Who handles payroll and tax when your employer is abroad?
When you work in Israel for a foreign employer that has no Israeli entity, you face a compliance challenge: who runs your payroll, deducts your taxes, pays your ביטוח לאומי (Bituach Leumi), and ensures your pension contributions land in the right places? Your foreign employer can't do it - they don't have an Israeli payroll system. You could do it yourself as an Osek Patur or עוסק מורשה (Osek Murshe) - or you can outsource the whole thing to an Atzmai Sachir company.
What an Atzmai Sachir Company Does
"Atzmai Sachir" literally means "self-employed employee" - a contradiction in terms that captures exactly what the service provides. These companies act as your employer on paper in Israel, while you continue to work for your actual employer abroad.
The service flow works like this:
- Your foreign employer pays the Atzmai Sachir company for your services (usually in USD or EUR, converted to NIS).
- The Atzmai Sachir company issues the VAT invoice to your employer on your behalf.
- They calculate and deduct Israeli income tax, Bituach Leumi (employer and employee shares), health levy, pension contributions, and Keren Hishtalmut.
- They remit everything to the relevant authorities and savings funds.
- You receive a monthly payslip showing all deductions, and your net salary lands in your Israeli bank account - just like a regular employee.
The result: you get a proper Israeli payslip, your קרן השתלמות (Keren Hishtalmut) and pension accumulate, you have Bituach Leumi coverage, and you have zero compliance administration to worry about.
What It Costs
Atzmai Sachir companies typically charge 3-5% of your gross invoice as a service fee. On a monthly gross of 30,000 NIS, that's 900-1,500 NIS per month - roughly equivalent to hiring a bookkeeper plus accountant separately, but with significantly less personal time investment.
Some companies charge a flat monthly fee instead of a percentage. For higher earners, the flat fee can be more economical. Get quotes from two or three providers before committing - the market is competitive.
What You Still Need to Handle
Using an Atzmai Sachir service simplifies your life significantly, but doesn't eliminate all obligations:
- Annual income tax return: If your total annual income triggers a mandatory filing requirement, you still need to file a Doch Shenati. The Atzmai Sachir company will provide you with the tax documents you need.
- Foreign income reporting: If you also have foreign income (investments, rental abroad, etc.), that remains your responsibility to report.
- Your savings accounts: You choose your pension fund and Keren Hishtalmut provider - the Atzmai Sachir company sends contributions to wherever you direct them.
Atzmai Sachir vs Self-Registered: Which Is Better?
Use an Atzmai Sachir service if:
- You have one or two foreign employers paying you
- You prefer zero compliance administration
- You value having a proper payslip and employee-style documentation
- Your income is high enough that the 3-5% fee is worth the peace of mind
Register as Osek Murshe directly if:
- You have multiple clients and issue many invoices per month
- You have significant business expenses to reclaim VAT on
- You're comfortable managing quarterly filings or have a good bookkeeper
- You prefer maximum control and lower ongoing costs at higher income levels
An Atzmai Sachir ("self-employed employee") billing company acts as your Israeli employer on paper while you keep working for a foreign employer that has no Israeli entity. For a service fee of typically 3-5% of your gross invoice (the wider olim range is 3-7%), it issues the VAT invoice to your employer, deducts Israeli income tax, Bituach Leumi (employer and employee shares), the health levy, pension, and Keren Hishtalmut, remits everything to the authorities and savings funds, and pays your net salary into your Israeli bank account with a monthly payslip. The result is a proper Israeli payslip (useful for mortgages and daycare subsidies) and zero compliance administration. It is Israel's equivalent of a US PEO/EOR (Gusto, Rippling, Deel) or a UK umbrella company. You still must file an annual return (Doch Shenati) if required, report any separate foreign income yourself, and choose your own pension and Keren Hishtalmut providers. Some olim transition to registering as Osek Murshe themselves after their first year, once the convenience no longer justifies the cost.
"Atzmai Sachir" literally means "self-employed employee," a contradiction in terms that captures what the service provides. These companies act as your employer on paper in Israel while you continue to work for your actual employer abroad. Your foreign employer pays the Atzmai Sachir company for your services (usually in USD or EUR, converted to NIS), and the company issues the VAT invoice on your behalf, calculates and deducts Israeli income tax, Bituach Leumi (employer and employee shares), the health levy, pension contributions, and Keren Hishtalmut, then remits everything to the relevant authorities and savings funds. You receive a monthly payslip showing all deductions, and your net salary lands in your Israeli bank account just like a regular employee.
Atzmai Sachir companies typically charge 3-5% of your gross invoice as a service fee (the broader range cited for olim is 3-7%). On a monthly gross of 30,000 NIS, a percentage fee works out to 900-1,500 NIS per month, roughly equivalent to hiring a bookkeeper plus an accountant separately, but with significantly less personal time investment. Some companies charge a flat monthly fee instead of a percentage, which can be more economical for higher earners. Because the market is competitive, it is worth getting quotes from two or three providers before committing.
The main draw is convenience: a billing company gives you zero compliance administration while still producing a proper Israeli payslip, accumulating your Keren Hishtalmut and pension, and maintaining Bituach Leumi coverage. The article suggests using an Atzmai Sachir service if you have one or two foreign employers paying you, you prefer zero compliance administration, you value employee-style documentation, and your income is high enough that the 3-5% fee is worth the peace of mind. It suggests registering as Osek Murshe directly instead if you have multiple clients and issue many invoices per month, you have significant business expenses to reclaim VAT on, you are comfortable managing quarterly filings or have a good bookkeeper, and you prefer maximum control and lower ongoing costs at higher income levels.
Using a billing company gives you a proper Israeli payslip, which is required for mortgage applications, daycare subsidies, and other official processes. Working directly for a foreign employer with no Israeli entity normally leaves you without that employee-style documentation, so the payslip is one of the main practical benefits of the Atzmai Sachir model alongside accumulating pension and Keren Hishtalmut and maintaining Bituach Leumi coverage.
Using an Atzmai Sachir service simplifies your life significantly but does not eliminate all obligations. If your total annual income triggers a mandatory filing requirement, you still need to file an annual income tax return (Doch Shenati); the Atzmai Sachir company will provide the tax documents you need. Any separate foreign income, such as investments or rental property abroad, remains your responsibility to report. And you choose your own pension fund and Keren Hishtalmut provider, with the company sending contributions wherever you direct them.
It is closely comparable. In the US, it is similar to using a Professional Employer Organization (PEO) or Employer of Record (EOR) service, such as Gusto, Rippling, or Deel, which run compliant payroll in countries where the actual employer lacks an entity. In the UK, umbrella companies serve a very similar function by employing contractors and freelancers working for end clients and handling PAYE and NI on their behalf, with a fee structure (3-5% of gross) comparable to UK umbrella margins. More broadly, Israel's Atzmai Sachir companies predate the global EOR trend but serve the same function, so if you know EOR services from your home country the model will be immediately recognizable.
It depends on whether the convenience continues to justify the cost once you are established. The article notes that some olim transition to Osek Murshe after their first year. Registering directly tends to make more sense if you have multiple clients and issue many invoices per month, you have significant business expenses for which you want to reclaim VAT, you are comfortable with quarterly filings or have a good bookkeeper, and you want maximum control and lower ongoing costs at higher income levels. If instead you have just one or two foreign employers and prefer to outsource all compliance, sticking with the Atzmai Sachir service can remain worthwhile.
