Payroll Accountant in Raanana

What is Payroll Accounting and Who Needs It?

Payroll accounting is one of the most critical accounting tasks in business. Every month, for each employee employed by a company or self-employed professional, a proper salary slip must be issued with statutory deductions — National Insurance, income tax, education fund, and pension where applicable. A small calculation error can lead to tax authority audits, penalties, or employee disputes.

If you are a exempt self-employed professional or authorized self-employed professional with employees, or a private company owner, payroll accounting is a legal obligation. Even independent contractors who do not employ others should stay updated on personal deductions and National Insurance. Ben Or Kook handles comprehensive payroll accounting — from payslip calculation through reporting to the tax authorities and National Insurance.

How Payroll Works — The Main Steps

The payroll process begins with basic data: base salary, deductions, additions, and work dates. From there, we calculate mandatory deductions — income tax according to the Israel Tax Authority tables, national insurance, severance fund, and family allowances if applicable. All of this must be recalculated each month, as tax rates and expenses change.

After calculation, we issue the payslip — the document the employee receives with a detailed breakdown of their salary and deductions. Ben Or Kook also reports to the Israel Tax Authority and National Insurance Institute in periodic reports, and updates the severance fund and pension. This is not a one-time task — it is a process that repeats every month and must be accurate and current.

In the past, many businesses did this manually or using Excel spreadsheets. Today, we use advanced accounting software that connects directly to the Israel Tax Authority and National Insurance Institute, which reduces errors and accelerates the process.

Why Is Accuracy in Payroll Calculations Important?

An error in a pay slip can lead to numerous problems. An employee may receive less than they are entitled to, or be over-deducted. The tax authority regularly audits payroll reports, and if there is a discrepancy between what you reported and what the employee reports in their annual tax return, this could result in an audit or fine.

Ben Or Kok uses updated software that connects directly to the tax authority and national insurance. This means your report is accurate and aligned with the data the tax authority sees. We also monitor changes in laws and rates, ensuring you are always up to date.

Another important point: employees today know their rights. An incorrect pay slip can create tension in the business and even lead to lawsuits. Professional consultation on payroll and social insurance matters saves complications and gives you peace of mind.

What You Need to Know About Income Tax and National Insurance

Income tax on wages is calculated according to tables updated by the tax authority from time to time. The rate depends on monthly salary, marital status, children, and other deductions. It is not a fixed number—it changes each month according to the data.

National insurance is a payment that both the employer and employee pay together. The employee's portion is deducted from the pay slip, and the employer's portion is paid separately to national insurance. The rate varies depending on salary and type of work. Family allowances are an addition that an employee is entitled to if they have children—this is not a deduction, but an addition to the salary.

Training fund and pension are long-term savings for the employee. The employer contributes a percentage of the salary, and the employee can also contribute. This forms part of the employee's social benefits package and affects their ability to retire in the future.

All this data must be accurate, up to date, and correctly mapped on the pay slip. Ben Or Kok handles all of this so you can focus on managing your business.

Common Payroll Accounting Errors — How to Avoid Them

Incorrect tax withholding. Many businesses use outdated or non-updated tax tables. This can lead to under-withholding or over-withholding. Check that your tables are current for the present year.

Forgetting special deductions. If an employee has special deductions (education fund, pension, health insurance), you must ensure they are deducted accurately. An error here can cause problems with pension funds and pension funds.

Late or missing reporting to the tax authority. Payroll reports must be submitted on time. Delays in reporting can lead to penalties or future issues. It also affects the tax authority's ability to update your file.

Mismatch between payslip and annual report. At the end of the year, each employee receives an annual report summarizing salary and deductions. If there is a discrepancy between the report and monthly payslips, it can trigger an audit.

Failure to update family allowances. Family allowances vary based on the number of children and their ages. If you do not update the data, the employee may receive an incorrect amount.

All of these errors can be avoided with an up-to-date system and professional management. Ben Or Cook handles all of this so you don't have to worry.

When Should You Contact a Payroll Accountant?

If you are a sole proprietor or company with employees — it's best to contact us now. Even if you handle payroll accounts yourself, a professional review can uncover errors you may have missed. Ben Or Kook offers a free initial consultation meeting, so you can examine whether there is room for improvement.

Additional issues you should address with a payroll accountant:

• Transitioning from self-management to professional management. If you've been handling this yourself or with office staff until now, switch to professional services to avoid errors.
• Tax authority audit. If you've received a letter from the tax authority regarding payroll accounts, it's time to seek professional advice.
• Changes in number of employees. If you've added employees or employees have left, you need to update reports and ensure everything is aligned.
• Changes in laws or tax rates. Every year there are changes in tax rates and National Insurance contributions. Professional review ensures you are up to date.