Maternity Leave for Self-Employed Women in Israel: A Complete Guide
How female entrepreneurs in Israel can avoid losing maternity benefits from Bituach Leumi.
Maternity payments for self-employed women in Israel are an extremely important and often overlooked topic – especially for entrepreneurs who are just starting out and planning to grow both their business and their family.
It’s crucial to understand: self-employed women (atzmaiot) are insured under the National Insurance system (Bituach Leumi) and are entitled to maternity leave benefits. These benefits cover 15 weeks (105 days) of paid maternity leave. If the insured period is shorter than the required minimum, the leave may be reduced to 6 weeks (42 days). In cases of multiple births or hospitalization of the mother or baby, the leave may be extended.
The amount of the benefit is calculated based on the average income from either the 3 months preceding the leave or the previous calendar year – whichever is more favorable for the applicant.
Eligibility for maternity benefits requires that insurance contributions be paid in full and on time. A woman must have paid contributions for at least 10 out of the last 14 months, or 15 out of the last 22 months prior to starting maternity leave. If she has paid contributions for 6 out of the last 14 months, she may still qualify for a partial benefit covering 56 days (8 weeks).
The benefit amount is directly linked to the declared income and is capped at a maximum of NIS 1,711.33 per day, which corresponds to a monthly insured profit of approximately NIS 51,000.
How Is the Payment Calculated?
At the beginning of the tax year, the entrepreneur declares her estimated income, and Bituach Leumi calculates insurance contributions based on this estimate. After the annual tax report is submitted to the Israel Tax Authority, the data is automatically shared with Bituach Leumi, which conducts a reconciliation – issuing a refund if the actual income was lower, or requiring additional payment if the income was higher than initially declared.
Example 1: A woman declares a monthly income of NIS 40,000 and pays corresponding insurance contributions. Based on this, she receives maternity benefits. However, her actual income for the year turns out to be NIS 30,000 per month. Bituach Leumi will recalculate her benefits, and she will be required to return the overpaid amount.
Example 2: A woman declares NIS 20,000 per month in income, but ends up earning NIS 40,000. After filing her tax return, she will need to pay the difference in contributions – but her maternity benefit will also be increased accordingly.
These examples illustrate why it’s so important that the declared income accurately reflects actual earnings. At our office, we proactively recalculate advance income estimates at least three times per year to help our clients stay aligned with the real numbers and avoid unexpected charges or missed benefits.
Who Should Pay Special Attention?
TOPICS > Bituach Leumi, CPA Israel, CPA Services in Israel, CPA Services in Israel Financial Reporting, Israel Business Support, Maternity Leave for Self-Employed in Israel, Maternity Leave in Israel, Roeh Heshbon, Tax Services in Israel