1. Employees are obligated by law to fill out a 101 tax form for each and every place of employment where they receive a salary (via payslip).
This needs to be done close to your start-date as well as annually, at the beginning of each tax year. The employer usually will issue existing employees a printed version from the payroll program which includes all the existing data, as supplied previously, as it currently appears in the employer’s payroll database.
It is imperative that employees understand that the information they supply, via the 101 tax form can have ramifications as to to their income tax rates. The information is submitted at the end of each financial year to the tax authorities and Social security and cross checked. Supplying incorrect information is a felony and totally the employee’s responsibility.
This is basically a two page, signed statement.
The first page lists all your personal information: Full name, ID number, Address, phone number, sex, birth date, marital status, your spouse’s name, ID number and birth date as well as the same for all of your children.
The second page is a check list of tax credits that you may be eligible for.
These include: Citizen of Israel, made Aliyah, Discharged IDF soldier, single parent, paying alimony for children, 100% blind or invalid, living as a resident of a development area.
All credits that you attest to must be accompanied by documentation (see explanation below) which should be attached to the 101 form.
The bottom of the second page has a short explanation of some of the terms on the first page as well as a place for the employee’s signature and the date. (unsigned forms are not valid – be sure to sign yours)
Changes in any of the details that you filled out on the 101 form, must be reported in writing to your employer within 10 days of the change. Most employers have special forms for this purpose.
Special importance needs to be paid to sections Dalet and Hey on page one. This is where you declare whether you have other income and what type of salary you receive from this employer (monthly, daily, pension, partial or additional).
Note: failure to properly fill out these parts of the form can result in a maximum tax deduction from your pay (currently 45%)
If you made aliyah within the last 3 years, attach a photocopy of your teudat oleh.
If you were discharged from the IDF within the last 3 years, attach a photocopy of your release certificate.
If you pay alimony, attach a photocopy of the court order and your divorce certificate.
If you have a disabled child, apply to the tax authority office in your area for tax credits and attach a photocopy of the permit.
If you live in an area designated as a national priority, attach a declaration of residency (Ishur toshavut) from the local authority (city, regional council, etc)
All of the above documents need to be renewed and submitted annually with the 101 form.
If you are employed by two employers, you will need to fill out a 101 form with each employer.
Note that you can only receive tax credits from one employer and this should be the employer who pays you the higher of the two salaries, so that you can fully utilize your tax credits.
For the 2nd employer, you will need to supply a tax co-ordination as well as a declaration for social security co-ordination (see my blog on this subject)
If you work for more than two employers, you will need to apply to the social security office in your area for the co-ordination.
Tips:
1. write clearly and legibly
2. use a blue or black pen
3. make sure you have filled out all the necessary data and signed the form.
4. attach all relevant documents as proof of eligibility for tax credits you request.
5. it is a good idea to photocopy the form for your own records.
An official 101 form (Hebrew) is attached below.
2. Employees are required to respect the employer’s property and possessions and treat them with respect and care. Reckless use or damages caused by lack of proper operation, carelessness can result in the employer suing or fining an employee for cost of repairs and/or in termination.
3. Employees are bound to follow the employer’s procedures and directives. Failure to do so can result in termination.
4. Employees are required to notify the employer (preferably in writing) as to any change in their personal status, change of address, health issues that effect their ability to perform their duties, within 7 days.
5. Employees must give advance notice to an employer when resigning their position (regardless of the reason or the circumstances)(see blog post on this issue)
