Israeli Payslip Explained: How to Read Your Tlush Maskoret

The Tlush Maskoret (תלוש משכורת) is the Israeli payslip, a monthly pay statement that every employer in Israel is legally required to provide under the 2008 Notification to Employee (Employment Terms) Act. If you have heard the plural form tlushot maskoret, it refers to the same document. Whether you are a new oleh, an international hire at a Tel Aviv tech company, or an HR manager at a multinational, this guide walks through each field on your Israel pay stub so you can read it with confidence.

Israeli payslips are issued almost entirely in Hebrew, even at companies with a predominantly English-speaking workforce. That creates a real comprehension barrier when you need to verify your salary, check deductions, or reconcile your annual tax form. Every field on your Israeli payslip is explained below with Hebrew transliterations and English translations, giving you a structured reference you can use with your actual payslip open beside it. All rates, thresholds, and contribution ceilings referenced here reflect 2026 figures.

A standard Israeli payslip contains five main sections:

Payment components — your base salary (Sachar Yesod), recuperation pay (Dmei Havra'a), transportation allowance, overtime, commissions, and any other taxable or non-taxable earnings.
Mandatory deductions — income tax (Mas Hachnasa), National Insurance (Bituach Leumi), and health tax (Bituach Bri'ut), each calculated according to bracket-based rates on your gross pay.
Tax credit points (Nekudot Zikkuy) — the credits that reduce your income tax liability, including the universal resident credit, immigration credits for olim, and any additional points for dependents or qualifying circumstances.
Employer and voluntary contributions — pension fund contributions, the tax-advantaged continuing education fund (Keren Hishtalmut), and severance accrual under Section 14, showing both your share and the employer's.
Year-to-date totals — cumulative gross pay, cumulative tax withheld, and cumulative social insurance contributions from January through the current month, which become critical when you reconcile against your annual Tofes 106.

The exact layout of these sections varies depending on which payroll software your employer uses. Hilan, Hashavshevet, Michpal, and Priority each format the payslip differently, but the statutory fields and categories listed above appear on every version. Once you understand the underlying structure, you can navigate any layout. Most employers distribute payslips through the payroll platform's employee portal, though some still provide printed copies or email PDF attachments.

If you have dealt with payslips in other countries, you may find it helpful to compare structures. Readers who have experience reading a German Lohnabrechnung payslip will notice that Israel's payslip shares the pattern of separating gross components from statutory deductions, though the specific taxes and social contributions differ significantly.

Payment Components on Your Israeli Payslip

The top portion of your tlush maskoret lists every payment component under the heading Rechivei Sachar (רכיבי שכר), literally "salary components." Each line represents a distinct element of your compensation, and understanding them is the first step toward verifying your pay is correct.

Sachar Yesod (שכר יסוד) — Base Salary

Your Sachar Yesod is your gross base salary before any additions or deductions. This is the anchor figure on your payslip: mandatory pension contributions, income tax brackets, National Insurance thresholds, and most other calculations flow from it. If you are a salaried employee, this amount reflects your agreed monthly salary. Hourly workers will see it calculated from hours worked multiplied by their rate.

Dmei Havra'a (דמי הבראה) — Recuperation Pay

Dmei Havra'a is one of the most distinctly Israeli payslip items. It is a mandatory annual convalescence payment established through collective agreements and extension orders, intended to help employees cover the cost of rest and recovery. Rather than appearing on every monthly payslip, it is typically paid as a single lump sum in June or July.

The payment is calculated by multiplying a per-day rate by the number of days you are entitled to, based on your seniority:

Years of Employment	Entitled Days
1–3	5 days
4–6	6 days
7–10	7 days
11–15	8 days
16–19	9 days
20+	10 days

The per-day rate is updated periodically. As of 2026, the rate in the private sector stands at approximately 418 NIS per day. Public sector employees receive a higher rate. If you started mid-year, your Dmei Havra'a will be prorated. When this item appears on your payslip, check that both the number of days and the daily rate match your seniority and sector.

Dmei Nesi'ot (דמי נסיעות) — Transportation Allowance

The transportation line on your payslip reimburses your daily commute based on actual public transport costs, up to a cap of approximately 26.40 NIS per working day. The amount reflects either the actual cost of your round-trip commute by public transport or the daily cap, whichever is lower. Employees who live close enough to walk to work, or who receive a company vehicle, are generally not entitled to this allowance.

Sha'ot Nosafot (שעות נוספות) — Overtime Pay

If you work beyond standard hours, overtime appears as a separate line item. Israeli labor law sets clear premium rates:

125% of your regular hourly rate for the first two overtime hours in a day
150% for each additional overtime hour beyond that

The weekly overtime threshold is 42–43 hours depending on your sector and any applicable collective agreements. Some payslips break overtime into two sub-lines (125% hours and 150% hours) so you can verify each tier independently. If your payslip shows overtime but the amounts look flat, check whether the correct multipliers have been applied.

Other Payment Components

Depending on your employer and employment contract, several additional items may appear under Rechivei Sachar:

Bonus (בונוס) — performance bonuses, signing bonuses, or holiday bonuses (such as a 13th salary payment in some sectors)
Shift differentials (תוספת משמרות) — additional pay for evening, night, or Shabbat shifts
Commissions (עמלות) — sales or performance-based commissions
Reimbursements (החזרים) — expense reimbursements for items like phone, meals, or professional attire

These vary widely by employer and are typically governed by your individual employment contract or the relevant collective agreement rather than by statute.

Income Tax and Tax Credit Points (Mas Hachnasa and Nekudot Zikkuy)

The income tax line on your Israeli payslip, labeled Mas Hachnasa (מס הכנסה), is usually the single largest deduction. Israel uses a progressive bracket system: the more you earn, the higher the rate applied to each additional slice of income. Your employer calculates this monthly by dividing the annual bracket thresholds by 12, then applying the corresponding rate to each portion of your gross salary.

Here are the 2026 Israeli income tax brackets expressed as monthly thresholds:

Monthly Taxable Income (NIS)	Tax Rate
Up to 7,010	10%
7,011 – 10,060	14%
10,061 – 16,150	20%
16,151 – 22,440	31%
22,441 – 46,690	35%
46,691 – 60,130	47%
Above 60,130	50%

These brackets stack. If your monthly gross is NIS 20,000, you pay 10% on the first NIS 7,010, 14% on the next portion up to NIS 10,060, 20% on the slice up to NIS 16,150, and 31% on the remainder up to NIS 20,000. The result is your gross tax liability before credits are applied.

How Nekudot Zikkuy Reduce Your Tax Bill

Nekudot Zikkuy (נקודות זיכוי) are tax credit points that directly reduce the amount of income tax you owe. They do not reduce your taxable income; instead, they are subtracted from the calculated tax itself. In 2026, each credit point is worth NIS 242 per month (NIS 2,904 annually).

Every Israeli resident automatically receives a base allocation:

Men: 2.25 credit points (NIS 544.50/month reduction)
Women: 2.75 credit points (NIS 665.50/month reduction)

The additional 0.5 points for women is a longstanding provision in the Israeli tax code.

Additional Credit Points You May Be Entitled To

Beyond the base allocation, several categories can significantly increase your total credit points:

New immigrants (olim chadashim): Olim receive additional credit points during their first 3.5 years in Israel: 3 extra points in the first 18 months, then 2 extra points for the following 12 months, then 1 extra point for the final 12 months. This is one of the most valuable tax benefits available to new immigrants and appears directly on the payslip.
Parents: Each child entitles one or both parents to credit points, with the number varying by the child's age. Children under 6 generally provide more points than older children. The allocation between parents depends on filing status.
Military and national service veterans: Completion of IDF service or recognized national service grants additional credit points for a limited period after discharge.
Development town residents: Employees residing in designated peripheral areas (yishuvim) receive extra credit points as a government incentive.
Academic degree holders: A temporary credit applies after completing a recognized degree, typically 1 point for a bachelor's degree and 0.5 points for a master's degree, each for a limited number of tax years.

Putting It Together: From Gross Salary to Net Tax Deduction

The calculation your employer runs each month follows a straightforward sequence. Start with your gross taxable salary and apply it against the progressive brackets to get the raw tax amount. Then multiply your total credit points by the monthly per-point value (NIS 242 in 2026) and subtract that from the raw tax. The result is the Mas Hachnasa deduction that appears on your payslip.

For example, if the bracket calculation produces NIS 2,800 in raw tax and you hold 4.25 credit points, your credit is 4.25 x 242 = NIS 1,028.50. Your actual income tax deduction would be NIS 1,771.50.

Tax Coordination for Multiple Employers

If you work for more than one employer, each will apply the full progressive brackets independently, which can result in significant over-taxation. To prevent this, the Israel Tax Authority (Rashut HaMisim / רשות המסים) issues a tax coordination form called a Te'um Mas. This form instructs your secondary employer to withhold tax at the correct marginal rate rather than starting from the lowest bracket again. If you hold two jobs and notice unexpectedly high deductions from your second employer, a missing Te'um Mas is almost always the reason. You can request one through the Israel Tax Authority's online portal or at a local tax office.

National Insurance and Health Tax Deductions

Every Israeli payslip includes deductions for Bituach Leumi (ביטוח לאומי) and Bituach Bri'ut (ביטוח בריאות). Together, these fund Israel's social safety net and universal healthcare system, and they are among the largest mandatory deductions on your tlush maskoret after income tax. The confusing part: both use a split-rate structure that changes at a specific income threshold, so the percentage you pay is not a single flat rate.

Bituach Leumi: What It Funds

Bituach Leumi contributions go to the National Insurance Institute of Israel, the equivalent of Social Security. Your employee contributions fund old-age pensions (kitzba), disability benefits, unemployment insurance, maternity leave payments, work injury coverage, and other social insurance programs. On your payslip, you will see the employee portion deducted from your gross salary. Your employer also pays a separate, higher Bituach Leumi contribution on your behalf, which typically appears in the employer contributions section of the payslip rather than reducing your take-home pay.

The Dual-Rate Threshold Structure

This is where most English-speaking employees get lost. Israeli national insurance and health tax contributions are not calculated at a single flat percentage. Instead, they use two tiers split at 60% of the average wage.

According to the National Insurance Institute of Israel (Bituach Leumi), as of January 2026, Israeli employees pay a combined national insurance and health insurance contribution of 4.27% on salary up to 60% of the average wage, rising to 12.17% on salary above that threshold.

If your monthly salary spans both tiers, you pay 4.27% on the first portion (up to the threshold) and 12.17% on everything above it. This is a marginal system, similar in concept to how income tax brackets work.

There is also a maximum income ceiling for Bituach Leumi contributions. Salary above this monthly cap is not subject to national insurance deductions at all. For 2026, this ceiling is set at five times the average wage. Once your monthly earnings exceed this ceiling, no additional Bituach Leumi is deducted on the excess.

Bituach Bri'ut: The Health Tax

Bituach Bri'ut is the health tax component that funds Israel's universal healthcare system. This is the money that pays for your membership in one of the four kupot cholim (health funds): Clalit, Maccabi, Meuhedet, or Leumit. Every Israeli resident is entitled to a basket of health services through these funds, and the health tax is how that system is financed.

On most payslips, the health tax is bundled into the Bituach Leumi deduction line rather than appearing as a separate item. The combined rates cited above (4.27% and 12.17%) already include both the national insurance and health tax portions. Some payslips do break them out separately, but the total combined rate remains the same either way.

Employer Contributions

Your employer pays Bituach Leumi contributions at rates higher than your employee rates, following the same dual-tier threshold structure. These employer-side contributions appear in the employer cost section of the payslip and do not reduce your net pay. The current employer rates are published on the same NII page linked above.

Pension and Keren Hishtalmut Contributions

Since the 2008 mandatory pension order (Tzav Harchavat Pensia / צו הרחבת פנסיה), every employee in Israel is entitled to employer-funded pension contributions. Your payslip reflects this through two separate line items: one for the amount deducted from your gross salary (the employee share), and one showing what your employer contributes on top of your salary. Understanding both sides is essential for verifying that your retirement savings are on track.

Minimum pension contribution rates break down as follows:

Employee contribution: 6% of pensionable salary
Employer contribution to pension: 6.5% of pensionable salary
Employer contribution to severance (Pitzuyim / פיצויים): 8.33% of pensionable salary

The employee's 6% appears as a deduction in the Nikuyim (deductions) section of the payslip, reducing your net pay. The employer's 6.5% pension and 8.33% severance contributions appear separately, often under a Hafrashot Ma'asik (employer contributions) section, and do not reduce your take-home pay. These are minimums set by law. Some employers, particularly in the tech sector or under collective bargaining agreements, contribute at higher rates.

Your payslip may reference different pension vehicle types: Keren Pensia Makifa (קרן פנסיה מקיפה), the most common comprehensive pension fund that includes disability and survivors' insurance; Bituach Menahalim (ביטוח מנהלים), an older managers' insurance policy still held by some employees; or Kupat Gemel (קופת גמל), a provident fund. The contribution percentages above apply as minimums regardless of the vehicle.

Section 14 and Severance on Your Payslip

Most employment contracts in the technology and professional sectors include a Section 14 (סעיף 14) clause, referring to Section 14 of the Severance Pay Law. Under this arrangement, the employer's ongoing monthly severance contribution of 8.33% replaces the traditional obligation to pay a lump-sum severance (equivalent to one month's salary per year of employment) upon termination.

When Section 14 applies, you will see the 8.33% employer severance contribution as a distinct line item on your payslip each month. The practical significance: your accumulated pension fund balance already includes the severance component. If you leave the job, the pension fund balance is yours rather than requiring a separate severance calculation. If Section 14 does not appear in your contract, your employer still owes lump-sum severance upon qualifying termination, and the monthly contributions are considered "on account" rather than a full replacement.

Keren Hishtalmut (Education Fund)

The Keren Hishtalmut (קרן השתלמות), literally "education fund" or "advanced training fund," is a uniquely Israeli savings benefit with no direct equivalent in most other countries. Originally designed to fund professional development, it has become one of the most tax-efficient savings vehicles available to Israeli employees.

Standard contribution rates are 2.5% from the employee and 7.5% from the employer, for a combined 10% of salary. Your payslip shows both: the 2.5% deducted from your gross pay and the 7.5% employer contribution listed alongside pension contributions.

What makes the Keren Hishtalmut exceptionally valuable is the tax treatment. Employer contributions up to 7.5% of salary are exempt from income tax, subject to a monthly salary ceiling of approximately 15,712 NIS (2026). If your salary exceeds this threshold, the employer's contributions on the portion above the ceiling are taxed as part of your income. After a six-year vesting period, the accumulated funds, including all investment gains, can be withdrawn completely tax-free for any purpose. Withdrawals earmarked for educational purposes are permitted after three years.

For new immigrants and international workers encountering it for the first time: the Keren Hishtalmut effectively means your employer is adding 7.5% of your salary into a tax-free investment account on your behalf each month, on top of pension contributions. Combined with pension, your employer may be contributing over 22% of your salary (6.5% pension + 8.33% severance + 7.5% Keren Hishtalmut) beyond what appears in your gross pay. Verify these lines on every payslip to confirm you are receiving the full benefit your contract specifies.

How Your Payslip Connects to the Tofes 106

Every monthly Tlush Maskoret you receive is one piece of a larger annual picture. The Tofes 106 (טופס 106) is the annual tax certificate your employer is required to issue, typically by the end of March for the prior tax year. Think of it as the Israeli equivalent of a W-2 in the United States or a P60 in the United Kingdom. It consolidates everything from your twelve monthly payslips into a single document that becomes your official record with the Israel Tax Authority.

The connection between the two documents is direct and field-level. Your Tofes 106 contains annual totals for gross salary, income tax withheld (Mas Hachnasa), Bituach Leumi employee and employer contributions, health tax, pension contributions, and Keren Hishtalmut contributions. Each figure is the 12-month aggregate of the corresponding line item on your monthly payslip. If your January payslip shows 1,200 NIS in income tax withheld and your February shows 1,350 NIS, those amounts (along with the remaining ten months) sum to the annual income tax figure on your Tofes 106.

Verifying your Tofes 106 against your payslips. The most practical way to check for errors is to compare your December payslip's year-to-date (YTD) accumulated totals with the corresponding figures on the Tofes 106. They should match. When they do not, the discrepancy usually falls into one of a few common categories:

Missing months from a mid-year job change, where one employer's Tofes 106 covers only part of the year
Incorrect Nekudot Zikkuy (tax credit points) allocation, particularly after a change in personal status such as marriage, new child, or Aliyah credit expiry
Keren Hishtalmut contributions that do not match the expected rate, sometimes due to a delayed enrollment or a cap miscalculation
Retroactive salary adjustments (such as a raise applied mid-year with back pay) that may appear on one payslip but get distributed differently in the annual totals

The Tofes 106 is required for filing an annual tax return (Mas Hachnasa Shnatit) with the Israel Tax Authority. This is especially relevant if you have multiple employers during the year, earn rental income, or realize capital gains. Even salaried employees with a single employer may need to file if their tax credits were applied incorrectly or if they are eligible for deductions not captured through payroll. For a deeper look at the annual certificate itself, including its structure and how to read each section, see our guide on understanding Israel's annual Tofes 106 tax certificate.

If you identify a discrepancy, start by contacting your employer's payroll department. Most errors are correctable through a revised Tofes 106. If the employer does not resolve the issue or if you have already overpaid tax, the Israel Tax Authority allows you to file a direct claim for a tax refund using Form 135. Refund claims can cover up to six prior tax years, so even older payslip discrepancies may still be recoverable.