Israel Keren Hishtalmut (Study Fund) Calculator 2026
Calculate Keren Hishtalmut (קרן השתלמות, Study Fund) contributions for 2026 — Israel's most tax-efficient employee savings vehicle. Employer 7.5% + employee 2.5% of monthly salary up to ceiling ILS 15,712. Tax-free withdrawals after 6 years. Returns ~5-8% annual historic. Treated as bonus by employers — voluntary not mandatory.
Keren Hishtalmut Basics
Voluntary employer-sponsored savings vehicle. Employer 7.5% + employee 2.5% = 10% total of monthly salary, capped at ILS 15,712 (2026; verify with Tax Authority). Contributions are pre-tax for income-tax purposes; tax-free withdrawals after 6 years of vesting. The most powerful tax-advantaged savings in Israel — significantly better than pension funds for liquid medium-term savings.
Tax Treatment
Contributions: pre-tax — saves income tax + Bituach Leumi (~30-50% combined). Capital gains within fund: tax-free during holding period. Withdrawal after 6 years: completely tax-free. Withdrawal before 6 years: subject to 15-25% capital gains tax. Some emergency early-withdrawal options preserve tax-free status (medical, disability, retirement) — verify with fund.
Ceiling and Tax Optimization
ILS 15,712/month salary cap = ILS 188,544 annual covered salary. 10% × ILS 188,544 = ILS 18,854 maximum tax-advantaged contribution per year. High earners exceed cap on Keren Hishtalmut alone — explore additional pension (kupat gemel le-pitsuyim) and provident fund (kupat gemel le-haskhanot) for additional tax-advantaged savings. Salary above ceiling can still contribute to fund but loses tax advantage.
Withdrawal Strategies
After 6 years vested, full withdrawal is tax-free. Strategies: (1) Hold to maximize compound growth, then withdraw for education / sabbatical / home down-payment. (2) Pension funds at retirement age. (3) Roll into private retirement vehicle to defer withdrawal further. Some funds offer 'segment vesting' — vintage by year, so earliest contributions vested first while newer contributions still vesting. Allows ongoing partial withdrawals.
Sources: Israel Tax Authority, Capital Markets Authority, Israeli Ministry of Finance. Last updated: May 2026.
Frequently Asked Questions
What is Keren Hishtalmut?
Voluntary Israeli employee savings vehicle. Employer 7.5% + employee 2.5% of monthly salary up to ILS 15,712/month cap. Pre-tax contributions, tax-free withdrawals after 6 years vesting. The most tax-efficient liquid savings vehicle in Israel.
How long until withdrawal is tax-free?
6 years from first contribution. Each subsequent monthly contribution has its own 6-year clock. Most funds use segment-vesting — earliest contributions become eligible first. Early withdrawal before 6 years: 15-25% capital gains tax.
What is the salary cap for tax advantage?
ILS 15,712/month for 2026 (verify with Tax Authority for exact figure). Contributions on salary above cap don't get tax advantages but can still be invested. Annual covered salary cap = ILS 188,544; max annual contribution at 10% = ILS 18,854.
Is Keren Hishtalmut better than a pension fund?
For liquid medium-term savings: yes — pension funds lock until retirement (62F/67M), Keren Hishtalmut unlocks after 6 years. For retirement specifically: complementary, not replacement. Most Israeli professionals use both — pension for retirement, Keren Hishtalmut for medium-term needs.
Can I withdraw early under hardship?
Yes — some special circumstances preserve tax-free status: medical emergency, disability, retirement, death of beneficiary. Each fund has its own rules; verify before assuming. Otherwise early withdrawal = 15-25% capital gains tax on growth.