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 with no income are exempt from National Insurance (Bituach Leumi) and health insurance contributions for an initial period, and olim also enjoy municipal tax discounts, and a one-time absorption grant known as the Sal Klita.

The 4.5-Year Tax Credit Explained

For olim who made aliyah on or after January 1, 2022 (Amendment 262 to Section 35 of the Income Tax Ordinance), the olim tax benefit operates on a 54-month (4.5-year) schedule starting from your official aliyah date. In months 1 through 12, you receive 1 extra credit point. From months 13 through 30, you receive 3 extra credit points — the peak of the benefit. From months 31 through 42, you receive 2 extra credit points, and from months 43 through 54, 1 extra credit point. Each credit point is worth approximately 242 NIS per month, which equals 2,904 NIS per year. This means you save up to 242 NIS per month in the first year and up to 726 NIS per month in months 13–30 (3 points multiplied by 242 NIS). Over the full 54-month period, the total potential tax savings are 12 months at 242 NIS, 18 months at 726 NIS, 12 months at 484 NIS and 12 months at 242 NIS, totaling approximately 24,684 NIS in income tax savings. Olim who made aliyah before 2022 remain on the previous schedule: 3 extra points for the first 18 months, 2 for the next 12 months and 1 for the last 12 months (42 months in total). 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 1/3/2/1 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. For aliyah from 2022, this is the 1/3/2/1 schedule: 1 additional point in months 1 through 12, 3 additional points in months 13 through 30, 2 additional points in months 31 through 42, and 1 additional point in months 43 through 54 (aliyah before 2022: 3/2/1 over 42 months). 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 months 13–30 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.

National Insurance and Health Insurance for Olim

There is no general National Insurance discount for new olim. An oleh with no income, or with income below 688 NIS per month (2026), is exempt from National Insurance (Bituach Leumi) contributions for 12 months from the date of aliyah, and from health insurance contributions for 6 months (extendable up to 12 months in months when sal klita or subsistence payments are received). A working oleh gets no discount and pays the standard rates for employees: 1.04% on monthly income up to 7,703 NIS, and 7% on income between 7,703 NIS and the ceiling of 51,910 NIS per month. Health tax is generally not reduced for olim and follows the standard brackets: 3.23% on income up to 7,703 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 months 13–30 after aliyah (aliyah from 2022, 3 extra credit points; no National Insurance discount). Figures are rounded and based on this calculator's 2026 brackets and rates.

Example 1: Gross salary of 10,000 NIS
A regular employee pays approximately 575 NIS in income tax, 241 NIS in National Insurance, and 368 NIS in health tax, resulting in a net salary of about 8,816 NIS. A new oleh pays approximately 0 NIS in income tax (fully covered by 5.25 credit points), the same 241 NIS in National Insurance, and 368 NIS in health tax, resulting in a net salary of about 9,391 NIS — a monthly saving of approximately 575 NIS.

Example 2: Gross salary of 15,000 NIS
A regular employee pays approximately 1,572 NIS in income tax, 591 NIS in National Insurance, and 626 NIS in health tax, for a net of about 12,212 NIS. A new oleh pays approximately 846 NIS in income tax, the same 591 NIS in National Insurance, and 626 NIS in health tax, for a net of about 12,938 NIS — a monthly saving of approximately 726 NIS.

Example 3: Gross salary of 20,000 NIS
A regular employee pays approximately 2,682 NIS in income tax, 941 NIS in National Insurance, and 885 NIS in health tax, for a net of about 15,493 NIS. A new oleh pays approximately 1,956 NIS in income tax, the same 941 NIS in National Insurance, and 885 NIS in health tax, for a net of about 16,219 NIS — a monthly saving of approximately 726 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.