Credit Points Don't Apply Themselves
This is educational content, not tax advice. For your specific circumstances, consult a licensed Israeli tax accountant.
Your olim נקודות זיכוי (Nekudot Zikui) (tax credit points) are not applied automatically just because you made aliyah. You need to actively tell your employer — and, if relevant, the tax authority — that you are an oleh and are entitled to extra points. Miss this step and you'll have too much tax withheld from your salary every month.
The Key Document: Form 101
The mechanism for notifying your employer is Form 101 (טופס 101). This is a standard Israeli income tax form that every employee should submit to every new employer. It records your personal details, family status, oleh status, and other relevant information that determines how many credit points you are entitled to.
When you start a new job, your employer's payroll department will ask you to fill in Form 101. To ensure your olim credit points are applied, you must:
- Mark yourself as an oleh chadash and record your aliyah date
- Bring your Teudat Oleh (immigration certificate) so your employer can verify your status and aliyah date
- Confirm that you have no other employer (if that is the case)
Once Form 101 is submitted with the correct information, your employer's payroll software calculates the correct number of credit points for the current month in your 42-month schedule and applies them automatically to your withholding.
If You Have Multiple Employers
If you work for more than one employer simultaneously, the situation requires a תיאום מס (Teum Mas) (tax coordination) from the Israel Tax Authority. Without coordination, each employer applies credit points independently, potentially granting the same points twice — which results in too little tax being withheld and a surprise bill at year-end.
To get a Teum Mas, you apply online through the Israel Tax Authority portal (www.taxes.gov.il) or in person at your local tax office. The coordination certificate tells each employer exactly how many credit points to apply, ensuring the total is correct across all your income sources.
If You're Self-Employed
Self-employed olim (osek patur or osek murshe) do not have an employer applying credit points on their behalf. Instead, credit points reduce your tax liability when you file your annual tax return. During the year, self-employed individuals make advance tax payments (Mekadmot) — your accountant should factor your olim credit points into the advance payment calculation so you are not over-paying throughout the year.
If you are self-employed, working with a bilingual accountant from the start is strongly recommended. The interaction between self-employment income, advance payments, Bituach Leumi contributions, and olim credit points is complex enough that trying to manage it alone often leads to overpayment or underpayment.
Retroactive Claims: Recovering Missed Credit Points
If you did not submit Form 101 when you started work, or if your employer failed to apply the correct number of credit points, you may have overpaid tax in prior months. The good news: you can recover this money.
Israel allows olim to file a retroactive annual tax return to claim a refund for overpayments from a prior year. The Israel Tax Authority generally allows returns to be filed up to six years after the end of the relevant tax year. In practice, most olim reclaim overpayments from the previous 1–2 tax years. Retroactive claims are made by filing a דוח שנתי (Doch Shenati) (annual tax return) for the relevant years.
A licensed accountant can calculate the exact overpayment, prepare the returns, and submit them on your behalf. For significant overpayments, the accountant's fee is typically well worth the refund received.
Annual Update: Re-Submitting Form 101
Israeli tax law requires employees to submit an updated Form 101 at the start of each calendar year. Your employer may send a reminder. If your olim credit point phase changes during the year (for example, you transition from Phase 1 to Phase 2 at month 19), your employer will adjust the withholding automatically once they have your correct aliyah date on file. Double-check your payslip at each phase transition to confirm the correct number of credit points is being applied.