For Employees

What Are “Tax Credit Points,” Really?

If you're employed in Israel, there's a good chance you're paying more tax than you actually need to. Tax credit points are the reason — and most people never fully understand how they work.

💡So what is a tax credit point?

At its simplest, it's a tax discount. Whatever tax you owe, each credit point you're entitled to reduces that amount. In 2024, each point is worth roughly NIS 242 a month, or NIS 2,904 a year, in tax you don't have to pay. Simple enough.

👥Who gets credit points

Points are granted based on a number of factors, including:

1. Israeli residency — everyone living in Israel gets 2.25 points.
2. Being a woman — an additional half point.
3. Family status — single or divorced parents with children get extra points.
4. Children — children under 18 add more points.
5. Military service — recent service adds points.
6. New immigrants / returning residents — made aliyah? You get extra points too.
7. Completing a degree — worth points for up to two years after graduating.
8. Living in certain border communities — qualifies for an additional discount.
9. Disability in the family / a child referred to a placement committee — qualifies for extra points.

🧮How many points do you actually get?

You don't have to work it out by hand — there's a simple simulator that calculates your points based on your situation. You just fill in your details and it shows you exactly what you're entitled to.

💵What salary do you start paying tax at?

These points also affect the salary level at which you start owing tax at all. If your salary is relatively low, your points might mean you owe no tax whatsoever. There's a simulator for this too, that factors in your specific credit points.

✅A few tips

• Update your employer whenever your life circumstances change (for example, if you have a child) so you get every point you're entitled to.
• Check whether you qualify for additional points — for instance, after finishing a degree or being discharged from the army.
• Didn't receive all your points during the year? You can file for a tax refund.