Keren Meshulam Executive Severance Israel 2026 Calculator
Keren Meshulam (supplementary severance fund) used for Israeli executives. Employer contributes up to 8.33%/month of salary above ₪40K cap (otherwise basic pension). Amounts tax-deferred during employment, taxed at marginal rate at withdrawal (or capital gains 25% if rollover to annuity).
Severance vs Meshulam
Basic severance: 8.33% × salary up to ₪40K. Meshulam: 8.33% × salary above ₪40K. Both employer contributions, tax-deferred to employee.
Tax Treatment
During employment: tax-deductible to employer + not taxable to employee. At withdrawal: marginal income tax unless rolled to annuity (then 25% capital gains).
Rollover Strategy
Roll severance lump-sum to annuity vehicle within 60 days of termination = 25% capital gains tax + tax-deferred growth. Skipping rollover = full marginal rate on lump-sum.
Source and Disclaimer
Israel Tax Authority + Capital Markets Authority. 8.33% rate set by law (1/12 of annual salary). Verify current cap with payroll provider.
Source: Israel Tax Authority, Capital Markets Authority. Last updated: May 2026.