Israel Tax 

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Israel Tax

With more than 20 years’ experience in the front line of international payroll providers, Bradford Jacobs ensure our clients comply with every level of tax and employment law across the globe, including Israel where language requirements to use Hebrew as well as English create particular issues.

Dealing with employment, tax and payroll from overseas is always a tricky process and poses complications that demand expert guidance, especially so when establishing an international presence in Israel.

This guide helps explain those complexities and how Bradford Jacobs can assist your company in dealing with them.

Personal Tax Rates in Israel

From (in ILS and US$) To Tax Rate:

0 75,960 ($23,200) 10%

75,960 108,960 ($33,290) 14%

108,960 174,960 ($53,445) 20%

174,960 243,120 ($74,266) 31%

243,120 505,920 ($154544) 35%

505,920 651,600 ($199,000) 47%

Over 651,600 50%

Israel Individual Tax Rules

• Tax year runs from January 1 to December 31

• Returns must be filed by April 30 the following year, or May 31 if filed online

• Employees need not file returns if withholding tax is taken at source, unless they exceed specified salary limits

• Expatriates subject to withholding tax can file individual returns on years of arrival and departure to benefit from possible tax allowances

• Married couples may file joint or individual tax returns

• Israeli residents (domiciled for 183 day minimum in a calendar year) pay tax on worldwide income

Employers/Employees Social Security and Statutory Contributions

All residents over 18 years old must make National Insurance contributions covering old age and survivors, long term care, disability, accident and injury, work injury, maternity, children and unemployment. Different rates apply to different levels of income. Employers must withhold employees’ National Insurance contributions and remit them to the National Insurance Institute.

Monthly income up to ILS6331 (US$1,933)

Type Employer Employee Total

National Insurance 3.55% 0.40% 3.95%

Health Levy 0.00% 3.10% 3.10%

Total 3.55% 3.50% 7.05%

Income up to ILS44,020 (US$13,446)

Type Employer Employee Total

National Insurance 7.60% 7.00% 14.60%

Health Levy 0.00% 5.00% 5.00%

Total 7.60% 12.00% 19.60%

Israel Corporation Tax

Corporation Tax in Israel remained at 23% in 2021, although companies that qualify under the Encouragement of Capital Investments Law can apply for reduced rates.

Avoid risks – make the right move

Israel’s tax requires expert advice and guidance for incoming foreign companies. Businesses cannot risk being behind with their filing and returns or face sanctions and fines. Don’t waste time worrying – contact Bradford Jacobs now.