Frequently Asked Questions
Common questions about finances, taxes, and benefits for new immigrants to Israel. 26 questions across 6 categories.
Banking & Daily Finance
4 questions
Yes, and you should. Keeping a foreign bank account makes it easier to manage overseas income, pay bills in your origin country, and transfer money at favorable rates. Some US banks may close accounts of non-residents, so inform your bank proactively.
Learn more →Most major banks offer special Oleh packages with fee waivers for the first 1-2 years. Bank Hapoalim, Leumi, and Discount are the largest. Compare their Oleh packages, English-speaking staff availability, and app language support before choosing.
Learn more →Hora'at Keva (standing order) is Israel's version of direct debit. Almost every service provider, from Arnona to internet, requires one. You authorize the company to withdraw a set amount from your bank account on a fixed date each month.
Learn more →Israeli credit cards let you split almost any purchase into interest-free monthly installments (Tashlumim). When paying, the terminal asks how many payments you want. This is normal and widely used, not a sign of financial trouble.
Learn more →Taxes & Exemptions
5 questions
New olim are exempt from Israeli tax on foreign-sourced income for 10 years from their Aliyah date. This covers dividends, interest, rental income, and capital gains from assets held before Aliyah. Note: the 2026 reform introduces new reporting requirements.
Learn more →Yes. US citizens and green card holders must file US taxes regardless of where they live. You will need to file FBAR (FinCEN 114) for foreign accounts over $10,000 and comply with FATCA. The US-Israel tax treaty helps prevent double taxation.
Learn more →Olim receive additional Nekudot Zikui (tax credit points) over 42 months: 3 points in months 1-18, 2 points in months 19-30, and 1 point in months 31-42. Each point reduces your monthly tax by about 235 NIS (2026 rates).
Learn more →The 2026 reform primarily affects reporting. While the 10-year exemption on foreign income tax remains, olim will need to report worldwide income even during the exemption period. This is a reporting requirement, not a new tax.
Learn more →If you have foreign income, US filing obligations, or are self-employed, a bilingual accountant is strongly recommended. For simple salaried employment with no foreign income, your employer handles most tax matters through payroll.
Learn more →Pension & Savings
4 questions
Keren Hishtalmut (Study Fund) is a unique Israeli savings vehicle. Your employer contributes 7.5% of your salary and you contribute 2.5%. After 6 years, you can withdraw the entire amount tax-free for any purpose. It is widely considered the best short-to-medium-term savings tool in Israel.
Learn more →Generally, no. Transferring US retirement accounts to Israel triggers immediate US taxation, potential early withdrawal penalties, and you lose the tax-deferred growth. Keep your US retirement accounts in the US and manage them remotely.
Learn more →Israeli law requires employers to start pension contributions after 6 months of employment (or immediately if you had a pension at your previous job). The mandatory contribution is 6.5% employee + 6.5% employer + 6% employer for severance.
Learn more →Israeli mutual funds and ETFs are classified as PFICs (Passive Foreign Investment Companies) by the IRS, resulting in punitive US taxation. American olim should generally invest through US-based brokerages in US-domiciled ETFs to avoid this.
Learn more →Housing & Real Estate
4 questions
Olim purchasing their first apartment in Israel receive a significant discount on purchase tax (Mas Rechisha). The discount applies for up to 7 years from your Aliyah date and can save tens of thousands of shekels on a typical apartment purchase.
Learn more →Yes. Olim are eligible for a government-subsidized mortgage (Mashkanta Mezukah) with favorable terms. The subsidy amount depends on family size, and you must apply within 15 years of Aliyah. The subsidized portion is at below-market interest rates.
Learn more →Arnona is the municipal property tax paid by whoever lives in a property (owner or renter). New olim receive a 90% discount on the first 100 sq meters for their first year. You need to apply at your local municipality with your Teudat Oleh.
Learn more →Monthly costs include Arnona (municipal tax), Vaad Bayit (building maintenance fees), home insurance, water, electricity, gas, and internet. Budget roughly 2,000-4,000 NIS per month depending on location and apartment size, on top of your mortgage payment.
Learn more →Employment & Work
4 questions
Yes, but there are tax and social insurance implications. Your income becomes Israeli-sourced once you are a tax resident. You may need to register as self-employed or use a billing company (Atzmai Sachir) to handle payroll and compliance.
Learn more →Osek Patur (exempt dealer) is for annual revenue below ~120,000 NIS and does not charge VAT. Osek Murshe (licensed dealer) is required above that threshold and must charge and remit 18% VAT. A newer category, Osek Zair, exists for very small businesses.
Learn more →Yes. Self-employed individuals must pay both their own and the employer share of Bituach Leumi contributions. The rate depends on your income level and can be a significant expense. Budget for approximately 16% of your income.
Learn more →An Israeli payslip (Tlush Maskoret) shows your Bruto (gross), deductions for income tax, Bituach Leumi, health tax, pension, and Keren Hishtalmut, resulting in your Neto (net). Employer contributions to pension and severance appear separately.
Learn more →Olim Benefits & Insurance
5 questions
Each Kupat Cholim offers supplemental insurance (Bituach Mashlim) that you can join without medical underwriting within 90 days of enrollment. After 90 days, you may face medical questionnaires, waiting periods, or exclusions for pre-existing conditions.
Learn more →Olim receive a partial exemption from Bituach Leumi payments for the first year. If you are not working, you pay a reduced minimum rate. Once employed, contributions are deducted from your salary as normal.
Learn more →Sal Klita amounts depend on family status: roughly 20,000-30,000 NIS for a single oleh, more for families. The first payment is at the airport, followed by 5 monthly installments deposited directly into your Israeli bank account.
Learn more →Israel has four Kupot Cholim: Clalit (largest), Maccabi, Meuhedet, and Leumit. All provide the same basic health basket. Compare supplemental insurance plans, specialist availability, clinic locations near your home, and English-speaking staff.
Learn more →Olim can import personal belongings, one car, and household appliances tax-free within 3 years of Aliyah. There are specific rules for timing and value limits. The car exemption is particularly valuable as Israeli car taxes are very high.
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