What is the income tax rate in Israel?
AI Answer
The income tax rate in Israel is progressive, meaning higher earners pay a larger percentage. For a $75,000 (around 279,000 ILS) annual salary, your effective income tax rate would be approximately 29.6%. This includes national income tax, but not national insurance or health insurance contributions.
Let's break that down: the first ILS 7,010 per month (approx. $1,880) is taxed at 10%, up to ILS 10,060 (approx. $2,700) at 14%, and so on, reaching 31% for income between ILS 16,130 and ILS 22,200 per month. The top marginal rate for income over ILS 58,190 per month (approx. $15,600) is 47%. There's also a 3% surtax on annual income exceeding ILS 698,280 (approx. $187,500).
Beyond income tax, you'll also pay National Insurance (Bituach Leumi) and Health Insurance (Bituach Briut). These add another 3.1%-12% of your income, depending on your earnings. So, your total deductions will be higher than just the income tax.
When budgeting for Israel, factor in these additional contributions. While the income tax itself is moderate, the combined burden can be substantial, so it's wise to consider the all-in percentage of your gross salary you'll actually take home.