Form 101

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Form 101 is an "employee card" used for tax coordination by the employer. It is an Israel Tax Authority form that gives the employer information and instructs it how much income tax to withhold from the employee's salary.

When Must Form 101 Be Filled In?

Every employee must fill in Form 101 in the following cases:

1. At the start of a new job — the employee fills in the form and submits it to the employer within a week of starting work or on the day the first salary is received, whichever is earlier, together with a copy of the ID card.
2. At the start of each tax year — on 1 January of every year (regulation 2 of the Income Tax (Withholding from Salary and Wages) Regulations).
3. When personal details change — marriage, divorce, a new child in the family and the like — within a week of the change.

When filling in Form 101 it is important to pay attention to the personal details, including: ID number, home address, phone number, marital status, spouse details, children's details and reporting of additional income. All of this information is used by the employer to calculate the credits and exemptions the employee is entitled to, and by the Tax Authority to determine the rate of income tax to collect.

Tax Entitlement — Credit Points and Personal Credits

Every employee is entitled to deductions and credits in the payslip. The credits fall into two types: credit points and personal credits. Personal credits are usually granted on the employee's own contributions to a pension fund.

Every resident is entitled to 2.25 credit points, and a woman is entitled to an additional half point — 2.75 in total. Additional credit points go to parents of children under 19 (the entitlement varies with the child's age, for the father and for the mother), discharged soldiers, combat reservists, new immigrants, single-parent families, residents of qualifying localities, academic-degree holders and more. The value of one credit point in 2024–2027: ILS 242 a month (ILS 2,904 a year).

Form 101 for Tax Coordination

If an employee works in two places (or works as an employee and receives a pension from another source), they need tax coordination. Tax coordination can be done on the Tax Authority's website or at the Income Tax offices. To do it, you list the withholding-file numbers of both employers and the expected salary from each employer.

How to Fill In Form 101 — The Sections of the Form

Section A — Employer Details

Company name, withholding-file number, address. This section is filled in by the employer.

Section B — Employee Details

The employee fills in all personal details, including full name, ID number, date of birth, address, phone, marital status, gender, residency, health-fund membership and more.

Section C — Children Who Have Not Turned 19 in the Tax Year

Parents of children up to age 19 fill in the children's details in the table on the form and indicate whether the children live with them and whether they receive child allowance from National Insurance. This is an important section that grants tax credit points.

Section D — My Income from This Employer

In this section you fill in the income received from the employer and the date work began.

• Monthly salary — salary for work of at least 18 days a month.
• Salary for an additional position — salary for work of more than five hours a day, in addition to a salary or a taxable pension from another source. The employee may choose at which workplace the salary will be treated as the "additional position".
• Partial salary — salary for work of five hours a day or less, or of more than five hours a day but less than eight hours a week. Tax is withheld from a partial salary at the maximum rate, unless it is the only income.
• Wages (daily worker) — salary for work of fewer than 18 days a month, but not less than eight hours a week. Tax is withheld according to a daily table, unless it is the only income.
• Pension — for example, a pension from a pension fund. Do not report a pension exempt from National Insurance or a survivors' pension that is fully exempt.
• Scholarship — including a grant, prize or fee waiver given to a student or researcher.

Section E — Details of Other Income

Intended for anyone who has income beyond the income from the workplace for which Form 101 is being submitted.

• I have no other income from salary, pension or scholarship — for someone with no additional income of these types.
• I have other income — you specify the type of the other income and mark from which income you receive the credit points and tax brackets. An employee who did not mark "I have no other income" will be referred to the assessing officer for tax coordination.

Note: the section deals only with income from salary, pension and scholarship. Business income is not included in it — so an employee who also has a self-employed file, and has no additional salary, pension or scholarship, marks "I have no other income". On the business income they pay advances in the self-employed file, so it is worth coordinating this with their CPA.

Section F — Spouse

An employee who has a spouse fills in the spouse's details and indicates whether the spouse has income (from work, a pension, a business or other income). Under the Income Tax Ordinance, a "spouse" is a married person who lives and runs a joint household with the person they are married to — so, as a rule, common-law partners are not considered spouses for this purpose.

Section G — Changes During the Year

An employee who had changes during the tax year notifies the employer within a week of the change, and the information appears in this section.

Section H — Request for a Tax Exemption or Credit

An employee entitled to tax exemptions or credits marks them in this section in order to benefit from them. They include:

• Israeli resident — entitled to 2.25 income tax credit points.
• 100% disability or permanent blindness — attach confirmation from the Ministry of Defense or the Ministry of Finance, the assessing officer's confirmation or a blindness certificate. Anyone who also receives a monthly benefit under the Disabled Persons Law or the Victims of Hostile Action Law attaches confirmation of it.
• Qualifying locality — the employee and their first-degree family members live in the locality, and the employee has no other "center of life". Attach the local authority's confirmation on Form 1312A.
• New immigrant — an immigrant certificate must be attached. Anyone whose entitlement period is not continuous (due to military service, post-secondary studies or a stay abroad) applies to the assessing officer.
• Spouse with no income — a spouse who lives with the employee and has no income in the tax year — only if the employee or the spouse has reached retirement age, or is disabled or blind (section 9(5) of the Ordinance).
• Single parent living separately — a parent requesting credit points for children in their custody, receiving child allowance from National Insurance for them, and not running a joint household with another person.
• Children in my custody — to be filled in only by a single parent who receives the child allowance, a married woman or a sole parent. You state the number of children by age group.
• Children (for a parent who did not mark the previous item) — to be filled in by a parent who did not mark the previous item, an unmarried woman whose children are not in her custody, and a sole parent. Here too you state the number of children by age group.
• Sole parent — a parent in a single-parent family of a child up to age 19 whose other parent has died, or where the child is registered in the population registry without the other parent's details.
• Parent of a child not in their custody who contributes to the child's support — a parent living apart from their children who is not entitled to credit points for them, and who has produced a court ruling requiring them to pay child support, fills in this item.
• Parent of a child with a disability up to age 19 receiving a disabled-child allowance — provided the spouse does not receive these credit points. Attach confirmation of the allowance from National Insurance for the current year.
• Alimony to a former spouse — to be filled in by someone who has remarried. Attach the court ruling.
• Ages 16–18 — someone who (or whose spouse) turned 16 and has not yet turned 18 in the tax year.
• Discharged soldier or someone who completed national service — state the start and end dates of service and attach a discharge certificate.
• Completion of studies — completing an academic degree, an internship or vocational studies. Attach a declaration on Form 119.
• Combat reservist — someone who served as a combat reservist in the previous tax year. State the number of reserve-duty days and attach the IDF's confirmation of entitlement.

Section I — Request for Tax Coordination

Anyone who works in several jobs, or who did not work from the start of the tax year until starting work with the employer for which this Form 101 is filled in, may request tax coordination, so that tax is withheld according to total income and not in excess. In this section you fill in:

• I had no income — someone who had no income at all from the start of the tax year until starting work with the employer marks this item. Maternity pay and unemployment benefits are taxable income, so someone who receives them cannot mark it. Attach proof, such as a Border Police confirmation of a stay abroad or a medical certificate; without proof — apply to the assessing officer.
• I have income from other employers — fill in the other employers' details: name, address, withholding-file number (shown on the payslip), type of income, amount of income and the tax actually withheld.
• Assessing officer's approval — if tax coordination has already been done, mark it and present the approval to the employer.

Section J — Declaration and Signature

In this section the employee declares that all the details on the form are correct, and signs acknowledging that providing false information is an offense.

How We Help

If you want help filling in the form and are not sure which credits and items to mark, contact us and we will be glad to help — to advise, fill in and submit the forms to the employer and to the Income Tax Authority.

The above article does not constitute a recommendation, professional advice or a legal opinion. If you have any questions, you are welcome to contact us — we will be happy to advise, accompany and represent you before the Israeli tax authorities.

Kind regards,
Hager-Alperowitz & Co. — Certified Public Accountants