Calculation Steps
- Step 1: Sum all income from all sources (salary, business, rent, investments)
- Step 2: Deduct allowable deductions (pension contributions, NI premiums, business expenses)
- Step 3: Calculate tax on remaining taxable income using the bracket table
- Step 4: Subtract tax credits (credit points, donation credits, pension credits)
- Step 5: Add surtax if total income exceeds ₪721,560
- Step 6: Subtract tax already paid (withholding, advances)
- Step 7: Result = tax due (or refund)
Complete Example
Employee, married, 2 children (ages 4 and 9):
Gross salary: ₪360,000
Pension deduction (7%): −₪25,200
NI deduction (52% of NI): −₪12,000
Taxable income: ₪322,800
Tax per brackets: ~₪72,930
Credit points (2.25 + 2.5 + 1.0 = 5.75): −₪16,698
Net tax: ₪56,232 (15.6% effective rate)
Important Note: The information on this website is for general informational purposes only and does not constitute professional tax advice. Consult a qualified tax advisor before making financial decisions.