What are the National Insurance Institute (NII) rules for Israelis who travel abroad on relocation? Relocation can be a hybrid situation, with one leg in Israel, one leg abroad, and often on a work assignment for an unknown period.
The income-tax treatment is currently very challenging. Nevertheless, NII officials live in a world of their own, so the Israeli social-security treatment can be even more challenging.
The NII’s explanation is opaque. Here’s our take.
NII payments when abroad: An Israeli resident should keep paying NII contributions and its health-tax supplement when they are abroad. Failure to do say may harm their right to healthcare, pensions, and other social-security benefits.
What are the scenarios?
Four main cases for Israeli travelers abroad
According to the NII, there are four main cases for Israeli travelers abroad.
• First, people who have no income should pay the minimum national insurance of NIS 250 per month (in 2025).
• Second, people employed abroad by a foreign employer should pay NII contributions applicable to those who derive income not from work, i.e., passive income. The NII rates are 12.09%-12.17% (and 52% of the amount paid is arguably tax deductible). But Israeli residents abroad with no income pay the flat rate of NIS 250 per month to the NII.
• Third, for people employed abroad by an Israeli employer, the employer withholds national insurance from their salary as usual.
• Fourth, an Israeli resident who pays foreign national insurance, i.e., social security, in a country that has a social-security treaty with Israel should also pay a “health tax” of 5.17% (in 2025, up from 3.23% in 2024) to the NII. This health tax is really a constituent of national insurance, but it is not exempt for treaty purposes.
Israel has social-security treaties with Austria, Belgium, Bulgaria, Canada (except Quebec), Czech Republic, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Poland, Romania, Russia, Slovakia, Sweden, Switzerland, Uruguay, and the UK. There is no social-security treaty between Israel and the US.
Touring abroad: Anyone going on a long trip abroad not for work is meant to pay a flat rate of national insurance of NIS 250 per month, so long as that person remains an Israeli resident. This helps preserve Israeli healthcare and social-security rights, e.g., people on a two-month post-IDF trip abroad.
Relocation abroad: First check if you will remain an Israeli resident. This involves considering your center of living over five years. It is similar but not the same as the income-tax rules for residency (which may soon be changing, according to recent proposals).
Second, if you are sure you are dropping Israeli residency, you may owe Israeli “exit tax” (really capital-gains tax) at rates of 25%-35% as if you sold your assets. This is payable upon leaving Israel or when you actually sell something. In practice, this is poorly enforced once people are abroad.
Third, if you are not dropping Israeli residency, start a standing order to pay the flat rate of national insurance of NIS 250 per month.
Fourth, if you work as an Israeli resident for a foreign employer and pay foreign social security in one of the above social-security treaty countries, top up the NII payments to health-tax levels.
Fifth, if you work as an Israeli resident for a foreign employer in a non-treaty country, top up NII payments to non-work (passive) income levels.
Sixth, if you work as an Israeli resident for an Israeli employer, the employer should withhold NII contributions from your salary.
Comments: These rules are confusing and not always applied in practice. Many borderline cases exist. Some people travel abroad to study and then find work or find a close friend. Some people travel abroad to get away from the trauma of war.
As always, consult experienced professional advisers in each country at an early stage in specific cases.
leon@hcat.co
The writer is a certified public accountant and tax specialist at Harris Consulting & Tax.