Invoice as an Employee

Invoice as an Employee – The Easiest Way for Freelancers to Get Paid Legally

For many freelancers, side-giggers, and professionals in Israel, the first big question is: “Do I need to open a business in order to get paid?” The reality is that opening a formal business (עוסק פטור / עוסק מורשה) involves bureaucracy, tax reporting, bookkeeping, and significant expenses on accounting services. For someone who is just starting out, working on small projects, or earning extra income, it often doesn’t make sense.

That’s where NETO comes in with its “Invoice as an Employee” service – a simple, legal, and digital way for freelancers to issue invoices to their clients and receive full payslips with all social benefits, without opening a business file.

As a licensed employment contractor in Israel (Labor Contractor License No. 1565), NETO provides a unique solution recognized by the Tax Authority, National Insurance, and pension funds. It gives freelancers the best of both worlds: the freedom of self-employment with the security of being treated as an employee.

Who Is This Service For?

•  Freelancers just starting out – people testing the waters before committing to opening a business.
• Employees with extra income – salaried workers who also teach, consult, or take on side projects.
• Independent professionals – designers, developers, translators, lecturers, consultants, coaches.
• New immigrants – who are unsure of their long-term earning potential.
• U.S. citizens living in Israel – who can save up to 15% in Social Security contributions compared to registering as self-employed.

How It Works – Step by Step

1. Register online – fill out a quick digital form and a standard employee “101” document.
2. Create a job order – enter the client’s details, the type of work, and the payment amount.
3. Get a net salary simulation – instantly see how much you’ll actually take home after taxes, National Insurance, and pension.
4. Invoice is issued – NETO sends a legal tax invoice to your client.
5. Client pays NETO – payments are deposited into NETO’s account.
6. You receive your salary – NETO transfers the payment to your bank account along with a legal payslip.

The entire process can be completed in just a few minutes, and everything is managed online.

Advantages of Invoice as an Employee

• No business registration required – work legally without opening a VAT or Tax Authority file.
•  Full social benefits – including pension, National Insurance, vacation, and holiday pay.
• Completely legal – recognized by all authorities thanks to NETO’s Labor Contractor License.
• One-off or ongoing work – suitable for a single invoice or for regular freelance projects.
• Tax optimization – everything is deducted at source, eliminating the need for annual filings.
• Security – your money is protected by state-required guarantees against salary defaults.
•  International flexibility – issue invoices for clients abroad while still receiving Israeli payslips.

Real-Life Scenarios

•  A graphic designer who completes two or three small projects a month and doesn’t want to hire an accountant yet.
• A software engineer working full-time who provides occasional consulting to startups.
•  An English teacher giving private lessons in the evenings while working a day job.
• A new immigrant who translates documents for local clients without having to set up a business right away.
• A U.S. citizen living in Israel who saves 15% by working as an employee rather than paying U.S. self-employment tax.

When This Service May Not Be Suitable

•  Freelancers with consistent high income who already benefit from business deductions.
• Business owners who employ staff or manage inventory.
•  Professionals with large ongoing expenses (over 30% of gross income) who may need VAT credits.

In these cases, opening a business file may make more sense financially.