You may be losing out by using an Israeli payroll company for your US based job, instead of hiring an Israeli accountant to handle Israeli tax obligations independently.

You may be losing out by using an Israeli payroll company for your US based job, instead of hiring an Israeli accountant to handle Israeli tax obligations independently.

Avoiding conflicts of interest with your US accountant if they operate a subsidiary Israeli payroll provider is another issue to consider as well.

Payroll companies generally charge flat rates or equivalent to 3-15% of income (lower overall rates with a higher income level), and may use hidden exchange rates which are lower than market rates. 

Some US accountants in Israel operate Israeli payroll companies, which they recommend their clients to use them in a streamlined process. 

However, there may be a conflict of interest if they stand to gain from you using the payroll company vs. using an Israeli accountant to handle Israeli tax obligations independently. 

You need to reconsider things yourself, and reexamine each year based on income projections.

Many payroll companies charge lower fees as income goes up, but this is not out of generosity. 

Part of their reason is to stay competitive vs. the option of independent tax calculation via a private Israeli accountant. But the lower fees may not keep it worthwhile in any case.

Those with lower incomes would save if using an Israeli accountant as well, if they aren't expecting to be eligible for maternity payments. Paying for private disability insurance could make a lot of sense for these people.

An important thing to keep in mind is that if your US employer is paying you a US based salary without using an Israeli payroll company, you would not be eligible for maternity or disability payments from the US if not a resident.

This is an important thing to consider as well, and may be mitigated with the purchase of a private insurance policy for disability. But private income-replacing maternity insurance may be impossible to obtain. 

While under Israeli law, a U.S. employer with certain activities in Israel may be required to pay salaries through an Israeli subsidiary or payroll company, in some cases this obligation does not apply.

If a U.S. employer does not operate, or is not willing to operate through an Israeli entity or payroll provider, the Israeli resident employee still has options.

They may fulfill their Israeli tax obligations by hiring an Israeli accountant to handle tax filings and payments independently. 

While this approach can be more cost effective, it may carry legal or compliance risks that should be evaluated on a case by case basis.