What are the personal income tax brackets and rates in Israel for 2026?

The Israeli individual rate structure is stable even though the exact income bands move with inflation. For 2026 the marginal rates are 10%, 14%, 20%, 31%, 35%, and 47%, applied in ascending slices so that only the income falling within each band is taxed at that band's rate. As an approximate guide to the annual bands, the 10% rate covers income up to about NIS 84,000, the 20% band reaches roughly NIS 194,000, the 35% band extends to around NIS 560,000, and income above that is taxed at 47%. On top of this, Section 121B imposes a 3% surtax on total annual income above a high threshold of roughly NIS 721,000, which lifts the effective top marginal rate to 50%. Residents are taxed on their worldwide income, while non-residents are taxed only on income sourced in Israel.

Two features change the real bill for a foreigner. First, passive income such as rent, interest, and dividends does not enjoy the low starting brackets: it is generally taxed from a 31% floor for taxpayers under 60, so the graduated 10% to 20% rates apply mainly to earned income from work or business. Second, personal credit points (nekudot zikui) are subtracted from the calculated tax, and every resident receives a baseline number of points that shelters a band of income entirely, with additional points for children and for new immigrants. New immigrants also benefit from a ten-year exemption on foreign-source income under Section 14 of the Ordinance. National Insurance and health contributions are charged separately on top of income tax, and because the thresholds are re-indexed each year you should confirm the current figures before filing or planning.

From the full guide: Israeli Income Tax for Non-Residents

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