A tool that helps you compare Israeli salary packages so you can make the best job search decisions.
This a guest post by Jonathan Degani. If you’d also like to guest post here on JobMob, follow these guest post guidelines.
Disclaimer: I am not a certified accountant, nor financial adviser. The information here should not be understood legally as financial advice. Any posts about financial stuff are based on whatever tax websites I see from the Israeli government. Some information could be flawed; I’m only human. I am always open to corrections, new ideas, and new opinions.
What is an Indifference Curve?
A few months ago, a friend was telling me about his job search.
“I know exactly what I want,” he told me. “I want to earn X shekels and get a company car.”
“But what if you earn a bit more and don’t get a car?” I asked.
“Possibly,” he responded, “but it would have to be at least 500 shekels more.”
In this conversation, my friend and I were actively illustrating his indifference curve regarding the compensation he was looking for in his upcoming job. For example, one may accept a lower salary for a higher pension or one may accept a higher salary but no company car.
In Israel especially, an indifference curve is no small matter. As you venture through the Israeli job market, you’re going to hear a lot about tanaim (literally, ‘conditions' i.e. compensation benefits).
Tanaim refer to all the stuff you get in addition to your salary. Tanaim include, but are not limited to:
- vacation days
- a sick leave policy
- membership in a pension plan
- additional investments
- summer vacation bonus
- a company car
- and more…
Some companies give more tanaim, some give less and some give none (legally there is a minimum, but without getting into the “legalese,” there are tremendous loopholes in the law that allow employers to get around it.)
In order to ensure that you receive the compensation you deserve, it is important to create a measure of all the potential tanaim in order to understand your full compensation. Such a measurement would allow:
- a job seeker to weigh the compensation package of one job against that of another
- a new mother to measure if it is economically worth it in the short run to reenter the job market
- a worker to learn if that 45 shekels an hour he is getting is a great opportunity or a rip-off barely paying minimum wage
So how do you measure tanaim?
How can one measure one job that gives 10,000 shekels and a company car against another that offers 12,000 shekels and no car or one that offers 13,000 shekels, but no pension?
What about a job with a higher pension package and lower salary against another one that offers less of a pension, but a keren hishtalmut (a kind of tax-free savings plan)?
With so many different variables and a complicated, progressive tax system, it can be very difficult to measure a marginal shekel in take home pay, especially from so many different sources.
Introducing the Job Payoff Index
That’s why I began developing the Job Payoff Index (JPI).
The JPI is an index that takes all the general conditions that come with a job and put it into one quantifiable number that represents how much you earn from your job.
The JPI is designed to compare your take home pay, benefits, investments, and preferences into one simple number that you can use in order to compare how much a job is really worth to you.
How to use the Job Payoff Index
In order to find out the value of a potential job, download the file, answer the questions on the first tab (labeled ‘information'), and then go to the second tab to see what your average paycheck would look like and what your job payoff would be. The amount of the job payoff could be used to answer the questions we mentioned above and to make sure that a potential job falls within or beyond your indifference curve.
Please note that while the JPI is a good place to start valuing a potential job, it is far from perfect. For one, it cannot measure important factors in determining your job such as potential for growth, how nice your coworkers are, nor how interesting your job is.
If you have a suggestion to improve the Job Payoff Index or found a bug, please tell us in the comments below.
About the Author
Jonathan Degani works as a financial coordinator for the fundraising department of AMIT, an NPO that enables Israel's youth to realize their potential and strengthens Israeli society by educating and nurturing children from diverse backgrounds within a framework of academic excellence, religious values and Zionist ideals. If you have any corrections, or comments, he can be reached at email@example.com. His hope is that with the input of users, he will be able to distribute an updated version of the Job Payoff Index every 3 – 4 months or so via his blog, Shomer Shekalim.
This article is part of the 4th Annual JobMob Guest Blogging Contest, which was made possible thanks in large part to our Gold Sponsor, Jason Alba of JibberJobber. If you want Jonathan Degani to win, share this article with your friends.