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Managing Finances and Payments while Working in Israel

Israel is a vibrant country known for its rich history, diverse culture, and thriving economy. If you are planning to work in Israel, it is essential to understand how to manage your finances and payments effectively. This article will guide you through various aspects of financial management in Israel, including banking services, taxation, currency, and payment options.

Banking Services

• Opening a Bank Account: To manage your finances efficiently, it is advisable to open a bank account in Israel. Major banks in Israel include Bank Hapoalim, Bank Leumi, and Israel Discount Bank. You will need to provide necessary identification documents and proof of address to open an account.
• ATMs: Israel has a vast network of ATMs, allowing you to withdraw cash conveniently. Ensure that your bank card is compatible with international withdrawals and check for any associated fees.
• Online Banking: Most Israeli banks offer online banking services, allowing you to manage your accounts, transfer funds, and pay bills conveniently from anywhere.
• Banking Fees: Be aware of the fees associated with your bank account, such as monthly maintenance fees, transaction fees, and currency conversion fees. Compare different banks to find the most suitable option for your needs.

Taxation

• Israeli Tax System: As an employee in Israel, you will be subject to the country’s tax system. Israel follows a progressive tax structure, where higher income brackets are taxed at higher rates. Familiarize yourself with the tax brackets and rates to understand your tax obligations.
• Income Tax Withholding: Your employer will deduct income tax from your salary based on your tax bracket. Ensure that you provide accurate information to your employer to avoid any discrepancies.
• Tax Residency: If you plan to work in Israel for an extended period, you may become a tax resident. This means you will be subject to taxation on your worldwide income. Consult with a tax professional to understand your tax residency status.
• Annual Tax Returns: In Israel, individuals are required to file an annual tax return. Keep track of your income, expenses, and relevant tax documents to ensure accurate reporting.

Currency

• Israeli New Shekel (ILS): The official currency of Israel is the Israeli New Shekel (ILS). Familiarize yourself with the current exchange rates and ensure you have a basic understanding of the currency denominations.
• Foreign Exchange: If you need to exchange foreign currency into ILS, it is advisable to do so at authorized currency exchange offices or banks to ensure fair rates and avoid scams.

Payment Options

• Credit and Debit Cards: Credit and debit cards are widely accepted in Israel, especially in urban areas. Ensure that your cards are compatible with international transactions and notify your bank about your travel plans to avoid any blocks or restrictions.
• Mobile Payments: Mobile payment apps like Apple Pay and Google Pay are gaining popularity in Israel. Check if your mobile payment app is compatible with local merchants and establishments.
• Checks: While checks are less commonly used in Israel, they are still accepted in some instances. Ensure that you have a valid Israeli bank account to issue or receive checks.
• Cash: Cash is widely accepted in Israel, especially for smaller transactions and at local markets. Ensure that you have sufficient cash on hand for situations where cards may not be accepted.

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Managing Finances and Payments while Working in Israel

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References

– Bank Hapoalim: www.bankhapoalim.co.il
– Bank Leumi: www.leumi.co.il
– Israel Discount Bank: www.discountbank.co.il