Tax Coordination (Teum Mas): How to Avoid Overpaying Tax

The Essence

Tax coordination, or Teum Mas (תיאום מס), is a procedure for individuals who receive income from multiple sources in Israel (e.g., two salaries, or a salary and a pension). It allows for the correct calculation of your aggregate tax to prevent tax from being withheld at the maximum rate from the second and subsequent sources of income. The primary objective is to avoid significant tax overpayment throughout the year.

Who is Eligible?

The Teum Mas procedure is necessary if you fall into one of the following categories:

• You are employed by two or more employers simultaneously.
• You receive a salary and concurrently receive a pension.
• You have changed jobs during the year, and there was a gap in payments.
• You are self-employed (Atzmai) and also work as a salaried employee (Sachir).
• You receive income from renting out real estate in addition to your primary salary.

Who does NOT need the procedure: Individuals with only one source of income from a single employer throughout the entire tax year.

Your Rights

Your primary right is to pay tax calculated based on your total income, rather than in parts. Without Teum Mas, your second (and each subsequent) employer is required by default to withhold the maximum income tax (47% as of 2024).

The Teum Mas procedure allows you to:

1. Combine all your incomes for the correct calculation of tax credit points (Nekudot Zikui).
2. Apply the correct progressive tax rate to your entire income.
3. Obtain an official authorization (Ishur) from the Tax Authority (Rashut ha-Misim) for your second employer, stipulating the percentage of tax to be withheld.

Step-by-Step Guide

1. Gather documents. Prepare the payslips (Tlushei Maskoret) from all your employers. You will need their withholding file numbers (Tik Nikuim).
2. Choose a submission method. The simplest and fastest method is online via the personal account on the Israel Tax Authority website. Alternatives include submission through an accountant or in person at a tax office branch.
3. Complete the online form. Log in to your account on the government portal. Locate the section for submitting a tax coordination request (in Hebrew: בקשה להקלה ולתיאום מס).
4. Enter your data. Provide information about all your employers and the estimated annual income from each. The system will automatically calculate the required withholdings.
5. Receive the authorization (Ishur). After the request is processed (which typically takes from a few minutes to several business days), you will receive an official document.
6. Provide the authorization to your employer. Print or send the received Ishur to the accounting department of your second (and subsequent) workplace. This is a critical step; the procedure will not be complete without it.

List of Documents

• Identity card (Teudat Zehut).
• Payslips (Tlush Maskoret) from all current employers.
• Employer withholding file numbers (Tik Nikuim), which are listed on the Tlush Maskoret.
• If you are applying for a previous year, the annual salary report (Tofes 106) from each employer will be required.
• Your bank account details (in case a refund is necessary).

Key Considerations

• Annual procedure. The tax coordination authorization is valid only until the end of the current tax year (December 31). You must reapply every year.
• Deadlines. Apply at the beginning of the tax year or immediately after starting a second job. If you have not done so, you can file a request for a tax refund (Echzer Mas) in the following year, but this is a more complex process.
• Income changes. If your income from one of your jobs changes significantly during the year, it is recommended to update the Teum Mas to avoid calculation errors.
• Responsibility. You are responsible for providing the authorization (Ishur) to your employer. If you fail to do so, the maximum tax rate will continue to be withheld.

Contacts and Links

To submit an online application, use your personal account on the official website of the Israel Tax Authority (רשות המסים בישראל).

In accordance with regulations, a direct link to the government portal cannot be provided in this guide. Use the search query "רשות המסים" to access the site.

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