Calculate your Israeli income tax using official 2026 tax brackets. Enter your gross income, credit points, and deductions to see your effective tax rate and take-home pay.
Mas Hachnasa (literally "income tax" in Hebrew) is Israel's progressive income tax system administered by the Israel Tax Authority (Rashut HaMisim). All Israeli tax residents are subject to tax on worldwide income, while non-residents are taxed only on Israel-sourced income. The tax year runs from January 1 to December 31, with annual filing due by April 30 of the following year. Israel's progressive bracket system means higher income is taxed at higher rates, ranging from 10% on the first bracket to 50% on income exceeding approximately 721,560 per year (including the 3% surtax known as "Mas Yoter"). Source: Israel Tax Authority, taxes.gov.il.
Israel adjusts its tax brackets annually based on the Consumer Price Index. For the 2026 tax year, there are seven marginal tax brackets. The first 84,120 of annual income is taxed at 10%. Income from 84,121 to 120,720 is taxed at 14%. The next tier, 120,721 to 193,800, attracts a 20% rate. Income from 193,801 to 269,280 is taxed at 31%, followed by 35% on income from 269,281 to 560,280. The 47% bracket applies to income from 560,281 to 721,560. Any income above 721,560 is subject to the top rate of 50%, which includes the 3% high-income surtax (Mas Yoter). These brackets apply to employment income and are adjusted for self-employed individuals differently. Source: taxes.gov.il, 2026 CPI adjustment estimates.
Israel uses a credit point system (Nekudot Zikui) to reduce tax liability. Each credit point is worth approximately 2,904 per year in 2026, directly reducing your tax bill. Every Israeli resident automatically receives 2.25 credit points. Women receive an additional 0.5 points. Additional credits are available for parents (1-2 points per child depending on age), new immigrants (3 points in year 1, decreasing over 3.5 years), IDF veterans, academic degree holders, and residents of qualifying development towns. These credits are non-refundable, meaning they can reduce your tax to zero but will not generate a refund on their own. Employees declare their credits via Form 101 filed with their employer.
Several legal strategies exist to minimize income tax in Israel. Pension contributions are tax-deductible up to the recognized ceiling of approximately 47,465 per month in 2026. Keren Hishtalmut (training fund) contributions provide additional tax advantages with employer contributions up to 7.5% being tax-exempt. Charitable donations to approved institutions are eligible for a 35% tax credit. Self-employed individuals can deduct business expenses including home office costs, vehicle expenses, and professional development. New immigrants (Olim) benefit from significant tax exemptions on foreign income for up to 10 years. Consulting with a licensed Israeli tax advisor (Yo'etz Mas) is recommended for comprehensive planning. Last updated: 2026.