Business Feasibility Calculator

Build a realistic monthly income-and-expense forecast: how many customers you expect, the average transaction, and against them all the fixed costs (rent, salaries, materials, marketing, insurance, accountant). If net income (after VAT, income tax and National Insurance) is higher than expenses, the business is profitable. It's also important to calculate the break-even point: how many customers per month you need just to cover costs. This calculator does all the maths automatically.

A self-employed person (Osek) pays income tax (Mas Hachnasa) on annual profit according to brackets (10% up to 50%), less credit points (about 2.25 for a resident, roughly ₪2,904 per point per year). On top of that they pay National Insurance and health tax (Bituach Leumi) — about 5.97% on the lower part of income and about 17.83% above roughly ₪7,522 per month. Overall the tax burden at a medium income is usually 25%–35% of profit. Note: in the first year there are sometimes reliefs, and advance payments are set by estimate.

The break-even point is where revenue exactly covers expenses — no profit and no loss. It's measured two ways: how many customers per month you need to cover fixed costs, and how many months it takes to recoup the initial setup investment. Below break-even the business loses money; above it, it starts to profit. The lower your break-even, the less risky the business.

An Osek Murshe (VAT-registered dealer) charges VAT (Ma'am, 18% as of 2026) from customers and passes it to the state — it's not part of their profit. In return they offset the input VAT paid on business expenses. An Osek Patur (exempt dealer, turnover up to about ₪120,000 a year) doesn't charge VAT but also can't offset it. In the calculator you can choose whether the prices you entered include VAT or not — if they do, the VAT is removed from revenue before profit is calculated.

Osek Patur — turnover up to about ₪120,000 a year, doesn't charge VAT, simple bookkeeping. Osek Murshe — no turnover ceiling, charges and offsets VAT, suits most businesses. Limited company (Ltd/Ba'am) — a separate legal entity, 23% corporate tax on profit and then dividend/salary tax to the owner, suited to high profits and limited liability. A business just starting out usually begins as an Osek Patur or Osek Murshe.

For a self-employed person (Osek Patur/Murshe) the business's profit is your income — there is no separate 'owner's salary', and tax is calculated on the whole profit. So in the salary field enter only pay for employed staff. If you operate as a limited company, the owner's salary is an expense and is taxed separately as payroll. This calculator computes tax on operating profit — it mainly fits a self-employed structure.

It depends on the field, but beyond the initial investment (equipment, renovation, inventory, website) it's important to hold working capital for about 6 months of fixed costs, because it usually takes time to reach break-even. A home-based service business can start with a few thousand shekels; a business with a physical shop and inventory — tens to hundreds of thousands. Plan cash flow, not just profit.

The calculator gives a fast, indicative estimate based on the income-tax brackets and National Insurance rates for the self-employed. It doesn't replace an accountant: it doesn't account for personal exemptions, partly deductible expenses (vehicle, per-diem), depreciation, pension contributions and special cases. Use it to understand orders of magnitude and test scenarios — and before opening a business, consult a certified accountant (רו"ח).