What Are Credit Points?
This is educational content, not tax advice. For your specific situation, consult a licensed Israeli tax accountant.
נקודות זיכוי (Nekudot Zikui) (tax credit points) are one of the most important concepts in the Israeli tax system - and one of the biggest financial benefits for new olim. Understanding them can save you hundreds of shekels every month.
Each credit point reduces your monthly מס הכנסה (Mas Hachnasa) (income tax) by approximately 242 NIS in 2026. This value is updated annually. Critically, credit points reduce the actual tax you owe - they are not a deduction from taxable income, but a direct reduction of your tax bill.
How do credit points differ from tax deductions?
This distinction matters. In many countries (including the US), a deduction reduces your taxable income, so its benefit depends on your marginal tax rate. A $1,000 deduction saves a 22% taxpayer $220, but saves a 10% taxpayer only $100.
Israeli credit points work differently. Each point saves every taxpayer exactly the same amount - 242 NIS per month in 2026 - regardless of your income bracket. A credit point is worth just as much to someone earning 15,000 NIS/month as to someone earning 50,000 NIS/month.
How Many Points Does Everyone Get?
The baseline allocations for 2026 are:
- 2.25 points - every Israeli resident (regardless of gender)
- +0.5 points - women (total: 2.75 points)
- +0.5 points - working mothers (additional, beyond the 0.5 above)
So a man with no special circumstances receives 2.25 points × 242 NIS = 545 NIS/month off his tax bill. A woman receives at minimum 2.75 points = 666 NIS/month.
How many extra credit points do new olim get?
For anyone who made aliyah on or after 1 January 2022, the oleh credit points run for 54 months and are back-loaded, with the largest benefit in the middle years rather than at the start. The schedule is:
- Months 1–12: +1.0 extra point per month
- Months 13–30: +3.0 extra points per month (the peak)
- Months 31–42: +2.0 extra points per month
- Months 43–54: +1.0 extra point per month
During the peak period (months 13 to 30), a male oleh receives 2.25 + 3.0 = 5.25 points, worth 1,271 NIS off your tax bill every month. A female olah in the same peak period receives 5.75 points = 1,392 NIS/month in tax savings. In your first 12 months the extra benefit is smaller (+1.0 point, about 242 NIS/month) before it ramps up.
This is a meaningful benefit. At a salary of 15,000 NIS/month, the extra oleh credit points during the peak years could cut your income tax bill by more than 50%.
How do you make sure you're getting your credit points?
Your credit points are applied automatically by your employer through the ניכוי במקור (Nikui BaMakor) (withholding) system - but only if your employer has been notified. When you start a new job in Israel, submit Form 101 to your employer. This form includes your personal details, residency status, and oleh status - it tells the employer's payroll system how many credit points to apply.
If you forget to submit Form 101, your employer may withhold too much tax. You can reclaim the overpayment by filing an annual tax return. Don't leave this money on the table - make sure your employer has your correct details from day one.
What other circumstances grant additional credit points?
Beyond the baseline and oleh points, there are many other situations that grant additional credit points, including:
- Children (increasing points per child at various ages)
- Single-parent households
- Military service
- Attendance at an Israeli university
- Disability
- Completing certain academic degrees
A bilingual accountant can review your personal situation and make sure all relevant points are applied.
A credit point (nekudat zikui) cuts your monthly Israeli income tax by about 242 NIS in 2026, the same amount at every income level. Every resident gets 2.25 base points, and olim who made aliyah from 2022 onward get extra points across 54 months, peaking at +3.0 per month in months 13 to 30.
Approximately 242 NIS per month, or about 2,904 NIS per year. The value is set annually and applies equally to every taxpayer regardless of income, because a credit point reduces the tax you owe rather than your taxable income.
Every resident gets 2.25 base points. For olim who made aliyah on or after 1 January 2022, the extra oleh points run for 54 months and are back-loaded: +1.0 per month in months 1 to 12, +3.0 per month in months 13 to 30, +2.0 per month in months 31 to 42, and +1.0 per month in months 43 to 54.
Across the full 54 months the extra points add up to about 102 point-months. At 242 NIS each that is roughly 24,700 NIS in reduced income tax over the period, provided your tax bill is high enough each month to absorb the full value.
Submit Form 101 to each new employer with your Teudat Oleh so the payroll system applies the correct number of points through withholding. If you miss it, you can reclaim any overpaid tax by filing an annual tax return.
