2025 National Insurance (Bituach Leumi) & Health Tax in Israel

National Insurance Health Tax in Israel for 2025

Understanding National Insurance & Health Tax in Israel

In Israel, National Insurance (Bituach Leumi) and Health Tax are mandatory social security contributions deducted from employees’ salaries. These funds provide crucial benefits such as healthcare, pensions, maternity leave, disability benefits, and unemployment support. Both employees and employers contribute, but the amounts vary based on income levels.

To help businesses and employees navigate payroll deductions in 2025, we’ve compiled a simple breakdown of contribution rates, income brackets, and key considerations.

National Insurance & Health Tax – Key Points

Mandatory for all employees in Israel
Contributions split into two income tiers
Employers & employees both contribute
Caps exist for high earners
Special rules apply to foreign residents, new immigrants, and pensioners

2025 National Insurance Contribution Rates

Contributions are tiered based on salary levels:

Income Bracket (ILS/month) Employee’s Contribution Employer’s Contribution
Up to 7,522 ILS (60% of avg. wage) 4.27% 4.51%
Above 7,522 ILS (up to 50,695 ILS) 12.16% 7.6%

2025 Health Tax Contribution Rates

Health tax is deducted only from employees’ salaries and has no employer contribution:

Income Bracket (ILS/month) Employee’s Contribution Employer’s Contribution
Up to 7,522 ILS 3.23% 0%
Above 7,522 ILS 5.17% 0%

Additional Considerations

📌 Income Cap: National Insurance and Health Tax contributions apply only up to 50,695 ILS/month. Any salary above this is not subject to additional deductions.

📌 Foreign Residents: Non-Israeli residents may have different contribution rules, depending on their visa type and employment structure.

📌 Exemptions & Reductions: Certain groups qualify for reduced rates or exemptions, including:

  • People under 18 years old
  • People with disabilities
  • IDF soldiers & discharged soldiers
  • Pensioners

Employer Responsibilities

Employers are responsible for:

Deducting the correct amounts from employee salaries
Submitting contributions to Bituach Leumi on time
Providing accurate payslips showing deductions
Ensuring compliance with Israeli labor laws

Late or incorrect contributions can lead to penalties and legal issues, so it’s crucial to stay compliant!

Why This Matters

For employees, understanding these deductions helps in financial planning and payroll expectations. For employers, proper compliance avoids penalties and keeps operations running smoothly.

📢 Need help managing payroll and compliance in Israel?
CWS Israel specialises in Employer of Record (EOR) services, ensuring your business meets all payroll regulations hassle-free. Contact us today for an obligation free chat.

 

 

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