How is reservist compensation calculated for employees?

Bituach Leumi takes your average gross income from the three months preceding service and pays one-thirtieth of that monthly average per service day. The employer pre-funds the days and is reimbursed.

How is it calculated for the self-employed?

For the self-employed the base is the most recent tax-year income reported to the Tax Authority, divided by 360 days. You can request a recalculation if current-year income is materially higher.

What is the compensation cap in 2026?

The cap sits at approximately five times the average national wage — roughly 60,000 ₪ per month of equivalent income, or about 2,000 ₪ per day.

Is the compensation taxable?

Yes. The compensation replaces wage income and is taxed exactly like wages. The grant, by contrast, is tax-exempt.

Which forms do self-employed reservists file?

Forms 502 (service confirmation) and 506 (income declaration), both submitted digitally through the Bituach Leumi reservist portal. Payment lands within four to eight weeks.

What if my employer paid less than my regular wage?

Verify that Form 100 captured regular gross income, including stable bonuses and overtime. If only base salary was used, the days were underpaid — Bituach Leumi will issue a supplement once payroll resubmits.

Reservist Compensation (Tagmul Miluim)

Reservist compensation — tagmul miluim — is the wage-replacement payment that covers the income you would have earned during reserve service. It is separate from the grant, structurally different for employees and self-employed reservists, and the source of most of the confusion we see at Yesh Cash.

What the compensation is meant to replace

The compensation is calibrated to your regular gross income in the three months preceding service. Bituach Leumi calculates a daily rate equal to one-thirtieth of that average monthly income and pays it for each service day. The cap, updated periodically, sits at five times the average national wage — a ceiling that affects only the highest earners.

How it works for salaried employees

For employees the cycle runs through the employer. The employer continues to pay the reservist their full regular wage during service, then files Forms 100 (wage declaration) and 3010 (call-up confirmation) with Bituach Leumi, which reimburses the employer for the days served. From the reservist's perspective there should be no break in the payslip and no separate action required.

Two things are worth verifying on the post-service payslip: that the days were paid at the regular gross rate (not at base salary excluding bonuses), and that the days appear on Form 106 under tagmul miluim. Bonuses and overtime that are part of the regular income mix should be included in the three-month base.

How it works for the self-employed

Self-employed reservists (osek patur, osek murshe, freelancers, company directors taking a salary) receive the compensation directly from Bituach Leumi. The cycle:

1. After service, the reservist logs into the Bituach Leumi reservist portal. 2. Forms 502 (service confirmation) and 506 (income declaration) are filed digitally. 3. Bituach Leumi calculates the daily rate based on the most recent tax-year income reported. 4. Payment is deposited within four to eight weeks.

The self-employed daily rate uses the prior tax year's reported income divided by 360. Reservists in growth phases of their business — where this year's income materially exceeds last year's — can request a recalculation against current bank statements, though approval is discretionary.

The five-times-average-wage cap

The 2026 cap sits at approximately 60,000 ₪ per month of equivalent income, translating to a daily cap around 2,000 ₪. Reservists earning above the cap will see their compensation flatten at the ceiling. The cap applies to both salaried and self-employed reservists.

Compensation vs. grant — a recurring confusion

The compensation replaces lost income and is taxed exactly like wage income (since it is wage income for tax purposes). The grant, by contrast, is a top-up tax-exempt payment tied to service days. A reservist with average earnings serving 20 days will typically receive 7,000–10,000 ₪ in compensation and a further 6,000–10,000 ₪ in grant — two separate deposits, two separate purposes.

What to do if compensation is incorrect

For employees: ask the payroll department to recheck the Form 100 income base. If they used base salary instead of regular gross, the days will be underpaid. Bituach Leumi will reissue the supplement.

For self-employed: open an inquiry in the reservist portal and attach evidence of the higher current income (year-to-date P&L from your accountant, recent bank statements). The portal accepts amended Form 506 submissions for up to 12 months after the original.

Final note

The compensation and the grant are sometimes lumped together in casual conversation as "miluim pay", but they are administratively distinct payments arriving on different cycles and with different tax treatment. Track them separately when reconciling your annual income.

— Yesh Cash Editor