Israel · Tax Year 2026

Income Tax — Employees

Israel levies progressive income tax on employees. Every employer withholds tax monthly (ניכוי במקור) and remits it to the Tax Authority on behalf of the employee.

How the Taxable Base is Calculated

The taxable base includes all salary payments and employer benefits. Employee pension contributions are deducted from the base before tax brackets are applied.

Gross salary + benefits₪X

− Employee pension contribution−₪Y

= Taxable income₪(X−Y)

2026 Tax Brackets

Monthly income	Annual income	Rate
₪0 – ₪7,010	₪0 – ₪84,120	10%
₪7,011 – ₪9,730	₪84,121 – ₪116,760	14%
₪9,731 – ₪15,620	₪116,761 – ₪187,440	20%
₪15,621 – ₪21,710	₪187,441 – ₪260,520	31%
₪21,711 – ₪45,140	₪260,521 – ₪541,680	35%
₪45,141 – ₪58,190	₪541,681 – ₪698,280	47%
₪58,191+	₪698,281+	50%

Brackets are applied progressively — only the income within each band is taxed at that band's rate.

Credit Points (נקודות זיכוי)

Each credit point reduces the tax owed (not taxable income) by ₪242/month. Every Israeli resident starts with 2.25 base points. Additional points are awarded for personal circumstances.

Category	Points
Israeli resident (base)	2.25
Woman	+0.5
New immigrant — years 1–2	+3.5
New immigrant — year 3	+2.5
Returning resident	+1.0
Priority area (tier 1)	+0.5
Priority area (tier 2)	+1.0
Priority area (tier 3)	+1.5
Married, spouse not earning	+0.5
Single parent	+1.0
Each child under age 5	+2.5
First child age 5–12 / each additional	+2.5 · +1.0
Each child age 13–17	+0.5
First year after military / national service	+2.0

Final Calculation

income tax = tax from brackets

− (credit points × ₪242)

minimum = ₪0 (never negative)

Source: kol-zchut.org.il · Tax year 2026 · For guidance only — consult a licensed tax advisor for binding advice.