Foreign Caregiver Payroll

Foreign Caregiver Payroll and Employment (Israel)

Legal notice

This is a free information tool operated by an AI model. It collects the rules that apply to employing a foreign nursing caregiver in the patient's home and computes an estimated monthly cost from figures you supply, with no involvement, review, or approval by a labour lawyer. The output is not legal advice and not a legal opinion; it is general explanation and an arithmetic estimate only. It does not examine your employment contract, does not check actual payslips, does not decide entitlement to severance pay or to a global wage supplement, and does not represent you before the Population and Immigration Authority, the National Insurance Institute, or the Tax Authority. An AI model may err, omit data, or present a wrong conclusion, and the rates and amounts in this field are revised annually, sometimes with retroactive effect.

Do not rely on the output as the basis for a deduction from the worker's wage, for ending the employment, or for computing the final payment on termination. A deduction not permitted by law is a criminal offence, and under-computing severance, recuperation pay, or leave redemption can trigger a claim. This tool is not a substitute for advice that takes account of the particular data and needs of each person; before any deduction, dismissal, or final payment, consult a labour lawyer and verify every amount against the current Population Authority circular and against the National Insurance Institute. Any use of the output is at your sole responsibility.

Problem

Israeli families who bring a foreign caregiver home for an aging or disabled relative are suddenly an employer, with a stack of obligations almost nobody explains in one place: a permit, a licensed bureau, minimum wage, National Insurance, pension and severance, recuperation pay, vacation, and holidays the worker may take by their own religion. The numbers are scattered across the Population Authority, Bituach Leumi, and labor law, and a single wrong assumption (for example, that the home employer pays into the foreign-worker deposit fund, which is false) can cost thousands or trigger a claim. This skill lays out the legal process and turns the rules into one honest monthly-cost figure.

Instructions

Work through whichever parts the user needs. Most users want either "how do I do this legally" (Steps 1-2) or "what will it actually cost" (Steps 3-5). You do not have to run them in order.

Step 1: Confirm eligibility and get the permit

A family may only employ a foreign caregiver for a relative who is NOT in an institution and needs essentially full-time care. Eligible recipients include seniors aged 85 and over, recipients of the special-services benefit (sherutim meyuchadim, "שר"מ") at a rate below 112%, work-injury and cancer patients, and a disabled child, among others.

Employing a foreign worker requires an employment permit (heter haasaka) from the Population and Immigration Authority (Rashut HaUchlusin VeHaHagira). Without it the whole arrangement is illegal. Some requests are referred to a professional advisory committee.

Step 2: Register with a licensed private bureau

After (or alongside) the permit, both the employer and the worker must be registered with one of the licensed private placement bureaus (lishka pratit) for the nursing sector. The bureau handles recruitment, work visas, and stands in on worker illness or death. Going around the bureau is not an option for this sector.

Step 3: Set the wage floor correctly

The "no overtime" rule comes from the Yolanda Gluten litigation: HCJ 1678/07 Gluten v. National Labour Court (2009), reheard by an expanded panel in HCJFH 10007/09, which is the operative authority. It holds that the Hours of Work and Rest Law 5711-1951 does not apply to live-in caregivers, so a live-in caregiver is paid a monthly global wage rather than clocked hourly overtime. Note the scope: this is about the caregiver living in the patient's home, where hours cannot be supervised. Work outside that setting, and caregivers in an institution, are a different question.

Be careful with the "+20%" figure. It is not law: it comes from a judicial proposal in that litigation that did not become the holding, so do not present it as a guaranteed entitlement.

But do not present its absence as safety either. A labour court may still award a global supplement on the facts of a particular case. This skill states no figure, because there is no percentage that can be quoted in advance; the reliable number is the one in the judgment a particular claim is measured against. Treat a supplement as a real litigation risk to be priced with a labour lawyer, not as a settled entitlement and not as a settled non-entitlement.

Step 4: Add the recurring employer costs

These are real monthly costs on top of the wage:

Do NOT withhold a pension share from the worker. A foreign worker cannot be insured in an Israeli pension fund at all ("בישראל לא ניתן לבטח בביטוח פנסיוני עובדים זרים"), so there is nothing to pass a withheld share on to. The employer instead OWES the worker the amounts it would have contributed, paid at the end of employment (or monthly into a separate account for the worker). Deducting a "pension share" from wages would be an unlawful deduction. See Step 5 for the exact amounts and when they start.

Foreign workers are not covered by the National Health Insurance Law, which is exactly why the employer must buy private medical insurance, and why there is no health-tax deduction.

Step 4a: What you may deduct from the worker's wage, and what you may not

Families get this wrong in both directions: they invent deductions that are not permitted, and they miss ones that are. The heads and caps below are set by the Foreign Workers Law s.1E(b) and the Foreign Workers (Rate of Wage Deductions for Suitable Accommodation) Regulations 5760-2000, with the shekel amounts updated annually by a Population Authority director's circular (חוזר ראש מינהל). Take the current year's figures from that circular, not from this table.

One overall cap governs the whole discretionary list: total deductions may not exceed 25% of the wage in any one month, and each requires the worker's written consent, disclosed in the employment contract before work starts.

Correcting an earlier version of this skill: it said housing and utility deductions "generally do not apply" in the patient's own home. That is wrong: the accommodation table has a dedicated employer-owned column at half rate and the utilities line is written for exactly this worker. The amounts are small, regional and capped, but they apply. See references/domain-checklist.md.

Two rules that bite:

• A deduction not taken cannot be taken retroactively. If you did not deduct accommodation, utilities, medical insurance or board in the month, you cannot recover it later.
• Over-deducting is a criminal offence, not a civil dispute. Check the current circular amount before deducting, and put the agreed deductions in the written contract.

Step 5: Handle the deposit fund correctly (the big misconception)

The standard foreign-worker arrangement is a monthly deposit of 12.5% of wages (6% in lieu of severance + 6.5% in lieu of pension contributions) into a central government-managed fund.

The exemption is narrower than "private households are exempt". It is the INTERSECTION of two conditions: the worker is in the nursing sector AND is employed by an individual otherwise than in the course of that individual's business or occupation. A care company employing the same worker still deposits. Where the patient and a company employ the worker in parallel, each side carries its share pro rata to the portion of the post it holds.

What the home employer owes instead, and from when. Because a foreign worker cannot be insured in an Israeli pension fund, the employer does not "contribute" anywhere: it owes the worker a sum at the end of employment, and the amount depends on how the employment ended.

Three consequences families miss:

• The 6.5% leg starts in month 7, not month 1. Reserving it from the first month over-reserves by six months' worth. The severance leg does start in month 1.
• A dismissal shortly before the first anniversary does NOT reliably avoid severance. The Severance Pay Law 5723-1963, under the heading "when dismissal does not prejudice rights", presumes that a dismissal "close to the end of the first year of employment" was made in order to avoid severance, and unless the employer proves otherwise the worker keeps the full entitlement. So a dismissal at month 10 or 11 should be reserved on the SECOND row of the table, not the first. Never advise a family that ending the employment before twelve months caps the exposure at 12.5%.
• 8.33% is one twelfth, so a severance reserve of wage / 12 is the right magnitude. Because severance is computed on the LAST (usually higher) salary, top the reserve up after any raise.
• The money may be paid monthly into a separate account in the worker's name, or held and paid at the end. Either way it is the worker's, so set it aside rather than treating it as headroom.

Step 6: Add leave entitlements

Recuperation pay (havraa) becomes PAYABLE only after the worker completes 12 full months, but it is then paid retroactively from the first day of work, so the liability ACCRUES from month one. Reserve it monthly and pay it at the anniversary. Treating it as a zero-cost item in year one is the single most common under-reserving error: five days at the current tariff all fall due in one month. The private-sector tariff is 451.50 NIS per day for havraa-year 2026 (1.7.2025 to 30.6.2026). This was updated on 18.08.2026, retroactively. An employer who already paid this havraa year at the previous 418 NIS tariff owes the differential up to 451.50. Check the tariff before quoting: it is reset annually and the update can land mid-year and reach backwards. Days are paid by seniority:

"Seniority" below means COMPLETED years. There is no entitlement at all during the first 12 months; the 5-day row is the first year of entitlement, after 12 months are complete.

Annual leave accrues by seniority. For a 6-day work week (typical for a live-in caregiver), quote BOTH columns. The gross figure includes the weekly rest day; the NET figure is how many days the worker is actually absent, and it is the one that answers "how many days off does she get" and the one leave redemption is computed on:

Holidays by country of origin. This is the "medinat hamotza" angle: a foreign caregiver is entitled to pay for 9 holidays a year, and may choose their own religion's holidays instead of the Israeli ones. The choice is made once and stays fixed for the whole employment, so settle it at the start. Three rules that change what the 9 days actually cost:

• A holiday is a 25-hour period, like the weekly rest, not a calendar day.
• Work on a holiday is paid at 150% on top of the full monthly wage. Kol Zchut puts this at the same 439.73 NIS per day worked for a minimum-wage worker as for a worked rest day.
• A holiday that falls on the weekly rest day carries no separate payment. Some of the 9 will, so do not budget all nine as extra cost automatically.

Bereavement leave is a separate entitlement of up to 7 days, taken according to the custom of the worker's own community.

Step 7: Offset with the Bituach Leumi long-term-care benefit

The relative's nursing (long-term-care) benefit reduces the family's out-of-pocket cost. It is paid in 6 levels. Bituach Leumi publishes two columns, and they are not the same: the maximum cash benefit differs between an employer of a FOREIGN caregiver and an employer of an Israeli caregiver from level 3 upward. Use the foreign column for this skill.

All amounts as of 01.04.2026. Watch the collision: 6,448 NIS is level 6 in the foreign column and level 5 in the Israeli one. An agent that reads a Bituach Leumi page without noticing which column it is in will be one level out, which is roughly a thousand shekels a month.

A recipient may employ a foreign caregiver directly (taking the benefit as cash) or through a care company. When estimating net cost, subtract the level's benefit from the gross monthly cost.

Step 8: Your ongoing legal obligations as the employer

Beyond paying correctly, the family carries employer duties. A "legal employment" answer is incomplete without these:

• Register as an employer with Bituach Leumi within two weeks of the day employment starts. Knowing the 3.6% rate is not enough; the household must register and report and pay National Insurance on the household-employer track (maasik oved bemeshek bayit), on the Bituach Leumi schedule, not as monthly PAYE.
• Written employment contract in a language the worker understands, given at the start, stating wage, hours, deductions, leave, and living arrangements.
• Monthly payslip (tlush sachar). A wage slip must be issued every month.
• Sick days (dmei machala). The worker accrues 1.5 sick days per month (up to 90). The first day of illness is unpaid, the second and third days are paid at 50%, and from the fourth day the full wage is paid. This is a real obligation and a cost when the worker is ill.
• Deductions have their own table and their own criminal exposure. See Step 4a. Over-deducting is an offence, and a deduction you did not take cannot be taken later.
• Housing does not end with the job. Foreign Workers Law s.1E(a) requires the employer to provide suitable accommodation at its own expense for the whole employment and for at least seven days after it ends (or the days left on the permit, if fewer).
• Termination and the patient's death. On ending employment the worker is owed severance, notice (or pay in lieu, up to one month), and payout of unused annual leave (pidyon chufsha), plus a final payslip. Leave redemption reaches back over the last part-year plus up to three preceding years, not the whole employment history. If the patient passes away, the Severance Pay Law provision headed "an employer who died" treats the worker as dismissed, so severance is owed, and the bureau relocates the worker. Warn the family about the money mechanics: these sums come out of the deceased's estate, and if no one else is authorised on the bank account it is frozen until a probate or inheritance order, which takes weeks. Keep the reserve somewhere that stays reachable.
• Income tax. At minimum-wage level the caregiver is generally below the income-tax threshold, so usually no income tax is withheld and no tax-deduction file is opened; National Insurance is the main statutory deduction. Confirm if the wage is well above minimum.

Step 9: Produce the monthly cost estimate

Build the figure from components rather than quoting a single bundled percentage (no authoritative source sums them into one rate, and the timing differs):

gross wage              = max(minimum wage, agreed wage)
national insurance      = 3.6%   x gross wage         (employer, monthly, NOT deductible from the worker)
in-lieu-of-pension      = 6.5%   x gross wage         (owed to the worker, ACCRUES FROM MONTH 7)
severance reserve       = 8.33%  x gross wage         (= wage/12, accrues from month 1, conditional on the exit route)
havraa (monthly equiv.) = 451.50 x havraa_days / 12   (ACCRUES from month 1; PAYABLE after 12 full
                                                       months, retroactively to day one. Check the tariff)
medical insurance       = insurer premium             (minus the permitted deduction, up to half the premium
                                                       and not more than the current annual cap)
---------------------------------------------------------------
gross monthly cost      = sum of the above
net monthly cost        = gross monthly cost - nursing benefit for the recipient's level

State assumptions explicitly (seniority year, care level, whether the first year is complete) and label any number the user has not given you as an estimate.

Examples

Example 1: First-year cost estimate

User says: "My mother is 87 and just got a foreign caregiver. She is at care level 5. What does it cost me a month?"

Actions:

1. Wage: assume minimum wage 6,443.85 NIS (ask if they pay more).
2. National Insurance: 3.6% = about 232 a month.
3. In lieu of pension: 6.5% = about 419 a month, but only from the seventh month.
4. Severance reserve: 8.33% = about 537 a month, accruing from month 1, payable only on a severance-triggering exit.
5. Havraa: accrue 451.50 x 5 / 12 = about 188 a month from month 1. Nothing is PAID until 12 full months are complete, and it is then paid retroactively from the first day, so the money must already be set aside.
6. Medical insurance: ask for the insurer quote; up to half the premium may be deducted, within the current annual cap.
7. Subtract the foreign-caregiver level-5 benefit, 5,456 NIS, from the gross monthly cost to get net out-of-pocket. Do not use 6,448, which is the level-5 figure in the ISRAELI-caregiver column.

Result: an itemized estimate with each component labeled, the six-month pension delay stated, and the reminder that the in-lieu-of-pension and severance amounts are accrued for termination rather than paid monthly.

Example 2: Choosing the holiday list

User: "Our caregiver is from the Philippines. Which holidays does she get?"

Actions: she is entitled to pay for 9 holidays a year and may choose her own religion's holidays instead of the Israeli ones. The list is fixed once chosen, so agree the 9 days in writing at the start. Result: a lawful holiday list settled up front, avoiding a dispute later.

Bundled Resources

Scripts

• scripts/calc_caregiver_cost.py -- optional helper that itemizes the monthly employer cost from wage, completed years, month of employment, care level and an insurance premium. It applies the month-7 start for the in-lieu-of-pension leg, accrues havraa from month one while labelling it not-yet-payable, applies the accommodation (--region) and utilities (--utilities) deductions against the 25% cap, and refuses to compute on a zero, negative or implausible wage, or on a month and seniority that contradict each other. Every constant it uses is also stated in prose above, so an agent without a shell can reproduce it by hand. Run: python scripts/calc_caregiver_cost.py --help

References

• references/employment-process.md -- the permit, eligibility groups, and bureau steps in detail.
• references/pay-and-cost-components.md -- every rate, the full leave tables, and the benefit levels with sources.

Gotchas

• The home employer does NOT pay into the deposit fund. Agents routinely assume the monthly 12.5% deposit applies to everyone. For a caregiver employed in the patient's own home it does not; the family pays the worker directly at termination. Stating it the wrong way creates a phantom monthly payment.
• Do not reserve only 6% for severance. The 6% inside the fund's 12.5% discharges severance only inside a formal pension-fund arrangement. A home employer paying directly owes full statutory severance, one month per year (about one twelfth of wage), so reserve pension 6.5% plus that full severance accrual, not 6%. Reserving 12.5% under-funds the eventual payout.
• No hourly overtime for live-in caregivers, and no statutory "+20%". Do not compute time-and-a-half on a daily clock, and do not add a 20% live-in supplement as if it were law. It is a judicial proposal that did not become the holding. A labour court may still award a global supplement on the facts of a particular case, so its absence is not guaranteed either, but there is no percentage you can quote in advance.
• Havraa is not free in year one. It becomes payable only after 12 full months, but it is then paid retroactively from the first day of work. Accrue it from month one and pay it at the anniversary. Reserving nothing for it is the error, not reserving it.
• Use the 3.6% National Insurance rate, not 2%, and apply it to the full wage. The rate rose in January 2025 and the 5,500 NIS ceiling was abolished in 2022. And it is entirely the employer's: deducting any part of it from a nursing caregiver's wage is prohibited.
• Never withhold a pension share from the worker. A foreign worker cannot be insured in an Israeli pension fund, so there is no fund to remit it to. The employer OWES the amount at the end of employment; withholding it from wages is an unlawful deduction, and unlawful deduction is a criminal offence rather than a civil dispute.
• Housing and utility deductions DO apply to a live-in caregiver in the patient's own home. An earlier version of this skill said they generally do not. They do, at the reduced employer-owned-housing rate, plus a utilities line written specifically for this worker. See Step 4a, and note the 25% overall cap and that an un-taken deduction cannot be taken later.
• Check the havraa tariff every time. It resets annually and the update can be published mid-year with retroactive effect: the 2026 tariff moved from 418 to 451.50 NIS on 18.08.2026, reaching back to 1.7.2025, with a duty to pay differentials on havraa already paid.
• Read the right benefit column. Bituach Leumi publishes separate maximum amounts for employing a foreign versus an Israeli caregiver, diverging from level 3, and 6,448 NIS appears in both at different levels.
• Vacation and holiday days are entitlements, not automatic monthly cash. They become a cash cost mainly when paid out (unused leave on termination, or a holiday worked). Do not double-count them as a flat monthly line unless the user asks for accrued value.

Reference Links

Troubleshooting

Error: "The cost looks too high / too low"

Cause: A component was applied wrong. The usual suspects: havraa treated as zero in year one, the 6.5% in-lieu-of-pension charged from month 1 instead of month 7, a 20% supplement, the deposit fund, a stale havraa tariff, or the Israeli-caregiver benefit column. Solution: Re-check Steps 4 to 7. havraa accrues from month 1 and is paid at 12 months retroactively to day one, at 451.50 for havraa-year 2026; the 6.5% starts in month 7; there is no statutory +20%; a private household in the nursing sector does not deposit; and the level-5 foreign-caregiver benefit is 5,456, not 6,448.

Error: "Which minimum wage figure is current?"

Cause: Minimum wage updates on a set date and stale figures circulate. Solution: Use 6,443.85 NIS/month (35.40 NIS/hour) from 01.04.2026, and confirm against the Kol Zchut minimum-wage page before quoting for back-pay.

Error: "Is this for a caregiver from a care company too?"

Cause: The obligations differ when the company is the employer. Solution: This skill covers the private home employer. If a care company employs the worker, the company carries the deposit and payroll duties instead.