only.

Who is Eligible?

Mandatory Deductions

  • The employer is obligated to deduct the amount of income tax that the worker in Israel is obligated to pay from his salary, and the employer is also entitled to deduct the amount equal to the worker's share of the insurance fees paid to the National Insurance Institute. These payments must be deducted initially, before the salary is paid to the worker. These rules also apply to the employment of a foreign worker. The following are mandatory deductions permitted by law:
    1. Income tax - is paid based on the worker's salary, gender, and field of work, insofar as they are relevant to determining the tax amount and taking into account the credits to which the worker is entitled (such as Income Tax Credit Points for Foreign Workers and Income Tax Credit Points for Pension Insurance Contributions.
    2. National Insurance Payments -
      • The employer is permitted to deduct the amount the worker must pay for National Insurance. For information on how much can be deducted see National Insurance for Foreign Workers.
      • This amount is transferred to the National Insurance Institute.
      • An employer of a foreign nursing care or household worker is not permitted to make any National Institute payment deductions from his worker.
    3. The worker's share of his pension insurance - the employer is permitted to deduct the worker's portion of his pension insurance (6% of his salary as of January 2017), from the worker's salary, on condition that this amount is transferred to a pension fund, provident fund or managers' insurance. (If the employer deposits the money into a deposit or savings plan that is not a provident fund, he must not deduct the worker's share from his salary and must only transfer the employer's share and severance pay components to the savings plan or deposit account.)

Permitted Deductions

  • The employer may deduct from the foreign worker's wages, membership dues for the workers' organization for which the worker is a member and the total monthly sum deducted for the following things, should not exceed more than 25% of the worker's salary:
    1. Health Insurance -
      • In accordance with the Foreign Workers' Regulations (Amount that can be deducted from the salary for health insurance), the employer is permitted to deduct the worker's portion of the insurance policy cost from his monthly salary:
        • For a foreign worker that is not in the nursing field it is permitted to deduct up to one-third of the amount that the employer paid, or committed to paying, for medical insurance, up to a maximum of 125.09 NIS a month, as of January 2019 (123.61 NIS in 2018).
        • For a foreign worker employed in the nursing field it is permitted to deduct up to half of the amount that the employer paid, or committed to paying, for medical insurance, up to a maximum of 136.24 NIS a month, as of January 2019 (134.63 NIS in 2018).
    2. Deduction of Living Expenses for Foreign Workers-
    3. Advance - Refund of an advance payment on account of wages paid to the employee, provided that the sum of the advance does not exceed the worker's salary for three months' work.
    4. Debt - Refund of debt that the worker owes the employer, based on a written agreement, such as a loan repayment, provided that the deduction does not exceed one quarter of the worker's salary.
    5. An amount imposed as a disciplinary fine in accordance with a collective agreement or statute.
    6. Donations that a worker agreed in writing to have deducted.

Deductions Permitted to be Made by Brokerage Agencies that Bring in and Care for Foreign Workers

A foreign worker that does not work in agriculture

A foreign worker that works in agriculture

  • A private agency that handles foreign workers in the agriculture sector may collect or receive from the workers a payment not exceeding 2,756.54 NIS (before VAT), as of January 2019 (2,723.95 NIS in 2018) upon the worker's entry into Israel.
  • The payment may not be collected from a worker who was brought to Israel in advance for a period of less than 12 consecutive months and for whom the private agency is not obligated to provide services based on a contract or a letter of undertaking.
  • If the agency finds out that the foreign worker has permanently left Israel, it must, within 30 days from the date on which it becomes aware of the fact that the foreign worker has left, return the following amounts to the worker:
    • 60% of the amount that it collected - if the foreign worker leaves before 18 months have elapsed since he/she entered Israel.
    • 33% of the amount it collected - if the foreign worker leaves after 18 months have elapsed and before 36 months have elapsed from the date the foreign worker entered Israel.

Conditions for collecting payment from the worker

  • An agency licensed to bring foreign workers to Israel is entitled to collect payment on condition that it signed a written brokerage agreement with the worker detailing the terms of the brokerage agreed upon by the parties, and gave the foreign worker a copy of the contract.
  • If the employee has previously paid an overseas agency that represented him to the Israeli agency or to another office in Israel, the amount that he has already paid will be deducted from the maximum amount that can be collected from him.
  • The agency may not collect brokerage fees from a foreign worker who is already in Israel.
  • In addition, the agency may charge the foreign worker for the expenses of the flight to Israel, provided that he has receipts or documents that verify these expenses.
  • A private agency that collected or received payments from a foreign worker shall refund the foreign worker all the money that it received or collected from him in any of the following cases:
    • The foreign worker did not arrive in Israel within a reasonable time from the date of payment.
    • The foreign worker arrived in Israel, but within a year of his arrival he was not paid or the salary he received was less than 12 times the monthly minimum wage.

Deducting a deposit from the salary of a foreign worker who is an asylum seeker

  • As of 01.05.2017, the employer of a foreign worker who is an asylum seeker is required to make a monthly deposit worth 36% of the worker's salary, directly into a separate bank account for the worker.
  • The employer pays 16% of the worker's salary into the deposit account and 20% is deducted from the foreign worker, asylum seeker's salary.
  • For additional details see Security Deposits for Foreign Workers who are Asylum Seekers.

How to Claim It?

  • A private agency is entitled to charge a foreign worker fees for brokerage services at the time the employment contract is signed in the country of origin or upon arrival in Israel.
  • The employer should make the legally permitted deductions from the worker's monthly salary.
  • The employer is responsible for transferring the deducted money to relevant authorities (National Insurance, income tax, health insurance) at the dates determined for each deduction by law.
  • An employer who deducted money from the worker's salary that is intended for other bodies (such as national insurance contributions, income tax, membership dues, contributions that the worker agreed to deduct from his salary, etc.), and did not transfer the funds to these bodies within 40 days from the date on which it had to be paid according to the law, commits a criminal offense, punishable by a fine or imprisonment for a period of two years. For more information, see transfer of deducted funds from an employee's salary to the bodies for which they are intended.
  • Deduction of payments not permitted by law or deduction of amounts greater than those specified on this page is a criminal offense punishable by imprisonment of one year or a high fine.
  • If an employer or a private agency deducts illegal payments from the worker's salary, a complaint must be filed against the employer or the agency.

Submitting a claim regarding violation of the worker's rights

Please Note

  • Employment of a foreign worker without a signed employment agreement is a criminal offense, punishable by imprisonment and a fine of thousands of shekels.
  • In the event of a violation of the worker's rights, assistance can be obtained from aid organizations that help foreign workers.
  • The worker must be informed of the deductions from his salary in the employment contract prior to the commencement of work and his consent must be given.
  • In the event that the employer does not deduct the permitted deductions as detailed above (for housing, related expenses, medical insurance and food), it is not permitted to make deductions retroactively.

Aid Organizations

Government Agencies

Laws and Regulations

Additional Publications

Credits