How Israeli Tax Brackets Work — A 2026 Guide
Israel uses a progressive income tax system: different slices of your salary are taxed at different rates. Understanding which slice falls into which bracket clarifies why a salary increase doesn't always feel like a corresponding net jump — and why "what's my tax rate?" doesn't have a single answer.
The 2026 monthly brackets
For a regular Israeli employee in 2026, the marginal income tax rates on monthly salary are:
| Monthly income (NIS) | Rate |
|---|---|
| Up to ₪7,010 | 10% |
| ₪7,011 – 10,060 | 14% |
| ₪10,061 – 19,000 | 20% |
| ₪19,001 – 25,100 | 31% |
| ₪25,101 – 46,690 | 35% |
| ₪46,691 – 60,130 | 47% |
| Above ₪60,130 | 50% (47% + 3% surtax) |
Marginal vs. effective — what you actually pay
The marginal rate is the rate paid on your last shekel earned. The effective rate is what you pay on average across your whole salary. They're rarely equal — the effective rate is always lower, because the lower brackets contribute lower-rate slices to the total.
The brackets stack up like this:
- First ₪7,010 × 10% = ₪701
- Next ₪3,050 × 14% = ₪427
- Next ₪8,940 × 20% = ₪1,788
- Last ₪1,000 × 31% = ₪310
Total raw tax: ₪3,226, which is about 16% of the gross. The marginal rate is 31% (the bracket the last shekel falls into), but the effective rate is roughly 16%.
Credit points reduce the bill
After the bracket calculation, every Israeli resident gets nekudot zikuy (credit points) that reduce the tax owed. In 2026, each credit point is worth ₪242 per month — or ₪2,904 per year.
Point allocation for the most common categories:
| Category | Points/month |
|---|---|
| Resident base — male | 2.25 |
| Resident base — female | 2.75 |
| Single parent | +1 |
| Married with a non-working spouse (conditions apply) | +1 |
| Each child age 0 (birth year) | +2.5 |
| Each child ages 1–2 | +4.5 |
| Each child age 3 | +3.5 |
| Each child ages 4–5 | +2.5 |
| Each child ages 6–17 (mother / father) | +2 / +1 |
| Each disabled child | +2 |
| Oleh Hadash, months 1–18 / 19–30 / 31–42 | +3 / +2 / +1 |
| Recent BA / MA / direct PhD graduate | +1 / +0.5 / +1 |
| Recently discharged soldier (within 3 years) | +2 |
| Combat reservist, ≥30 / ≥40 / ≥50 days | +0.5 / +0.75 / +1+ |
Points stack. A female parent of a 2-year-old and a 7-year-old gets 2.75 (base) + 4.5 (age 2) + 2 (age 7) = 9.25 points — that's ₪2,238/month off her income tax bill. A recent male oleh hadash in his first year has 2.25 + 3 = 5.25 points, worth ₪1,270/month.
For our ₪20,000 example, a single male's tax becomes:
- Raw tax: ₪3,226
- Less 2.25 credit points × ₪242: ₪544.50
- Tax owed: ₪2,681.50 — effective rate ~13.4%
Bituach Leumi and health tax stack on top
Income tax is only one piece. The same monthly salary also bears national insurance (Bituach Leumi) and health tax. Together they reach about 12% on the slice above the reduced-rate threshold of ₪7,703/month, and they cap out at a monthly income of ₪51,910. They're computed on the same taxable base as income tax — full salary plus taxable benefits like meal vouchers, company car, and Keren Hishtalmut spillover.
Why your raise might disappoint
If you cross from one bracket into the next, only the new income above the threshold is taxed at the higher rate — your previous slices are unaffected. But the take-home jump can still feel smaller than expected if you also cross the Bituach Leumi reduced-rate threshold, lose a credit-point benefit (e.g. a degree's first year ends), or your pension/Keren Hishtalmut contributions consume more of the raise.
The calculator on this site shows the bracket breakdown and every deduction line so you can see exactly where each shekel of tax — and your net — comes from.