Below are Israel's 2026 income tax brackets in both monthly and annual shekels, the updated credit point (nekudat zikui) value, and the National Insurance (Bituach Leumi) ceilings. All figures are drawn from the Israel Tax Authority (Rashut HaMisim) and Bituach Leumi annual updates published on gov.il.
2026 Israel Income Tax Brackets — Monthly & Annual
Israel taxes individual employment and business income at progressive marginal rates. Brackets are legislated annually; the 2025 brackets were carried into 2026 without CPI indexation.
| Monthly income (₪) | Annual income (₪) | Marginal rate |
|---|---|---|
| 0 – 7,010 | 0 – 84,120 | 10% |
| 7,011 – 10,060 | 84,121 – 120,720 | 14% |
| 10,061 – 16,150 | 120,721 – 193,800 | 20% |
| 16,151 – 22,440 | 193,801 – 269,280 | 31% |
| 22,441 – 46,690 | 269,281 – 560,280 | 35% |
| 46,691 – 60,130 | 560,281 – 721,560 | 47% |
| 60,131+ | 721,561+ | 50%* |
*Top rate = 47% marginal + 3% high-income surcharge (Mas Yoter) on income above ₪721,560/year (₪60,130/month). The surcharge was expanded from 2025 to apply more broadly to passive income as well.
2026 Credit Point Value (Nekudat Zikui)
The credit point is a direct reduction of income tax owed — not a deduction. The Ministry of Finance updates the value each January in line with the Consumer Price Index.
- 2026 value: ₪248 per month = ₪2,976 per year per credit point (Rashut HaMisim, January 2026 update).
- 2025 value: ₪242 per month = ₪2,904 per year (for reference).
Standard credit-point entitlements
- Every Israeli resident: 2.25 points
- Women: +0.5 point (total 2.75)
- New immigrants (Olim Hadashim): +3.0 in year 1 (18 months), +2.0 in year 2, +1.0 in year 3 — on top of the standard 2.25
- Returning residents (Toshav Chozer): similar staged benefit
- Children under 18: 1–2.5 points to a working parent depending on age
- Discharged soldiers / National Service: 1–2 points for up to 3 years post-discharge
- Academic degrees: 1 point (bachelor's) or 0.5 point (master's), for one year
Example: A standard resident (2.25 points) reduces annual tax by 2.25 × ₪2,976 = ₪6,696 in 2026. An oleh in year 1 with 2.25 + 3.0 = 5.25 points saves ₪15,624.
2026 Bituach Leumi (National Insurance) Rates & Ceiling
Bituach Leumi is separate from income tax and applies on top of it. The 2026 ceiling and split points align with the annual update to the average national wage.
Employees
- Reduced band: up to ₪7,522/month — 3.5% (NI + health together on employee side)
- Full band: ₪7,522 – ₪51,890/month — 12% (employee)
- Above ₪51,890/month: exempt from Bituach Leumi (ceiling reached)
Self-employed (Osek Murshe / Osek Patur)
- Reduced band: up to ₪7,522/month — 5.97%
- Full band: ₪7,522 – ₪51,890/month — 17.83%
Rates and ceilings source: Bituach Leumi, effective January 2026.
Capital Gains, Dividends & Passive Income (2026)
- Interest — unlinked deposits: 15%
- Interest — CPI-linked / foreign currency: 25%
- Dividends: 25% (30% for a "substantial shareholder" holding ≥10%)
- Capital gains on securities: 25% (30% substantial shareholder)
- Real estate — Mas Shevach on real gain: 25%
- Rental income (residential): ₪5,654/month exempt (2026 ceiling); above that, choose 10% flat-rate track or marginal rates with deductions
How to Calculate Your Israeli Income Tax — Worked Example
An employee earning ₪25,000/month = ₪300,000/year in Israel in 2026 (standard resident, 2.25 credit points):
- Income tax on ₪300,000 using the brackets:
- 10% × ₪84,120 = ₪8,412
- 14% × ₪36,600 = ₪5,124
- 20% × ₪73,080 = ₪14,616
- 31% × ₪75,480 = ₪23,399
- 35% × ₪30,720 = ₪10,752
- Gross income tax = ₪62,303
- Less 2.25 credit points × ₪2,976 = –₪6,696
- Net income tax = ₪55,607/year (≈ ₪4,634/month)
- Plus Bituach Leumi (employee): roughly ₪2,410/month at this salary
Oleh Chadash — How the 10-Year Exemption Interacts with the Brackets
New immigrants are exempt from Israeli tax on foreign-source income and capital gains for 10 years after Aliyah. That means the brackets above only apply to your Israeli-source income during the exemption window. For a deeper look see our 10-year exemption guide and, if you're American, our US expat tax in Israel pillar.
Common Questions
What is a credit point worth in Israel in 2026?
₪248 per month, or ₪2,976 per year, per credit point. This value is updated annually by the Ministry of Finance in line with the CPI.
Did Israeli tax brackets change for 2026?
No — the government froze the 2025 brackets for 2026 (no CPI indexation). The high-income surcharge was expanded from 2025 to apply more broadly to passive income.
What is the top marginal tax rate in Israel?
50% — 47% marginal income tax plus the 3% high-income surcharge on annual income above ₪721,560.
Where can I verify these figures?
Official sources: Rashut HaMisim (Israel Tax Authority) and Bituach Leumi. Bracket law: sections 121–121B of the Income Tax Ordinance.
Need help modelling your 2026 Israeli tax position — including the interaction with US, UK or French tax and the 10-year exemption? Book a free initial consultation.