Do you also need to coordinate National Insurance contributions?

It is recommended. Someone who works for more than one employer may pay double National Insurance on the reduced portion, and coordinating contributions (Form 644 to the National Insurance Institute) prevents this in advance. Anyone who did not coordinate can check eligibility for a refund.

Tax coordination in IsraelWho needs it, how to file · and what happens without it

Q: What happens if you do not do tax coordination?

The employer at the additional workplace is required to withhold income tax at the maximum rate (47% at present) from the first shekel. You can get the excess back through a retroactive coordination within the same tax year or a tax refund request after year-end, but it is better to coordinate in advance rather than finance the state in the meantime.

Q: How do you do tax coordination at the Tax Authority?

You log in to the online tax coordination service on the Israel Tax Authority website, identify yourself, enter all your income sources and receive a certificate · in most cases immediately. Those who prefer a manual route fill in Form 116 and submit it to the assessing office. You then give the certificate to each employer.

Working more than one job? Getting a salary and a pension too? Without tax coordination, the additional employer must withhold income tax at the maximum rate · from the first shekel. The complete guide: who needs it, how to coordinate at the Tax Authority, and how NETO consolidates everything under one licensed employer.

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Tax coordination in Israel for an employee with more than one income source

Combined calculationAll income, one certificate

The correct bracketInstead of the maximum rate

AI summary · Tax Coordination for EmployeesClick to read the page summary

Tax coordination in Israel is a combined calculation across all your income, needed when you have more than one source of income. This guide explains who needs it, how to file, and what happens without it. It walks through three real situations and how to coordinate at the Tax Authority. NETO can simplify this by making you a single employer instead of many.

Tax coordination service Verify NETO license 1565

Quick summary

Tax coordination is a combined calculation of all your income from every source, after which the Israel Tax Authority sets how much tax each payer should withhold. Anyone with more than one source of income who does not coordinate · the additional employer must withhold tax at the maximum rate. You coordinate online through the Tax Authority system or on Form 116, and the certificate is valid for one tax year · you renew it every January. Working through NETO? All your clients are consolidated onto one payslip from a single licensed employer · which makes coordination far simpler.

On this page

What tax coordination is
Who needs it · situations table
What happens without coordination
Real-life examples
How to coordinate at the Tax Authority
When to renew
Tax coordination through NETO
Official details to enter
Watch: how it works
And National Insurance
Frequently asked questions
Summary

What tax coordination is

Tax coordination · a combined calculation of all your income

Income tax in Israel is progressive: the tax brackets are calculated on your total income, from all sources together. But each employer only knows the salary it pays itself. When there is only one workplace there is no problem · the employer withholds tax according to the regular brackets. When there is more than one source, the additional employer does not know which bracket you are in, so the legal default is to withhold tax at the maximum rate. Tax coordination is the solution: the Tax Authority calculates all your income together and sets in advance how much tax each payer should withhold · so that in total you pay exactly the tax due, no more.

The online system guides you step by step, is available from phone and desktop, lets you coordinate several payers at once, shows the reliefs and credit points you can claim (for example for children) · and in most cases, when no documents need to be attached, the certificate is issued immediately.

A worked example

An employee earns 10,000 shekels at a first job and starts a second job to supplement income, earning 4,000 shekels there. With tax coordination · the combined calculation is made on the regular brackets for total income of 14,000 shekels (10,000 + 4,000), and the second job is withheld accordingly. Without tax coordination · that 4,000 is withheld at the maximum rate, from the first shekel. The difference can be reclaimed later, but only after the fact.

Who needs tax coordination · situations table

The rule is simple: more than one source of employment income · you probably need it. Here are the common situations.

Your situation	Need coordination?	What to do
Two jobs (or more) as a salaried worker	Yes	Coordinate online at the Tax Authority · give the certificate to each employer. At the additional job, mark on Form 101 that you have other income.
Salary + a pension or annuity	Yes	A taxable pension counts as an income source for every purpose · enter the pension payer in the coordination too.
Salaried and also self-employed	Usually yes	Business income is reported separately, but it affects your overall bracket · it is recommended to coordinate and consult a professional.
A one-off job or extra project	Yes, if there is another payer	Even temporary income from an additional payer is withheld at the maximum rate without coordination · or you work on the project through NETO and receive it all on one payslip.
A single workplace only	Usually not	The sole employer withholds according to the regular brackets · you fill in Form 101 and mark that you have no other income.
All clients through NETO only	Usually not	Even with many clients · the employer is one (Bareket I.T Ltd) and everything is consolidated onto one payslip, like working at a single workplace.

The table describes the common situations in general terms and is not tax advice. In special cases (exemptions, disability, residency and more) it is best to check with the Tax Authority or a qualified professional.

What happens without tax coordination

An employer at an additional workplace that has not received a tax coordination certificate from you is required, under the income tax regulations, to withhold tax at the maximum rate · 47% at present · and that is from the first shekel of the salary. This is not a fine and not an employer error: if the employer does not withhold this way, it will be required to make up the difference to the authorities out of its own pocket.

The good news: tax paid in excess is not lost. You can carry out a retroactive tax coordination within the same tax year and receive the excess back on the following payslips, or submit a tax refund request after year-end. But in the meantime the money sits with the state instead of with you · so it is better simply to coordinate in advance, at the start of the year or the moment you begin an additional source of income.

A low-income second job

When the additional job pays a modest amount, tax coordination usually sets a very low · or even zero · withholding on it, because your combined income still falls in a low bracket. Without coordination, that same job is withheld at the maximum rate from the first shekel · so coordination is especially worthwhile precisely for smaller, secondary jobs.

Real-life examples

Three real situations · when you need coordination and what to do

Three common scenarios that show what it looks like in practice. General guidance only · not tax advice.

Daniel · salaried, took a freelance project

Daniel works full-time at a tech company, and in the evenings took a consulting project for a client through NETO. For income tax he now has two employers: the company where he is salaried, and Bareket I.T Ltd · NETO's licensed employer.

Without tax coordination, the salary from the project is withheld at the maximum rate from the first shekel.

What to do: coordinate online at the Tax Authority, enter both employers, and upload the certificate to the NETO portal together with Form 101.

Maya · student with two part-time jobs

Maya combines her studies with shifts at a cafe and a part-time customer-service role. Two employers · even if each job is small. At the additional employer, without a coordination certificate, tax is withheld at the maximum rate.

On low income, coordination usually results in a very low or zero withholding · which makes it especially worthwhile.

What to do: coordinate online at the start of the year or the moment the second job begins, and give the certificate to both employers. It is also worth checking National Insurance coordination.

David · salary alongside an early pension

David took early retirement and receives a taxable pension, and at the same time returned to work part-time as a salaried employee. The pension payer counts as an income source for every purpose · so he has two payers.

Without coordination, one of the payers withholds at the maximum rate · even though his real bracket is lower.

What to do: tax coordination that includes both the pension payer and the employer, hand the certificate to both · and renew every January.

How to coordinate at the Tax Authority

The online process takes a few minutes, and in most cases the certificate is issued immediately.

Log in to the online tax coordination service of the Israel Tax Authority and identify yourself. Those who prefer a manual route can fill in Form 116 (an application for relief and coordination in calculating tax withholding) and submit it to the assessing office.
Enter all your income sources: the name of each employer or payer, its deductions file number and expected income. Employees working through NETO enter Bareket I.T Ltd.
The system displays the relevant reliefs and credit points (for example for children) and lets you claim them in the same application.
Receive a tax coordination certificate · in most cases immediately, when no documents need to be attached. The certificate specifies how much tax each payer should withhold.
Give the certificate to each of your employers (or upload it to their payroll system) · and from that payslip the withholding is updated.

When to renew? Every January

A tax coordination certificate is valid for one tax year only · from 1 January to 31 December. At the start of each year you need to produce a new certificate, even if the employers and income have not changed. Anyone who starts an additional income source mid-year coordinates immediately, without waiting for January.

Tax coordination through NETO · one employer instead of many

People who work with several clients without a registered business run into exactly this problem: every client that pays them is another "employer" for tax purposes, and another line in the coordination. Working through NETO gives a completely different structure · you are a salaried employee of a single licensed employer, Bareket I.T Ltd, which holds manpower contractor license 1565 with guarantees deposited at the Ministry of Labor. All the clients you work with through the system are consolidated onto one payslip, and NETO reports the salary and withholds the tax lawfully.

To be honest: working through NETO does not exempt you from tax coordination · no service does. But it simplifies it greatly: instead of coordinating against three or four different payers, you have one consolidated income source. If NETO is your only workplace · in most cases you will not need coordination at all. If you also have another job · you coordinate against just two sources, and upload the certificate to the NETO portal together with Form 101.

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Payslip, National Insurance and pension · reporting to the authorities is on us.
Operating since 2016 under manpower contractor license 1565.

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Tax coordination through NETO · all clients on one payslip from a single licensed employer

How it works in practice · step by step

Register for free and fill in Form 101 (the employee card) in the NETO portal.
If NETO is your only source · mark "I have no other income" and that's it, the system withholds according to the regular brackets.
If you also have another employer · run tax coordination in the Tax Authority system, enter Bareket I.T Ltd as one of the payers, and upload the certificate to the portal.
The NETO system sets you on the withholding rate stated in the certificate · applied automatically on every payslip.
At the start of each year you fill in Form 101 again, and if needed · renew the coordination certificate too.

Employers who employ freelancers and temporary workers · you can consolidate your side through NETO too: register as an employer, with no setup fees. For operational questions · customer support at +972-8-976-1874.

Official details

Tax coordination · income tax and National Insurance in one place

The employer details to enter in your coordination, and the official routes · organized by authority.

Employer details to enter in the coordination

Employer name: Bareket I.T Ltd
Company ID: 515486058
Income Tax deductions file: 925435851
National Insurance deductions file: 9254385100

Coordination at Income Tax

Coordinate in the government service: Online tax coordination · Israel Tax Authority

Then, in the NETO portal:

Log in to the NETO portal
Personal details tab → Form 101 · tax coordination
Enter the details from the certificate for the employer "Bareket I.T Ltd"
Attach the certificate

The system sets you on the withholding rate stated in the certificate · applied automatically on your payslip.

Coordination at National Insurance

Who it suits: anyone whose additional income is below the reduced-rate threshold · to avoid paying double National Insurance on the reduced portion.

Contribution coordination is done on Form 644, submitted to the secondary employer · Bareket I.T Ltd.
More on refunds and eligibility: Self-employed vs salaried · National Insurance

Anyone who did not coordinate can check whether a National Insurance refund is due.

Watch: how it works in practice

A short walkthrough of how NETO consolidates payment and payroll under one licensed employer · the structure that makes tax coordination simpler.

For employers · how to hire and pay in Israel through NETO

Watch · in under 2 minutes, see how NETO consolidates payment and payroll under one licensed employer, so tax coordination is simpler.

And what about National Insurance?

Income tax coordination does not settle National Insurance and health contributions · those are withheld separately, also on a graduated basis: a reduced rate on the first portion of income and a full rate above it, up to the ceiling. Someone who works for more than one employer may pay the reduced rate twice or fall outside the correct calculation, which is why contribution coordination exists (Form 644 of the National Insurance Institute). Anyone who did not coordinate may be due a refund.

The criteria and how to claim are covered in a separate guide: self-employed vs salaried · National Insurance, and see also how the primary and secondary employer is determined.

Frequently asked questions

Tax coordination · questions and answers

What is tax coordination?

Tax coordination is a combined calculation of all of an employee's income from every source, after which the Tax Authority sets how much tax each payer should withhold. Without coordination, the additional employer must withhold at the maximum rate. You file it in the Tax Authority's online system or on Form 116, and working through NETO consolidates your income under a single employer.

Who needs to do tax coordination?

Anyone with more than one source of employment income: two jobs or more, a salary alongside a taxable pension, and a salaried worker with other income. Someone who works at a single workplace usually does not need it, because the sole employer withholds according to the regular brackets.

What happens if you do not do tax coordination?

The employer at the additional workplace must withhold income tax at the maximum rate (47% at present), from the first shekel. The excess can be reclaimed · through a retroactive coordination within the same tax year or a refund request after year-end · but it is better to coordinate in advance.

How do you coordinate at the Tax Authority?

Log in to the online tax coordination service on the Tax Authority website, identify yourself, enter all your income sources and receive a certificate · in most cases immediately. Those who prefer a manual route fill in Form 116 and submit it to the assessing office. You then give the certificate to each employer.

When do you renew tax coordination?

A certificate is valid for one tax year only, from 1 January to 31 December. At the start of each year, in January, you produce a new certificate · even if nothing has changed with your employers.

Does working through NETO exempt you from coordination?

No, and no service does. What NETO does do: all the clients you work with through the system are consolidated onto one payslip from a single licensed employer (Bareket I.T Ltd, manpower contractor license 1565). So instead of coordinating against several employers, you coordinate against one source · with reporting and withholding done lawfully.

How do you coordinate when working through NETO?

If NETO is your only workplace, you usually do not need coordination. If you also have a salary from another employer, you run coordination in the Tax Authority system and enter Bareket I.T Ltd as the employer (Income Tax deductions file 925435851), then upload the certificate to the NETO portal together with Form 101. The system applies the withholding rate from the certificate.

Do you also need National Insurance coordination?

It is recommended. Someone who works for more than one employer may pay double National Insurance on the reduced portion, and coordinating contributions (Form 644) prevents this in advance. Anyone who did not coordinate can check eligibility for a refund · see self-employed vs salaried · National Insurance.

One tidy payslip instead of a coordination headache?

NETO consolidates all your clients onto one payslip from a single licensed employer · manpower contractor license 1565, just 5% commission on the client invoice, no signup fees and no monthly fees. Reporting to the authorities is on us, and your tax coordination becomes far simpler.

Employ workers with NETO Chat with us on WhatsApp

Summary

Tax coordination is how anyone with more than one source of income pays exactly the tax due · not the maximum rate. You coordinate online at the Tax Authority (or on Form 116), give a certificate to each employer, and renew every January. And anyone working with several clients without a registered business can consolidate everything onto one payslip through NETO and simplify the whole picture.

The rule · more than one source of employment income = you probably need coordination.
Without it · withholding at the maximum rate (47% at present) from the first shekel of the additional job.
How · the Tax Authority online system or Form 116 · a certificate, usually immediately.
When · at the start of every tax year, and whenever an income source is added.
NETO · one licensed employer (license 1565), one payslip, 5% commission on the client invoice · simpler coordination.
National Insurance · separate contribution coordination on Form 644 · worth checking for a refund too.

Disclaimer: the information on this page is general only, does not constitute tax or pension advice and is no substitute for individual professional review. Tax rates, brackets and ceilings are updated from time to time · check the current figures on the Israel Tax Authority and National Insurance Institute websites, and consult a qualified professional in complex cases.