Confused About How to Budget for a Live-In Foreign Caregiver? Here are the Nuts and Bolts

Base Salary 

Base Salary is linked to the Israeli minimum wage, currently NIS 5300/month, which may include the mandatory payment of NIS 100/week as “pocket money”. More experienced caregivers may ask for more. Different people state the Base Salary in different ways, which can be confusing, but for all intents and purposes the Base Salary is equal to a monthly payment + pocket money. For example:

NIS 4,900/month + NIS 400/month “pocket money” = NIS 5,300/month (minimum wage)

NIS 5,300/month + NIS 400/month “pocket money” = NIS 5,700 month (above minimum wage)

Pocket money is paid to the caregiver weekly in cash – the remainder of the Base Salary is paid at the end of the month and no later than the 9th day of the following month.

Additions to Base Salary

Like all Israeli employees, foreign caregivers are entitled to social benefits including pension & severance, d’mei havra’ah (convalescence pay), paid vacation and paid holidays:

Pension & Severance

Beginning the 7th month of employment, the employer must put aside each month an amount equal to 12.5% of the Base Salary for pension (6.5%) and severance (6%) which is paid to the caregiver at the end of his/her employment. We suggest putting aside an additional 2.33% of the Base Salary which may be due to the caregiver as Dismissal Compensation (see details below). 

D’mei Havra’ah (Convalescence Pay)

A caregiver who has completed 12 full months of work (in total) is entitled to a d’mei havra’ah at a fixed daily rate, currently NIS 378 NIS. For the first year – 5 recuperation days, for the second and third year – 6 days, and for the fourth to tenth year – 7 days.

Holidays and Rest Days

The caregiver is entitled to one day off (25 consecutive hours) every week, and 9 national holidays (of their choosing, per the calendar of either Israel or their home country). The caregiver may opt to work on one of these days, in which case s/he is entitled to payment, currently NIS 362/day.  “Replacement” caregivers who fill in for days off may charge more.

Vacation Days

Caregivers are entitled to 14 vacation days per year. S/he may opt to “cash in” on vacation days rather than take them off, at a current rate of NIS 212/day. Beginning the 5th year of employment, the number of vacation days increases gradually. 

We recommend keeping an organized record of all amounts owed & payments made to the caregiver and ask the caregiver to sign every time s/he is paid.

Expenses During the Period of Employment

Medical Insurance

It is mandatory to purchase health insurance on the caregiver’s behalf. Depending on the insurance provider, the cost ranges from NIS 6.5 to NIS 7.65 per day.

Food Allowance

Employers are obligated to provide caregivers with three meals a day. Most caregivers prefer to receive a “food allowance” of NIS 200/week to purchase their own food. 

Bituach Leumi

If the caregiver’s Base Salary is more than 5,500 NIS per month the employer must report and pay contributions to Bituach Leumi on the balance between NIS 5,500 and the Base Salary. For example, if the Base Salary is NIS 5,700 then the employer must report and pay contributions on NIS 200/month. 

Deductions

From the caregiver’s Base Salary, employers may deduct a certain amount for room and board, water, electricity and health insurance and pocket money. The amount of the deduction is set by regulation and varies according to place of residence, and whether the employer rents or owns.

Details can be found in the Foreign Worker’s Rights Handbook published periodically by the Ministry of Population:  

https://www.gov.il/BlobFolder/generalpage/foreign_workers_rights_booklets/he/foreign_workers_handbook_2021_en.pdf

Termination Expenses

Dismissal Compensation

If the caregiver’s employment is terminated by the employer, or if the employer passes away or moves to a nursing home, the caregiver is entitled to compensation of one month’s salary for every year s/he worked (2.33% of Base Salary). A caregiver who resigns is not entitled to dismissal compensation. 

Notice

If caregiver’s employment is terminated by the employer without notice, or if the employer passes away or moves to a nursing home, the caregiver is entitled to a final payment as follows: for the first 6 months of employment, 1 day for each month; for the 7th month and up to a year of employment, + 2.5 days for each additional month; after 1 year- one full month.

Housing 

The employer must provide housing to the caregiver for at least one week after the last day of work.

A Few Notes

Bituach Leumi Benefits

Employers who receive “gimlat siyud” long-term care benefit from Bituach Leumi may choose to employ a caregiver directly, or through a private nursing care company. When a caregiver is employed through a nursing care company, the gimlat siyud payment is transferred monthly to the company, and the company shares in the employment obligations in proportion to the level of the benefit, including salary payment and pension/severance contributions.

Supply and Demand

Like any employment relationship, the terms of a caregiver’s employment are negotiable. The caregiver’s base salary can be no less than the Israeli minimum wage, but it is not uncommon for caregivers to ask for a higher base salary, particularly if the caregiver has significant experience, if the care situation is especially demanding or if the employer lives in an “undesirable” location where “supply” of caregivers is low and “demand” for care is high. It is not uncommon for caregivers to ask for a base salary of NIS 5300 PLUS NIS 400 “pocket money”, which is really a Base Salary of NIS 5,700, or for a Base Salary of NIS 5,300 net of deductions. 

Disclaimer

This overview is intended only to be a guide to budgeting for a foreign worker, and should not be relied upon for actual calculations or otherwise.  Laws regarding the employment of foreign caregivers can be confusing and change from time-to-time; for definitive advice please consult your agency, or a qualified attorney or accountant.