Israel Income Tax Calculator

Frequently Asked Questions

What is the income tax rate in Israel?

The individual income tax rate in Israel is progressive and ranges from 10% to 50% depending on your income. This income tax calculator can help estimate your average income tax rate and your salary after tax.

How many income tax brackets are there in Israel?

The income tax system in Israel has 7 different tax brackets. For more details, check out our detail section.

Israel Income Tax Brackets and Other Information

The income tax system in Israel is a progressive tax system. This means that your income is split into multiple brackets where lower brackets are taxed at lower rates and higher brackets are taxed at higher rates. Tax rates range from 10% to 50%.

There are no standard deductions with a standard fixed amount that exists in all scenarios. However, a personal allowance does exist in the form of a tax credit that varies a little bit according to your filing status. This tax credit helps to directly lower your income tax.

Non-residents are subject to the same tax brackets and rates, but are not eligible for any personal tax credits.

Under certain circumstances, individual non-residents may be conferred special statuses. One of which is the "Foreign Expert" status. One benefit of this special status, among others, is the ability to deduct additional living expenses so that your taxable income is lower. Another is the "Approved Specialist" status. This status includes the benefits of the "Foreign Expert" status, for a limited time period, and most crucially, allows a maximum cap of 25% on the income tax rate for a period of three years with a possibility of further extensions up to five years.

Lastly, many additional tax benefits exist for new immigrants and returning residents. If you qualify, under a strict set of definitions and criteria, benefits include being exempt from Israeli taxation for a period of ten years.

Social Security in Israel

Social security in Israel consists of the national insurance and health insurance.

Contribution rates to the national insurance vary from 0.4% to 7% for residents and 0.04% to 0.87% for non-residents. The exact rate depends on your income and a maximum cap exists on the applicable income.

For health insurance, contribution rates for residents vary from 3.1% to 5% depending on your income. Note that non-residents are not subject to health insurance contributions.

Resident status and income tax in Israel

Residents taxpayers are subject to income tax on their worldwide income while non-resident taxpayers are subject to income tax on only their Israeli-sourced income.

Individuals are classified as residents for tax purposes if their "center of life" is located in Israel. The process for determining one's "center of life" is not straightforward as many factors, among a long list, are reviewed and each individual is considered on a case by case basis. Some of these factors may include staying in Israel for at least 183 days in a calendar year or staying in Israel for 30 days in the current calendar year but having stayed at least 425 days during the most recent three year period.

Sources:

• Israel Tax Authority
• Israel Government Services and Information
• National Insurance Institute

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Income Tax Calculator Disclaimer

• Tax situations vary widely and calculations can get very complex. This income tax calculator only provides an estimate according to the most common scenarios for salary (standard employment income) that comes from an employer. If you are self-employed, your taxes might differ.
• There may be additional deductions, credits, exemptions, allowances, reliefs, etc depending on many factors. Some factors are about your family such as the number of dependents, children, relatives, parents, etc. Other factors may include mortgage payments, property depreciation, charitible donations, additional voluntary retirement contributions, etc. Whether or not you are handicapped and/or disabled may also sometimes be an additional factor.
• Depending on region and jurisdiction, salary bonuses may be treated and taxed differently from standard salary. Additionally, some cities may have city specific income tax.
• This income tax calculator only estimates income tax. It does not consider other taxes like property tax, self-employment tax, capital gains tax, dividend tax, etc.
• Income tax calculators from other sites may show slightly different numbers due to different deductions/credits being included or they are based on data from a different year.
• Investomatica is not a tax advisor. While we try our best to stay up to date with changes in tax codes, we make no guarantee our income tax calculator will always be accurate. Generally, we review changes once a year. If you notice a major miscalculation or error with our income tax calculator (most likely caused by a typo somewhere), feel free to direct message us on twitter and let us know. However, if you have specific tax questions, please consult a licensed tax professional.