Israel Statutory social-insurance contributions

What this value means

WHAT A PAYROLL ENGINE GETS WRONG IN ISRAEL. 1. THE CONTRIBUTION IS BANDED, AND THE TWO BANDS ARE BOTH USED FOR THE SAME EMPLOYEE. This is the defining feature of the Israeli scheme and the error that dominates every other. For an employee earning above the step, contributions are the reduced rate on the FIRST ILS 7,703 PLUS the full rate on the slice from ILS 7,703 to ILS 51,910. It is not a threshold at which one rate replaces the other for the whole wage, and it is not a marginal-only charge. Worked example on a monthly wage of ILS 20,000: employee pays 4.27% × 7,703 = ILS 328.92 plus 12.17% × 12,297 = ILS 1,496.54, total ILS 1,825.46 — not 12.17% × 20,000 = ILS 2,434, and not 4.27% × 20,000 = ILS 854. 2. THE HEALTH LEVY IS EMPLOYEE-ONLY. The employer pays 4.51% and 7.6% and nothing towards health. The employee pays 4.27% and 12.17%, of which the health component is 3.23% and 5.17%. In Israel, unusually, the EMPLOYEE'S total social burden (up to ILS 5,708.91 a month) exceeds the EMPLOYER'S (up to ILS 3,707.14) once mandatory pension is set aside. 3. BOTH RATES AND BOTH BOUNDARIES MOVED RECENTLY, ON DIFFERENT DATES. The reduced-band National Insurance rates rose on 1 January 2025 (employee 0.4% to 1.04%, employer 3.55% to 4.51%) and the reduced health rate on the same day (3.1% to 3.23%); the full-band health rate rose on 1 FEBRUARY 2025 (5% to 5.17%). The band boundaries themselves were reset on 1 January 2026 to ILS 7,703 and ILS 51,910. A single "2025 Israel" rate set is therefore ambiguous — January 2025 and February 2025 are different — and any 2024 table is wrong on four of the six percentages. 4. THE CEILING IS INDEXED ANNUALLY, THE PERCENTAGES ARE NOT. The Institute states that the maximum insurable income is updated each January by the rise in the index. Re-verify the two boundary amounts every January as a matter of routine; re-verify the percentages only when legislation moves them. 5. THERE ARE TWO DIFFERENT "AVERAGE WAGE" FIGURES IN ISRAELI PAYROLL AND THEY ARE NOT INTERCHANGEABLE. The National Insurance reduced-collection step is 60% of the average wage as defined in the National Insurance Law, which puts the underlying figure at about ILS 12,838 a month in 2026 (60% = ILS 7,703). The mandatory pension ceiling uses the average wage in the economy, ILS 13,769 in 2026. Using one where the other belongs mis-sizes either the band boundary or the pension ceiling by roughly 7%. 6. MANDATORY PENSION IS NOT OPTIONAL AND IS THE BIGGEST EMPLOYER LINE. 6% employee, 6.5% employer pension, 6% employer severance component — 18.5% in total, on the lower of the employee's wage and the average wage in the economy. It is imposed by extension order, not by the National Insurance Law, and it is paid to a private fund, so it will not appear on any Bituach Leumi rate page. Omitting it is the single largest source of understated Israeli employment cost. 7. THE RATE DEPENDS ON THE EMPLOYEE CATEGORY, AND THE INSTITUTE PUBLISHES THE VARIANTS. The figures served here are for Form 102 column 1: an Israeli-resident employee aged 18 up to retirement age. The Institute's own table gives materially different rates for at least eight other categories. Four that matter commercially: (a) A CONTROLLING SHAREHOLDER IN A CLOSE COMPANY (10% or more of the shares, or the right to appoint a director) pays less — reduced band employer 4.46% / employee 4.25% / total 8.71%, full band employer 7.38% / employee 11.96% / total 19.34% — because such a person is outside the unemployment and employer-insolvency branches. (b) AN EMPLOYEE UNDER 18 attracts employer-only contributions of 0.61% reduced and 2.12% full, with no employee share at all. (c) AN EMPLOYEE ABOVE THE OLD-AGE-PENSION ENTITLEMENT AGE, OR ALREADY RECEIVING THE OLD-AGE PENSION, attracts the same employer-only 0.61% / 2.12%. (d) A FOREIGN RESIDENT FROM A SOCIAL-SECURITY TREATY COUNTRY pays National Insurance at the ordinary 4.51% / 1.04% and 7.6% / 7% but NO HEALTH CONTRIBUTION AT ALL — total 5.55% reduced and 14.6% full. Retirement age for these purposes is 67 for men and between 62 and 65 for women depending on date of birth; the old-age-pension entitlement age is 70. 8. NOTHING HERE IS DEDUCTIBLE AGAINST INCOME TAX FOR THE EMPLOYEE. National Insurance and health contributions are withheld alongside income tax rather than before it. Mandatory pension contributions attract their own tax reliefs under the income-tax rules, which are not modelled here. 9. WORK INJURY IS INSIDE NATIONAL INSURANCE, NOT A SEPARATE CHARGE. Israel has no separate employer occupational-accident premium of the kind Algeria, Tunisia or Jordan levy: the injured-workers branch is funded from within the National Insurance rates above. Do not add one. SUB-NATIONAL VARIATION: none. Rates and both band boundaries are national. There is no municipal or district payroll charge and no regional differentiation of any branch. Differentiation is entirely by EMPLOYEE CATEGORY (age, residence, treaty status, controlling-shareholder status, receipt of an old-age or disability pension), which is what the Form 102 column structure encodes. WHAT WE DO NOT PUT A NUMBER ON: I put no number on the following, deliberately. THE FOREIGN-WORKER (NON-RESIDENT, NON-TREATY) RATE TABLE — a foreign worker who is not an Israeli resident and not covered by a social-security agreement is insured only for a restricted set of branches and is charged under a different published table, which was not read for this record. The treaty-country row IS served, in the notes above, because it appears in the same table as the main rates. MANDATORY PENSION ENTRY CONDITIONS AND AGE LIMITS — the extension order's qualifying-period and age rules are stated as existing, not quantified, because the order text was not opened for this record. PAYROLL TAX (מס שכר) — not modelled. It applies to financial institutions and non-profit organisations, not to an ordinary commercial employer, and would mislead if carried as a general rate. EMPLOYER SEVERANCE LIABILITY ABOVE THE PENSION COMPONENT — the 6% severance component inside mandatory pension is served; any residual statutory severance exposure beyond it depends on the individual arrangement and is not priced. ALREADY LEGISLATED, NOT YET IN FORCE: nothing found. But note the built-in annual movement: the reduced-collection step and the maximum insurable income are BOTH re-set every January by indexation, so this record's two boundary amounts have a known expiry — re-verify in the first week of January 2027 and expect both figures to change even if no percentage does. The percentages themselves last moved on 1 January and 1 February 2025 and are stable as at this record's date. Employee and employer shares are stated separately: the employee figure is what leaves the payslip, the employer figure is cost of employment and is not a deduction.

Get it programmatically

curl https://mearef.dev/v1/il/social-contributions
# $0.005 per call — x402 on Base (USDC). No key, no signup.
# History:    curl https://mearef.dev/v1/il/social-contributions/history?from=2020-01-01
# Provenance: curl https://mearef.dev/provenance/il/social-contributions

Other Israel series: Bank of Israel interest rate · VAT standard rate (מס ערך מוסף) · VAT registration threshold · National minimum wage · Public holidays · CPI inflation (year-on-year) · Corporate income tax rate · Withholding tax rates · statutory interest rate · Personal income tax brackets

The same figure elsewhere: Jordan · Kuwait · Oman · Qatar · Saudi Arabia · all 9