Question 1

What is the difference between Osek Patur (עוסק פטור) and Osek Murshe (עוסק מורשה)?

Accepted Answer

An Osek Patur is an exempt dealer whose annual turnover does not exceed ~₪120,000 (2025 cap). They do not charge 17% VAT on sales and cannot claim refund on VAT paid for business expenses. An Osek Murshe must register for VAT, charges 17% on invoices, and claims back input VAT.

Question 2

Does an Osek Patur pay income tax (Mas Hachnasa)?

Accepted Answer

Yes. Osek Patur is only exempt from Value Added Tax (VAT / מע״מ). They are fully subject to standard Israeli progressive income tax brackets (10%-50%) and National Insurance (Bituach Leumi) on net taxable profit.

Question 3

Which professions cannot register as Osek Patur regardless of turnover?

Accepted Answer

Under the Israeli VAT Law, specified professional liberal trades must register as Osek Murshe from day one: doctors, dentists, lawyers, accountants (CPAs), architects, engineers, economists, psychologists, and driving instructors.

Question 4

How much National Insurance does a self-employed person (Atzmai) pay?

Accepted Answer

For 2025, self-employed workers pay 5.97% on net monthly income up to ₪7,522, and 17.83% on income between ₪7,523 and the maximum ceiling of ₪49,030. Approximately 52% of Bituach Leumi contributions are deductible from taxable income.

Question 5

Is pension mandatory for freelancers in Israel?

Accepted Answer

Yes, under the Mandatory Pension Law for the Self-Employed, qualifying freelancers must contribute 4.45% on income up to half the national average wage, and 12.55% on income between half and full average wage, with non-compliance penalized.

Israel Osek Patur vs Osek Murshe Calculator

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