Israel's income tax brackets revised due to inflation

Income tax brackets credit fizkes Shutterstock

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Israelis started paying income tax at the lowest rate of 10% from NIS 6,450 per month in 2022 will now pay 10% income tax from NIS 6,790.

Israel's income tax brackets, which are linked to the Consumer Price Index, were revised upwards from January 1, 2023 to take into account inflation of more than 5% over the past year. Consequently, most Israelis will find themselves paying between an estimated NIS 700 and NIS 5,000 less tax during 2023, depending on their annual income.

Israelis started paying income tax at the lowest rate of 10% from NIS 6,450 per month in 2022 will now pay 10% income tax from NIS 6,790. The 14% tax bracket is rising from NIS 9,240 to NIS 9,730 and the 20% bracket is rising from NIS 14,840 to NIS 15,620. The 31% tax threshold will rise from NIS 20,620 to 21,710, and the 35% threshold will rise from NIS 42,910 to NIS 45,180. The uppermost 50% threshold (including 3% surtax) will rise from NIS 55,000 to NIS 58,190.

Published by Globes, Israel business news - en.globes.co.il - on January 11, 2023.