Tax brackets in Israel

In Israel, the progressive income tax method is adopted. Income tax in Israel is the equivalent of the French IR. (income tax).
Progressive taxation means that the higher an individual's gross taxable income, the higher the amount of tax he or she will have to pay.

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• Taxable income (i.e. a person's income after deductions, offsets and exemptions) is divided into "tax brackets", and each tax bracket is taxed at a different rate. These brackets represent the tax brackets.
• The idea behind the tax brackets method is that the higher the individual's income, the higher the amount of taxation, while rigorously preserving the fact that as long as an individual earns more in gross terms, he or she will also earn more in net terms.
• In addition, there is a distinction between income generated by the individual's own work and income created by another source that is not the individual's own work (e.g. rental income, interest or dividends). As a result, tax brackets and amounts differ between these two types of income:
  • Active" income, derived from the taxpayer's direct work. This is generally income from salaries or self-employment (Ossek mourche or Ossek patour)
  • Passive" income, requiring no direct involvement on the part of the taxpayer.

Israel's tax bracket amounts are updated and change from year to year.

Below are the tax bracket tables in Israel for the 2021 tax year.

The tax brackets for active income are :

The tax brackets for passive income are :

See also: Understanding Israel's tax system.