Becoming self-employed in Israel: the compulsory insurance

Becoming self-employed (atsmai) in Israel brings two legal obligations from day one: registering with Bitouah Leoumi (National Insurance) and paying into public health insurance. Since 2017, a third obligation has been added: a minimum pension contribution. Everything else, including the protection of your income in case of time off work, is left to you and your own initiative.

For a French person or a francophone settling in Israel, the distinction between what is required by law and what is a personal choice is not always intuitive. The Israeli system starts from a simple principle: it protects the self-employed against the big collective risks (old age, basic illness, severe disability), but it does not protect them against the loss of income in daily life, unlike an employee covered by their employer. Here is what you need to know before, or just after, opening your file.

Self-employed status in Israel, in a few words

In Israel, a self-employed person registers under one of two statuses with the tax authority (Rashut Hamissim) and Bitouah Leoumi: osek patur (exempt from collecting VAT, reserved for small turnovers) or osek murshe (subject to VAT, with no income ceiling). In both cases, registration with Bitouah Leoumi is compulsory, and it is what triggers most of your social cover. The choice between the two statuses depends on your activity and your expected turnover: it is better to discuss it with an accountant before you start, because it determines your tax position as much as your social cover.

The legal obligations of a self-employed person in Israel

Bitouah Leoumi, the basis of your social protection

Bitouah Leoumi is the body that centralises the social contributions of all Israeli residents over 18, employees and self-employed alike. For a self-employed person, these contributions give entitlement, under the same medical conditions as for an employee, to general disability insurance, work accident insurance and, eventually, the basic old-age pension. According to the 2025 scale, a self-employed person pays about 7.7% of their monthly accounting profit up to 7,522 NIS, then 18% on the slice of income above that threshold, up to a contribution ceiling. These rates are revised every year: always check the scale in force before calculating your advance payments.

Basic health insurance, the same for everyone

Every Israeli resident, self-employed or employee, pays into national health insurance and benefits from the public basket of care (Sal Briout, the national health basket) through the health fund (kupat holim) of their choice. This cover gives access to consultations, hospital stays and essential medicines on the same terms for everyone. It does not, however, cover extra charges, routine dental care or, as we come back to below, a loss of income during time off work.

The pension contribution, compulsory since 2017

This is the least known point among new francophone self-employed people: since January 2017, paying into a pension fund (keren pensia) is no longer optional for an Israeli self-employed person aged 21 to 55 who has been working for more than six months. According to the 2024 scale, the minimum compulsory rate is about 4.45% of income up to half of the national average salary, then about 12.55% on the slice between that half and the national average salary. Above that, the contribution remains optional. This scale is revised periodically: check the rate in force at the time of your payments. Failure to comply with this obligation may result in a fine. Unlike an employee, the self-employed person receives no employer contribution: every shekel paid into the pension fund comes from their own pocket.

Strongly recommended insurance, though not compulsory

Once these three obligations are met, an Israeli self-employed person remains exposed on several points that the law does not cover, or covers only minimally. In practice, most francophone brokers and accountants settled in Israel recommend looking at least at the following protections, depending on your personal situation and your activity:

None of these protections is required by law. That is precisely what makes it something to watch: nobody will send you a reminder if you have not thought of it, unlike Bitouah Leoumi, which asks for its contributions. In Israel, a self-employed person builds their own social protection on top of the legal base, not the other way round.

Where to start when you begin your activity

If you are just starting out as self-employed in Israel, the logical order is generally as follows: regularise your registration with the tax authority and Bitouah Leoumi, set up your compulsory pension payments from the start rather than catching up at the end of the year, then assess with a professional the additional protections suited to your trade and your family situation. A single freelancer with no family responsibilities does not have the same priorities as a self-employed person with dependent children or a home loan running.

As every situation is different, there is no universal list valid for all self-employed people. For a personalised review of your file, you can contact a broker who can examine with you your status, your income and your real needs before recommending anything.