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 They Differ from 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.
Extra Points for New Olim
New olim receive significantly more credit points during their first 42 months in Israel. The olim point schedule in 2026 is:
- Months 1–18: +3.0 extra points per month
- Months 19–36: +2.0 extra points per month
- Months 37–42: +1.0 extra point per month
During your first 18 months, 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 her first 18 months receives 5.75 points = 1,392 NIS/month in tax savings.
This is a meaningful benefit. At a salary of 15,000 NIS/month, the extra oleh credit points during year 1 could cut your income tax bill by more than 50%.
How to Make Sure You're Getting Your 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.
Additional Credit Points for Other Circumstances
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.