Individual - Taxes on personal income

Last reviewed - 10 March 2024

Israeli tax residents are taxable on their worldwide income.

Non-resident individuals are subject to income tax on Israeli-source income and to capital gains tax on capital gains from assets situated in Israel (subject to special exemptions for non-residents; see Capital gains in the Income determination section for more information). Sourcing rules determine when income is to be regarded as being from an Israeli source.

Personal income tax rates

Taxation of individuals is imposed in graduated rates ranging up to 47%. Additionally, a 3% surtax applies on annual taxable income exceeding 721,560 Israeli shekels (ILS), resulting in a 50% maximum income tax rate. Non-residents are taxed at the same rates as Israeli residents. The annual tax brackets are an aggregation of the monthly brackets in force during the year, which are periodically updated for inflation. The annual bracket amounts for 2024, expressed in Israeli shekels, are as follows:

Annual taxable income (ILS) Tax on column 1 (ILS) Tax on excess (%)
Over (column 1) Not over
0 84,120 0 10
84,120 120,720 8,412 14
120,720  193,800 13,536 20
193,800 269,280 28,152 31
269,280 560,280 51,551 35
560,280  721,560 153,401 47
721,560 229,203 50

A minimum tax rate of 31% generally applies to certain classes of passive income not derived from business or employment earned by a taxpayer under age 60.

Most types of interest, dividends, and capital gains have varying, fixed rates of tax set in the Income Tax Ordinance (ITO) (see the Income determination section for more information).

Local income taxes

There are no local taxes on income in Israel.