Employee’s requirements effective Jan 2014

All salaried employees are required to fill out a 101 tax form at the start of employment and need to notify the employer within 10 days, in writing, of any change in the information they supplied on the 101 form. Name change, change in marital status, birth of a child, change of address, etc.

In addition, all employees are required to fill out a new 101 form at the beginning of each tax year. Luckily, in this era of computers, most payroll programs enable pre-printed forms that include all the information as it was entered in the payroll program.

What you need to do

1. Make sure the 101 form is the most recent (12/2013). The date is listed on the lower left-hand side of the form. If the date is any other date, the form is out-dated and no longer valid. Each year the Tax Authority makes changes to the form thereby nullifying any previous versions. Bring this to the attention of the Payroll dept. manager. An updated form can be downloaded/printed for free here: http://taxes.gov.il/IncomeTax/Pages/ToolsPages/IncomeTaxForms.aspx

2. If you were given a pre-printed 101 form, check that all the information is correct. If you find erroneous information or such that needs updating, cross out the incorrect data and write in the correction. If there is any information to add (such as a newborn child), add the necessary data.

3. On all forms, pre-printed or manual, you will need to check the appropriate boxes in section dalet and heh (regarding additional income and type of employment) and (for married employees) whether your spouse has income or not, and do not forget to sign the form. Without your signature, the form is not valid.

4. It is highly recommended to proof read the form prior to submitting it. The form is a signed statement that is the employee’s responsibility. Submitting incorrect information can result in incorrect tax calculation and is a criminal felony for which employees may be prosecuted by the Tax Authority. The Tax Authority does annual cross-checking of information with other Government Offices, such as Social Security (Bituach Leumi), based on employer’s reports.

5. If you are employed with more than one employer, you need to supply both employers with a tax coordination form. These need to be renewed each year. The previous year’s tax coordination forms are valid until 28th of February. Do not wait until the last moment. If you are employed by two employers as a salaried employee you can either fill out a 116 tax form and submit a copy of the last pay slip from each employer, or a CPA or Tax advisor can deal with this for you or under certain conditions you can apply on-line here: http://taxes.gov.il/Pages/InfoTaxesGovIl/IncomeTaxFAQ.aspx

6. Many employers issue the new 101 forms to employees with a notification that includes a deadline, by which time the signed form needs to be returned to HR/Payroll. Please note that filling out the 101 form is a legal requirement, that failure to do so, can result in witholding your payroll!

If you didn’t receive your 101 form, contact your HR/Payroll dept without further delay.