Israel's miluim payroll math: every employer recalculates from Form 101.
From 1 January 2026 every Israeli employer with reservist staff faces a two-front payroll change. A new combat-reservist credit-point scale grants 0.5 credit points at 30 service days, climbing to a 4.0-point ceiling at 110 days; each point is worth ₪242 (≈€60) a month, so a heavy reservist's monthly payroll line moves by up to ₪968 (≈€240). The 20% Bituach Leumi (Israeli National Insurance Institute, NII) employer reimbursement expired the same day, extended only through 31 March 2026 by draft regulation. Bakeries, garages, dental clinics and marketing agencies bracket each reservist by hand from IDF (Israel Defense Forces) Form 1324a and Section 16 of Form 101 (the employee tax-withholding declaration).
01The pain
₪968 (about €240). That is how much a Tel Aviv marketing-agency owner now has to subtract from her senior copywriter's monthly tax withholding every payroll cycle, because the copywriter served 110 days in miluim (Israeli reserve duty) last year and Section 16 of his Form 101 (employee tax-withholding declaration) now claims four reservist credit points worth ₪242 (about €60) each.1
Israel's combat-reservist credit regime kicked in on 1 January 2026. The Knesset settled a stepped scale: 0.5 credit points at 30 service days, 0.75 at 40, 1.0 at 50, and an additional 0.25 per five extra days, up to a ceiling of 4.0 at 110.2 The mechanic for the employer is manual. Each reservist obtains IDF (Israel Defense Forces) Form 1324a confirming service days, fills Section 16 of Form 101 each January, and the payroll department applies the credits monthly against income-tax withholding.3
The same calendar removed the cushion. The 20% Bituach Leumi reimbursement that softened employer social-contribution costs during reserve duty expired on 1 January 2026; a draft regulation extends it only through 31 March 2026, with claims due within 60 days of publication.4 A bakery in Bnei Brak with three reservist bakers brackets each one by hand against the day-count scale and files the NII (National Insurance Institute) reimbursement claim before the window shuts.
Further reading
- 1 CWS Israel — 2026 Israeli tax-changes complete guide: combat-reservist credit-point scale (0.5 at 30 days, stepped to 4.0 at 110 days), credit-point monetary value, Form 1324a / Form 101 Section 16 mechanic, and employer reserve-duty administration listed under EOR (Employer of Record) services: cwsisrael.com
- 2 CWS Israel — 2026 Israeli labour-law changes: 20% Bituach Leumi (NII) employer-reimbursement expiry on 1 January 2026, draft extension through 31 March 2026, 60-day claim window, plus the combat-reservist credit-point scale verbatim quote used in this page: cwsisrael.com
- 3 Metaintro — workplace rights of reservists and their employers in Israel for 2026: Form 1324a procurement, Section 16 of Form 101 submission, monthly application of credit points by the employer's payroll department, employment-protection windows post-service: metaintro.com
- 4 Globes (Israeli business daily) — Israel's cabinet approves bonuses for reservists: cabinet decision on the 2026 reservist financial-benefit package, employer-reimbursement timetable, and political context behind the credit-point scale that now lands on every employer's payroll: globes.co.il
02Who solves this today
Two Israeli professional-services providers whose own public surface explicitly markets miluim / reservist-payroll handling for employers — the closest existing answer to the January-2026 two-front change. The wider Israeli payroll-software market (Hilan, Michpal, Malam, Synel, Niloosoft) has not yet productised a public miluim-credit-point feature on its homepages, which is precisely the wedge in the third TL;DR bullet. Each entry was checked live on the date of writing. The list is intentionally narrow.
Listed providers publicly market to the Israeli miluim-payroll / reservist-credit-point niche on their own service pages. Inclusion is not endorsement. Adjacent vendors and platforms were considered and excluded where their public homepage did not explicitly name the niche at the date of writing — Hilan (hilan.co.il/en) returned HTTP 200 but its English homepage marketed payroll, time-and-attendance, pension, HR and analytics with no miluim or reservist-credit-point product surfaced, so it was dropped; Michpal (michpal.co.il) returned HTTP 200 but markets payroll, pension, attendance and HR-portal products with no miluim handling surfaced at homepage level, so it was dropped; Malam-Team (malam-team.com) returned HTTP 200 but the page body fetched empty (likely client-side rendering) and no miluim positioning could be confirmed at homepage level, so it was dropped pending re-check; Synel (synel.co.il) returned HTTP 200 but the page body fetched empty and no miluim handling could be confirmed, so it was dropped pending re-check; Shaklarim (shaklarim.co.il) returned ECONNREFUSED on probe, so it was dropped pending re-check; Papaya Global (papayaglobal.com) returned HTTP 403 (anti-bot wall) and could not be verified, so it was dropped; Deel (deel.com) returned HTTP 200 but the homepage markets a global EOR / payroll platform with no Israel-specific miluim positioning surfaced, so it was dropped; Remote.com's Israel reservist support article (support.remote.com/...) returned HTTP 403, so it was dropped; CWS Israel's services page (cwsisrael.com/services/) was reviewed for service-marketing language and returned only a generic "Bituach Leumi adherence" line — the cwsisrael.com/israeli-tax-changes-2026-complete-guide/ page is the live URL where the reserve-duty administration line is explicitly marketed, so that URL is listed instead. CWS Israel's labour-law-changes 2026 guide and the Globes / Metaintro pieces are referenced in section 01 as practitioner / press citations rather than listed as solution providers. The narrowness of the list — one EOR-style services firm and one open-source AI skill against an Israeli payroll-software market that does not yet productise the miluim credit-point handling — is itself the structural opening: today the recipient-side automation lives inside contingent-workforce retainers and informational guides, not inside a productised SaaS sized for the bakery, garage, dental clinic or marketing agency running its own payroll for three to thirty staff.
Listed companies — manage your entry. If you are one of the providers above and anything here is wrong, missing, or out of date — or you'd rather not be listed — write to us. Removal within 24 hours; corrections within 7 business days. We do not contact listed companies first; we publish what your own public marketing claims and respond when you reach out. Email contact@aikraft.com.