Our manpower licence 1565
What the licence means, why it matters, and how to verify it yourself in the public registry.
Read moreIs it legal to work through an invoice service in Israel?Yes · when the service holds a manpower contractor licence. Here is exactly why
Getting paid through an "invoice service" (cheshbonit lashachir) is lawful in Israel · provided the company doing it is a licensed manpower contractor. The licence is the whole story: it is what the law requires, it is publicly verifiable, and it is what protects your rights. This page explains the legal basis, your rights, the risks to watch, and how to check any provider.
Work through a licensed provider
Operating since 2016
General information, not legal advice. This page explains how the model works and what the law requires of a provider. For your specific circumstances, consult a lawyer or accountant. The binding wording is in the statute and official sources linked below.
AI summary · is an invoice service legal in Israel?Click to read the page summary
Yes · working through an invoice service in Israel is lawful when the company is a licensed manpower contractor. Under the Employment of Employees by Manpower Contractors Law (1996), no one may operate as a manpower contractor without a licence from the Ministry of Labor · and a licensed contractor must lodge bank guarantees against workers' wages. In this model the company employs you as a salaried worker, issues the tax invoice to your client in its own name, and pays you a salary with a payslip, so you are registered with Income Tax, National Insurance and VAT. The single most important thing to verify in any provider is that licence. NETO holds Manpower Contractor Licence no. 1565, verifiable in the public government registry.
- The law requires a licence to operate as a manpower contractor.
- Bank guarantees are lodged against workers' wages · your protection.
- You are a salaried employee · payslip, tax and National Insurance handled.
- Verify the licence · NETO is no. 1565 in the public registry.
This summary is based on the content of this page
Is it legal to work through an invoice service company in Israel?
Yes · provided the company is a licensed manpower contractor. Israeli law (the Employment of Employees by Manpower Contractors Law, 1996) states that no one may operate as a manpower contractor without a licence from the Minister, and that a licensed contractor must deposit bank guarantees against workers' wages. A provider that meets those requirements employs you as a salaried worker, issues the invoice to your client, and registers you with Income Tax, National Insurance and VAT. The legality turns on one thing · the licence. NETO holds licence no. 1565 and it can be verified in the public registry.
What an invoice service is, and how it works
An invoice service · in Hebrew cheshbonit lashachir, an "employee invoice" · lets you get paid for work without opening an Osek file. The company employs you as a salaried worker for the engagement, issues the tax invoice to your client in its own name, collects the payment, and pays it to you as a salary with a payslip. Because it is your legal employer, it withholds tax, reports to National Insurance, and handles VAT.
The reason this is not simply "billing on someone else's behalf" · which would raise fictitious-invoice concerns · is the employment relationship and the licence behind it. A licensed manpower contractor is a recognised, regulated employer, not a pass-through.
The legal basis · why the licence is the whole story
The model's legality rests on primary legislation · the Employment of Employees by Manpower Contractors Law, 1996 · not on any single case. Four points matter:
- A licence is mandatory (s. 2(a)): "a person shall not operate as a manpower contractor unless he holds a licence for that purpose from the Minister." Operating without one is an offence.
- Bank guarantees: a licensed contractor must lodge a bank guarantee against workers' wages · the concrete protection standing behind your pay.
- The client shares the duty (s. 10b): a business that engages a contractor without a licence itself commits an offence · so a legitimate provider protects your client too.
- Public verification: every valid licence appears in the Ministry of Labor's online contractors registry · anyone can check it at any time.
Bottom line: the question "is it legal?" is really the question "is the provider licensed?". With a licensed manpower contractor, the model sits on statute and on a guarantee you can verify · not on interpretation. More on Licence 1565 and how to check it.
Your rights under this model
Because you are employed as a salaried worker · not billing as an unregistered individual · the provider handles your statutory registration and reporting:
A payslip
You receive a lawful payslip for each payment, with the deductions the law requires.
National Insurance
You are reported and paid for as an employee · not left outside the system.
Pension provisions
Pension and severance provisions are calculated as for any employee, per the engagement.
Individual assessment
Eligibility for any specific benefit is assessed individually by the National Insurance Institute.
NETO states what it does · employs you lawfully, issues a payslip, deducts and reports as required · and never promises a particular benefit outcome. Entitlement to any specific right is determined individually by the National Insurance Institute.
Who this service is right for
Freelancers and occasional earners who want to invoice lawfully without becoming self-employed: designers, consultants, developers, tutors, therapists, sales agents, and people earning on the side of a salaried job. If you invoice steadily at scale, opening an Osek may suit you better · the honest comparison is on our invoice-without-a-business guide.
Risks · and how to choose a provider
The model is lawful, but not every provider is. This is where to look:
- Check the licence first. No manpower contractor licence · no lawful basis. Ask for the number and verify it in the government registry yourself.
- Confirm you are actually employed. A service that only issues an invoice, without registering you with National Insurance and giving you a payslip, leaves your rights exposed.
- Look for the bank guarantee. A licensed contractor lodges guarantees against wages · it is a legal requirement, and your safety net.
- Beware absolute promises. No honest provider can guarantee a particular National Insurance outcome · entitlement is assessed individually.
Tax considerations
Because you are paid as a salary, tax is withheld at source and reported by the provider · you do not file self-employed returns for this income. If you also hold a salaried job, the combined income affects your marginal rate; it is worth reading about tax on a second income in Israel and, where relevant, arranging tax coordination. Your client receives a proper tax invoice and can deduct input VAT as usual.
Watch · how you get paid through NETO
Two minutes that show exactly what happens from signup to payslip · before you commit to anything.
Questions and answers
Is it legal to work through an invoice service company in Israel?
Yes, when the company is a licensed manpower contractor. Israeli law requires a licence to operate as one, and a licensed contractor lodges bank guarantees against wages and employs you as a salaried worker with a payslip. Verify the licence before you start.
What employee rights do I get through an invoice service?
You are employed as a salaried worker, so you receive a payslip, and National Insurance, pension and severance provisions are calculated and reported per the engagement. Entitlement to any specific benefit is assessed individually by the National Insurance Institute.
How much does the invoice service cost?
NETO's fee is 5% of the invoice, before VAT · derived from the amount your client pays. No subscription, no minimum, no commitment.
Am I exempt from tax when working this way?
No. You are not exempt · you are paid as a salary with tax withheld at source and reported. What changes is that you avoid self-employed filing for this income, because the provider handles it.
How do I verify a provider is legitimate?
Ask for the manpower contractor licence number and look it up in the Ministry of Labor's public registry. NETO is no. 1565 (Bareket I.T Ltd, company no. 515486058) · check it here.
What's the difference versus opening my own business?
Opening an Osek makes you self-employed, with your own registration, bookkeeping and returns. Through a licensed invoice service you stay a salaried employee for the engagement and the provider carries the paperwork. The full comparison is on the invoice-without-a-business guide.
Summary
- Working through an invoice service is lawful when the provider is a licensed manpower contractor · this rests on the 1996 statute, not on interpretation.
- The licence requires bank guarantees against wages and is publicly verifiable · your concrete protection.
- You are a salaried employee with a payslip; entitlement to any specific benefit is assessed individually.
- Before choosing any provider · verify the licence. NETO is no. 1565. Talk to us with any question.
Work with a licensed, verifiable provider
NETO holds Manpower Contractor Licence 1565, is supervised by the Ministry of Labor, and lodges guarantees against wages. Invoice your client lawfully, and get paid with a payslip.
More guides you might find useful
Invoice without opening a business
The complete guide to the employee-invoice model · how it works, what it costs and the law.
Read more
Employee rights in Israel
Pension, leave, sick days and recuperation pay · what every employee is entitled to by law.
Read more
Freelance without opening a business
Everything a freelancer needs · invoices, a payslip, social rights and full support.
Read more
