Income tax
Progressive monthly tax brackets, tax credit points, the eligible pension credit and certified locality rate and cap are applied.
Transparent calculation · 2026
How Neto calculates salary
The model provides a transparent estimate for an Israeli employee with one primary employer. Important assumptions and limitations are stated explicitly.
From gross pay to the result
Four calculation layers
Mandatory deductions
National Insurance and health contributions are calculated up to the insured-income cap.
Long-term savings
Employee and employer pension, severance and education-fund deposits remain separate from take-home cash.
Annual package
Annual net cash, savings, equity, benefits and employer cost are presented as distinct values.
Source register
Active calculation constants
Every value comes from the same configuration used by the calculators. A default assumption is not presented as a legal requirement, and an estimate is not presented as a final tax rate.
Last verified2026-08-24Tax year 2026
| Constant | Value | Tax year and effective date | Source |
|---|---|---|---|
| Income taxBracket 1Official value | Up to: ₪7,010 · Rate: 10% | 2026Effective 2026-01-01 | Israel Tax Authority monthly payroll deductions booklet for 2026 |
| Income taxBracket 2Official value | Up to: ₪10,060 · Rate: 14% | 2026Effective 2026-01-01 | Israel Tax Authority monthly payroll deductions booklet for 2026 |
| Income taxBracket 3Official value | Up to: ₪19,000 · Rate: 20% | 2026Effective 2026-01-01 | Israel Tax Authority monthly payroll deductions booklet for 2026 |
| Income taxBracket 4Official value | Up to: ₪25,100 · Rate: 31% | 2026Effective 2026-01-01 | Israel Tax Authority monthly payroll deductions booklet for 2026 |
| Income taxBracket 5Official value | Up to: ₪46,690 · Rate: 35% | 2026Effective 2026-01-01 | Israel Tax Authority monthly payroll deductions booklet for 2026 |
| Income taxBracket 6Official value | Up to: ₪60,130 · Rate: 47% | 2026Effective 2026-01-01 | Israel Tax Authority monthly payroll deductions booklet for 2026 |
| Income taxHighest bracketOfficial value | Above: ₪60,130 · Rate: 50% | 2026Effective 2026-01-01 | Israel Tax Authority monthly payroll deductions booklet for 2026 |
| Income taxMonthly tax-credit point valueOfficial value | ₪242 | 2026Effective 2026-01-01 | Israel Tax Authority monthly payroll deductions booklet for 2026 |
| Calculator assumptionPublic-default tax-credit pointsDefault assumption | 2.25 | 2026Effective 2026-01-01 | Employee form 101 and application for tax benefits |
| National InsuranceMonthly income thresholdsOfficial value | Reduced rate up to: ₪7,703 · Income cap: ₪51,910 | 2026Effective 2026-01-01 | National Insurance rates and amounts for salaried workers |
| National InsuranceEmployee ratesOfficial value | Reduced: 1.04% · Full: 7% | 2026Effective 2026-01-01 | National Insurance rates and amounts for salaried workers |
| Health insuranceEmployee ratesOfficial value | Reduced: 3.23% · Full: 5.17% | 2026Effective 2026-01-01 | National Insurance rates and amounts for salaried workers |
| National InsuranceEmployer ratesOfficial value | Reduced: 4.51% · Full: 7.6% | 2026Effective 2026-01-01 | National Insurance rates and amounts for salaried workers |
| Calculator assumptionDefault pension and severance ratesDefault assumption | Employee: 6% · Employer: 6.5% · Severance: 8.33% | 2026Effective 2026-01-01 | Israel Tax Authority monthly payroll deductions booklet for 2026 |
| PensionEmployee-deposit tax creditOfficial value | Income cap: ₪9,700 · Eligible contribution: 7% · Credit rate: 35% | 2026Effective 2026-01-01 | Israel Tax Authority monthly payroll deductions booklet for 2026 |
| PensionEmployer-deposit exemptionOfficial value | Salary cap: ₪34,423 · Rate: 7.5% | 2026Effective 2026-01-01 | Israel Tax Authority monthly payroll deductions booklet for 2026 |
| SeveranceAnnual exempt-deposit capOfficial value | ₪45,600 | 2026Effective 2026-01-01 | Israel Tax Authority monthly payroll deductions booklet for 2026 |
| Education fundCap and default ratesDefault assumption | Income cap: ₪15,712 · Employee: 2.5% · Employer: 7.5% | 2026Effective 2026-01-01 | Israel Tax Authority monthly payroll deductions booklet for 2026 |
| Equity compensationSection 102 capital-route estimateEstimate | 25% | 2026Effective 2026-01-01 | Israel Tax Authority position on employee shares and options under Section 102 |
Annual control
Tax-year rollover checklist
- Locate the new official publication and record its tax year and effective date.
- Update only the central configuration, including source URLs and the verification date.
- Regenerate the reference cases and check non-default profiles as well.
- Pass every release gate before changing the public verification stamp.
Public verification
40 frozen test cases
This is Neto's public self-verification: every change to tax brackets, ceilings or formulas is checked against 40 reference results and 7 synthetic payroll cases from an external system. A failed case blocks release.
These checks are not an independent accountant or tax-adviser opinion and do not replace professional review of an individual case.
View all test casesMarket benchmark
How comparison groups are built
Current reports are matched by occupation, occupation family, seniority, experience, region, industry, company size, education, study field, work model and management scope. The cohort broadens only when the exact group is too small.
A group is shown only with at least 10 accepted current reports and sufficient salary diversity. Values and percentiles are rounded, sample size is shown as a band and target scenarios never enter paid-market data.
Primary sources
What the model uses
Israel Tax Authority monthly payroll deductions booklet for 2026 National Insurance rates and amounts for salaried workers Employee form 101 and application for tax benefits Israel Tax Authority position on employee shares and options under Section 102 Israel Tax Authority directive on the tax event for RSU awards Israel Tax Authority company-car use-value calculator Israel Tax Authority: combat-reserve tax credits for 2026-2027 Israel Tax Authority: guide for discharged soldiers and national-civil service graduates Israel Tax Authority: tax benefit for an academic degree or professional certificate (form 119) Israel Tax Authority: eligible localities and tax benefits for 2026 Israel Tax Authority: eligible-locality residency certificate application (form 1312) Israel CBS classifications and code lists
Test the assumptions on your salary
Tax credits and contribution rates can be adjusted in the calculator.