DoubleTaxationTaxes on salary: Israel preliminary data
How much income tax and social contributions are paid on a salary in Israel, what a sole proprietor and a company pay, and which special regimes exist. Preliminary data.
Preliminary data: headline rates from official sources and bulletins of international organisations, without reliefs or special rules; being refined.
Calculation for a gross salary of €60,000 per year
| Gross salary | ₪223,707 ≈ €60,000 |
|---|---|
| Income tax | ₪27,599 ≈ €7,402 |
| Employee contributions | ₪19,923 ≈ €5,343 |
| Take-home pay | ₪176,185 ≈ €47,254 |
| Employer contributions and payroll taxes | ₪14,145 ≈ €3,794 |
| Employer's labour cost | ₪237,852 ≈ €63,794 |
Only some of the country's direct taxes and levies are counted: income tax on wages and compulsory contributions. Not counted: property and real-estate taxes; taxes on dividends, interest and other investment income; inheritance and gift taxes; indirect taxes such as VAT, excise and customs duties.
Taxes for sole proprietors and companies
Tax and contributions on the profit for a year; expenses are 10% of revenue, the company pays its profit out to the owner. Reliefs and local taxes are not included.
| Annual revenue | €30,000 ₪111,854 | €60,000 ₪223,707 | €120,000 ₪447,414 |
|---|---|---|---|
| Sole proprietor | ₪12,794 12.7 % | ₪49,845 24.8 % | ₪149,626 37.2 % |
| Company | ₪42,532 42.3 % | ₪85,065 42.3 % | ₪170,129 42.3 % |
Special tax regimes
New immigrants (olim) and senior returning residents — foreign-source income exemption
For people relocating · rate 0.0 %
Who: New immigrants, immigrant citizens and residents returning after 10+ years abroad.
Income produced abroad is exempt from Israeli tax for 10 years after aliyah or return; olim also get extra credit points (3 points for 18 months, then 2, then 1) on Israeli income.
Legal basis: Income Tax Ordinance s.14 (foreign income) and s.35 (credit points for olim)
Encouragement of Aliyah and Return to Israel (Temporary Provision) — exemption on Israeli earned income 2026-2030
For people relocating · rate 0.0 %
Who: New immigrants and senior returning residents who became Israeli residents between 5 Nov 2025 and 31 Dec 2026 (with a 2016-2025 presence test); cancelled retroactively if residence ends in 2028-2029 with under 75 days in Israel.
Income from personal effort (salary, business, self-employment) earned in Israel is exempt up to an annual ceiling: ILS 600,000 (2026), 1,000,000 (2027 and 2028), 350,000 (2029), 150,000 (2030); income above the ceiling and passive income are taxed normally. Comes on top of the foreign-income exemption.
Tax residence
The tax residence check does not cover Israel yet.
Assumptions
- Calculated with the OECD Taxing Wages methodology: income tax including local taxes plus employee social security; single person without children, tax year 2026, ECB rate of 2 January 2026.
- Exchange rate: 1 EUR = 3.72845 ILS (IMF representative exchange rate, Israeli new shekel (set from Bank of Israel representative rate), 2026-01-02) ↗
Sources
- Israel Tax Authority — employers notice 30 Mar 2026 on 2026 income tax brackets (Economic Efficiency Law 2026, Part E)
- Israel Tax Authority — monthly withholding booklet from January 2026 (credit point value, surtax threshold)
- National Insurance Institute (Bituach Leumi) — rates for salaried employees
- National Insurance Institute — rates for self-employed 2026
- Invest in Israel (Ministry of Economy) — Paying taxes
- Ministry of Aliyah and Integration — Guide for the New Immigrant, 15th ed. (2022)
- IMF — representative exchange rates, January 2026
- Israel Tax Authority — Income Tax Circular 07/2026 on the temporary aliyah and return law
Data checked: 2026-11-08. An indicative calculation for a typical case. Not tax advice.