Current Tax Brackets
Israel uses a progressive income tax system where higher income is taxed at higher rates. The tax brackets are updated periodically and apply to all Israeli tax residents on their worldwide income.
| Monthly Income (ILS) | Tax Rate |
|---|---|
| 0 - 7,010 | 10% |
| 7,010 - 10,060 | 14% |
| 10,060 - 16,150 | 20% |
| 16,150 - 22,440 | 31% |
| 22,440 - 45,180 | 35% |
| 45,180 - 58,190 | 47% |
| 58,191+ | 50% |
Surtax on High Earners
A 3% surtax applies to annual taxable income exceeding 721,560 ILS, bringing the maximum effective rate to 50%. Additionally, since 2025, a 2% surtax applies to capital-source income (dividends, interest, rental income, capital gains) above the same threshold.
How to Calculate Your Tax
The progressive system means you pay each rate only on the income within that bracket. For example, if you earn 20,000 ILS monthly, you pay 10% on the first 7,010, 14% on 7,011-10,060, 20% on 10,061-16,150, and 31% on 16,151-20,000.
Important Note: It is recommended to consult a certified public accountant or qualified tax advisor regarding your specific situation.