Introduction to your payslip: how to read it correctly

A payslip is a document that an employer is required by law — under Hok Haganat HaSakhar (חוק הגנת השכר; Wage Protection Law) — to give an employee every month. Its purpose is to show, fully and transparently, everything related to your salary: how much you earned before deductions, what was deducted, which contributions were made for your future, and how much was deposited into your account after deductions.

Although the law does not prescribe one uniform layout, every payslip must include certain core components. Therefore, even when payslips look different from one workplace to another, the principles remain the same.

Most people look only at the bottom line — the net salary. In practice, however, a payslip contains a great deal of important information that can affect you financially. Understanding it thoroughly will allow you to:

• Check accuracy: Make sure you received exactly the salary and additions that were agreed with you.
• Manage tax wisely: Understand how much tax you pay and check whether you qualify for reductions through tax credit points.
• Protect your pensionA monthly payment made to a person after retirement from work in order to help maintain their standard of living.: Make sure contributions to your pension and Keren HishtalmutA medium-term savings product (six years) that benefits from a tax exemption on investment gains up to the applicable contribution limit. (קרן השתלמות; study fund) are made as required by law and in the correct amounts.
• Exercise your rights: Track vacation days, sick days, and recuperation pay.

The bottom line: When you understand your payslip, you have better control over your money.

A payslip is usually made up of several recurring main sections:

1. Personal details: Information about you and your employer.
2. Payments (gross salary): Base salary, overtime, and various additions.
3. Mandatory deductions: Income tax, Bituach Leumi (ביטוח לאומי; National InsuranceA contract under which an insurance company undertakes to compensate the insured in the event of damage in exchange for a periodic payment.), and health insurance.
4. Social contributions: The employee's and employer's portions for pension and savings.
5. Balances: Accrued vacation and sick days.
6. The bottom line: The net salary payable.

Employer and employee details

The top of the payslip shows the employer's details, such as the company name and company or authorized-dealer number. Immediately below are your details, which are very important to keep up to date:

• Name and ID number.
• Marital status: Directly affects your tax credit points and the income tax you pay.
• Residency: Important for tax purposes; for example, residents of frontier communities are entitled to tax reductions.

In addition to personal details, the payslip shows technical information that determines how your salary is calculated:

• Pay basis: Whether you are paid a monthly "global" salary, by the hour, or by the day.
• Position scope: Your employment percentage, such as 100% or 50%, and the hours actually worked.
• Seniority: The number of years you have worked at the workplace, which affects vacation days and recuperation pay.
• Bank account details: Make sure this is the account into which you want your salary deposited.