Payroll accounting is the backbone of proper human resources management in any business. A certified payroll accountant is responsible for processing monthly payslips, income tax and National Insurance deductions, pension and advanced study fund contributions, recuperation and vacation calculations, and ongoing reporting to authorities. A small mistake on a payslip can cost a business fines, employee lawsuits, and reputational damage.
In this category, you will find professional payroll accountants specializing in payroll processing for companies of all sizes—from small businesses with 3 employees to companies with hundreds of employees. Services include monthly payslip generation, Form 161 for departing employees, annual Form 126, handling travel allowances, per diem, company cars and overtime, managing absences and vacations, and monthly reporting to the National Insurance Institute and income tax authorities.
Payroll accounting is closely integrated with the work of the business's accountants —while the accountant is responsible for financial statements and taxes, the payroll accountant handles everything related to employees. Additionally, in cases of disputes with employees, dismissals, or rights claims, it is advisable to work in conjunction with lawyers specializing in labor law and consultants from the field of organizational and human resources consulting .
When choosing a payroll accountant, ensure they hold a senior payroll accountant certificate from the Institute of Certified Public Accountants or a recognized institution, are experienced with leading payroll software (Hilann, Michpal, Shiklulit, Okez), and are updated on changing legislation—extension orders, collective agreements, hours of work and rest law, and annual vacation law.
Tips for choosing a professional
Ask for a certified payroll accountant from a recognized institution
Ensure they work with leading payroll software (Hilann/Michpal/Shiklulit)
Request a sample payslip before engaging
Ensure there is available support for employees
Request a service contract that also includes reporting to authorities
Keep a backup of all payroll files in the cloud independently
Frequently asked questions
What is the difference between a regular payroll accountant and a senior one?
A senior payroll accountant has undergone extensive training and is qualified to handle complex issues such as employee stock options, relocation, complex pensions, and retirement. For large businesses or those with senior employees, it is recommended to work with a senior payroll accountant.
How much does payroll accounting service cost?
The cost ranges from 30-80 NIS per employee payslip per month, depending on complexity (regular salary, commissions, overtime, company car), the number of employees, and the scope of accompanying services. Businesses with fewer than 5 employees sometimes pay a monthly minimum fee.
When must an employee's salary be paid?
According to the Wage Protection Law, salary must be paid by the 9th of the month following the month in which the work was performed. Late payment entitles the employee to significant compensation for delayed wages.
What is Form 126 and when is it submitted?
Form 126 is an annual report submitted to the Income Tax Authority detailing all payments and deductions for each employee for that year. It must be submitted by March 31 of the following year. For the employee, Form 106 is issued.
What is the difference between pension contributions and advanced study fund contributions?
Pension is mandatory (6% from employer + 6% from employee + 6.5% severance) and is intended for retirement age. An advanced study fund is a benefit (usually 7.5% employer + 2.5% employee) that can be withdrawn after 6 years. There are ceiling amounts for tax exemption.
What are the obligations in case of employee dismissal?
You must issue a dismissal letter, conduct a proper hearing, pay severance pay (one month's salary for each year of work) if not deposited into the pension fund, issue Form 161 for severance redemption, and settle all rights (vacation, recuperation, advance notice pay).
Can a payroll accountant replace the services of an accountant?
No. A payroll accountant deals solely with wages and employees, while an accountant is responsible for all financial management of the business—financial statements, VAT, income tax, and capital gains tax. In an organized business, both professionals work in parallel.