Accountant for Self-Employed in Israel: What You Need Each Year (2026)

What a self-employed accountant does for you during the year

Much more than the annual return. Most of the money is won or lost in the monthly routine:

• Bookkeeping: recording income and expenses and separating business costs from private ones.
• VAT: an osek murshe (licensed dealer) charges and pays VAT at 18% (since 1.1.2025), reporting by the 15th of the month after each period. An osek patur (exempt dealer) files one annual turnover declaration by 31 January.
• Advance tax payments (mikdamot): regular payments on account of your yearly income tax. Too low means a lump-sum bill later; too high hurts cash flow.
• Bituach Leumi: monthly advances based on expected income.
• Annual return (form 1301): self-employed people must file online.
• Pension and study fund (keren hishtalmut): mandatory pension deposits plus the deductions and credits they earn you.
• Capital declaration (hatzharat hon): if the tax office asks, you have 120 days to list your assets and liabilities worldwide.

National Insurance in 2026: 7.70% up to ₪7,703 a month, 18% above

Once classed as self-employed, you pay at least on a minimum income of ₪3,442 a month, even if you earn less.

Pension and study fund: the biggest tax saving most freelancers miss

Since 2017, self-employed people aged 21–60 who have been registered for VAT at least six months must deposit to a pension fund by 31 December. For tax year 2026 the mandatory rate is 4.45% on income up to ₪82,614 a year and 12.55% on the part up to ₪165,228. Deposits also earn a deduction of up to 11% of income (maximum ₪25,608) and a 35% credit on deposits of up to 5.5% of income. A study fund gives a deduction of 4.5% of taxable income up to ₪293,397, a recognised deposit of up to ₪13,203, and a capital-gains exemption on deposits up to ₪20,566 a year. Every November I run these numbers with clients before the year closes.

Freelancing for clients abroad

If you invoice companies in the US or Europe, you still report everything in Israel. Common questions: which exchange rate to use, whether services to a foreign client qualify for special VAT treatment, and how to report money received in a foreign bank or payment platform. The answers depend on your contracts, so I review them one by one. Olim and returning residents may have special rules worth checking.

The "small business owner" track (30% flat expenses)

Since tax year 2025, if your turnover is up to ₪122,833 (2026) you can choose a track that deducts a flat 30% of turnover as expenses instead of your actual costs. It usually also exempts you from a full return, advances and the capital declaration. It pays off only when real expenses are below 30%, you cannot switch in and out yearly, and you still keep books and report VAT.

How working with me runs

1. 1
   Free first call

   We go over your business and expected income, in English.
2. 2
   File check

   I review your status, advances and pension, and fix what is needed.
3. 3
   Monthly routine

   You send receipts digitally; I handle the books and the VAT and income-tax reports.
4. 4
   Year-end planning

   In November–December we decide on pension and study-fund deposits.
5. 5
   Annual return

   I prepare and file it, and explain the result.