Net Salary Calculator for New Immigrants (Olim)

Complete Guide to Olim Tax Benefits in Israel (2026)

What Are Olim Tax Benefits?

Israel offers a comprehensive package of tax benefits specifically designed for new immigrants (olim chadashim) to ease the financial transition of settling in a new country. These benefits are enshrined in Israeli tax law, primarily under Section 35 of the Income Tax Ordinance (Pekudat Mas Hachnasa), and have been updated over the years to remain competitive and attractive for potential immigrants from around the world. The core benefit is a set of extra tax credit points (nekudot zikui) that directly reduce the amount of income tax you owe, resulting in a higher net salary compared to a regular Israeli employee earning the same gross income. In addition to income tax savings, olim also enjoy reduced National Insurance (Bituach Leumi) contributions during their first year, municipal tax discounts, and a one-time absorption grant known as the Sal Klita.

The 3.5-Year Tax Exemption Explained

The olim tax benefit operates on a 42-month (3.5-year) schedule starting from your official aliyah date. During this period, you receive additional credit points on a declining scale. In the first 18 months after aliyah, you receive 3 extra credit points per month. From months 19 through 30, you receive 2 extra credit points per month. From months 31 through 42, you receive 1 extra credit point per month. Each credit point is worth approximately 242 NIS per month, which equals 2,904 NIS per year. This means that in the first 18 months, you save 726 NIS per month in income tax (3 points multiplied by 242 NIS). Over the full 3.5-year period, the total potential tax savings amount to a substantial sum: 18 months at 726 NIS (13,068 NIS), plus 12 months at 484 NIS (5,808 NIS), plus 12 months at 242 NIS (2,904 NIS), totaling approximately 21,780 NIS in income tax savings. These savings can be even higher for individuals in higher tax brackets since the credit points are applied after the base calculation.

Extra Credit Points: The 3/2/1 Schedule

Understanding how credit points work is essential for estimating your take-home pay. In the Israeli tax system, every resident is entitled to a base of 2.25 credit points per month, regardless of immigration status. Women receive an additional 0.5 credit points, for a total of 2.75 base points. These base points already reduce income tax for all residents. As a new oleh, you receive additional credit points on top of the base allocation. This is the 3/2/1 schedule: 3 additional points in months 1 through 18, 2 additional points in months 19 through 30, and 1 additional point in months 31 through 42. The combined effect of base plus olim credit points can significantly reduce or even eliminate income tax for salaries in the low to moderate range. For example, an oleh earning 10,000 NIS gross in their first 18 months may pay zero or near-zero income tax because the combined 5.25 credit points (2.25 base plus 3 olim) cover the entire tax liability at that income level.

Reduced National Insurance for the First Year

In addition to the income tax benefits, new olim enjoy reduced National Insurance (Bituach Leumi) contributions during the first 12 months after aliyah. The standard National Insurance rates for employees are 0.4% on monthly income up to 7,122 NIS, and 7% on income between 7,122 NIS and the ceiling of 50,695 NIS per month. For new olim in their first year, these contributions are reduced by approximately 50%, which provides meaningful additional savings, especially for higher-earning immigrants. After the first year, olim pay the standard National Insurance rates like all other employees. Health tax is generally not reduced for olim and follows the standard brackets: 3.1% on income up to 7,122 NIS and 5% on income above that threshold up to the ceiling.

Sal Klita — The Absorption Basket

One of the most well-known benefits for new olim is the Sal Klita (absorption basket), a financial grant from the Ministry of Aliyah and Integration. The first installment is paid directly at the airport upon arrival, and subsequent installments are deposited into the oleh's bank account over the following months. The total amount depends on family status and age. A single person under 62 receives approximately 27,000 NIS total, while a married couple receives around 35,000 NIS. Additional amounts are provided for each child. Olim over 62 receive slightly different amounts. The Sal Klita is not taxable income and is intended to help cover initial living expenses such as rent, furniture, Hebrew courses (ulpan), and everyday costs. For the most up-to-date information and exact amounts, visit the Ministry of Aliyah and Integration official website.

Additional Benefits: Arnona, Phone, and More

Beyond the direct salary benefits, olim are entitled to several additional financial advantages. Municipal property tax (arnona) is discounted by 90% during the first year for a property of up to 100 square meters. Some municipalities extend partial discounts into the second year. New olim can also import household goods and a car duty-free within three years of aliyah, resulting in significant savings on customs and taxes. Several phone carriers and utility companies offer special olim plans with discounted rates. Some banks offer reduced fees for new immigrant accounts during the first year. Health fund (kupat cholim) registration is immediate and provides full coverage from day one. The combination of all these benefits can represent tens of thousands of shekels in savings during the initial absorption period.

Worked Examples

The following examples compare a regular employee to a new oleh in the first 18 months of aliyah (3 extra credit points, reduced NI). All figures are approximate and based on 2026 tax brackets.

Example 1: Gross salary of 10,000 NIS
A regular employee pays approximately 419 NIS in income tax, 602 NIS in National Insurance, and 374 NIS in health tax, resulting in a net salary of about 8,605 NIS. A new oleh pays approximately 0 NIS in income tax (fully covered by 5.25 credit points), about 301 NIS in reduced National Insurance, and 374 NIS in health tax, resulting in a net salary of about 9,325 NIS — a monthly saving of approximately 720 NIS.

Example 2: Gross salary of 15,000 NIS
A regular employee pays approximately 1,219 NIS in income tax, 953 NIS in National Insurance, and 624 NIS in health tax, for a net of about 12,204 NIS. A new oleh pays approximately 493 NIS in income tax, about 477 NIS in reduced National Insurance, and 624 NIS in health tax, for a net of about 13,406 NIS — a monthly saving of approximately 1,202 NIS.

Example 3: Gross salary of 20,000 NIS
A regular employee pays approximately 2,219 NIS in income tax, 1,303 NIS in National Insurance, and 874 NIS in health tax, for a net of about 15,604 NIS. A new oleh pays approximately 1,493 NIS in income tax, about 652 NIS in reduced National Insurance, and 874 NIS in health tax, for a net of about 16,981 NIS — a monthly saving of approximately 1,377 NIS.

Official Resources

For the most accurate and up-to-date information on olim benefits and tax regulations, consult the following official sources:

• Ministry of Aliyah and Integration — Official information on Sal Klita, ulpan, housing assistance, and more.
• National Insurance Institute (Bituach Leumi) — National Insurance rates, exemptions, and benefits.
• Israel Tax Authority — Income tax brackets, credit points, and filing information.