Tofes 106 Explained: How to Read Israel's Annual Tax Certificate

Tofes 106 is Israel's annual salary and tax certificate. Your employer issues it for the prior tax year and, under Shivat Zion's English guide to Tofes 106, should give employees the previous year's form by the end of March each year. It pulls together annual income, income tax withheld, National Insurance and health-tax amounts, pension-related figures, and tax credits.

To read a Tofes 106, identify the employer and employee details, confirm the tax year and months covered, then reconcile income, tax withheld, National Insurance, health tax, pension lines, and credits against your monthly tlushim. A tlush shows one pay period; Form 106 gives the year-end totals view people use for tax refunds, proof of income, Arnona discount applications, mortgage paperwork, and cross-border tax preparation.

If you are coming from a US or UK tax background, the quickest mental model is that Form 106 is Israel's closest equivalent to a W-2 or, roughly, a P60. That comparison is useful for understanding the document's purpose, but the categories, codes, and payroll terminology are Israeli.

Tofes 106 Field Decoder: What to Check First

Layouts vary by employer and payroll software, but most forms break down into the same practical blocks. If you have a Hebrew PDF open, use the document like a decoder instead of trying to translate every line in sequence.

• Employer and employee identification: Check the employer name, employer number, employee name, employee ID number, and tax year before trusting any totals.
• Months covered or attendance summary: Confirm the form includes the period you actually worked. Missing months can explain annual totals that look too low.
• Gross pay and income-related codes: On many outputs, code 158 or 172 appears near salary or other income-related lines. Compare the annual income figure with the cumulative salary and benefits shown across the year's tlushim.
• Income tax withheld: Code 042 is commonly associated with income tax withheld. Check whether the withholding level looks proportionate to annual income and reconciles to the monthly slips.
• Mas Hachnasa: This is Israeli income tax. Do not confuse it with National Insurance or health tax when you review deductions.
• Bituach Leumi and health tax: These lines often sit near each other. Read them as separate social-insurance and health-related payroll deductions.
• Nekudot Zikkuy: These are tax-credit points. If the tax-point count is wrong, the annual withholding may be wrong even if the salary lines are correct.
• Pension and Keren Hishtalmut entries: Review employee deductions separately from employer contributions so you do not compare unlike amounts.
• Seif 14a or severance-related references: These usually point to severance treatment or non-routine payroll events. If you changed jobs or received a special payment, start here when the annual certificate differs from a normal salary-only year.

If a Hebrew payroll form translation still feels confusing, read the form as a structured payroll summary, not as a word-for-word legal text. That same document-first mindset helps with related Israeli records too, and our guide to Israel's main financial document types gives broader context for where Form 106 sits among the documents people encounter in payroll and tax workflows.

How to Reconcile a Tofes 106 Against Your Monthly Tlushim

The simplest way to think about Tofes 106 vs tlush is this: a Tlush Maskoret shows the detail of one salary run (our guide to reading an Israeli payslip walks through every field), while Form 106 consolidates the year. If you want to know whether the annual certificate makes sense, you need both. The 106 gives the totals. The tlushim explain where those totals came from.

For a fast first pass, review the form in this order: identifiers, months covered, gross pay, income tax withheld, National Insurance and health tax, pension entries, and then taxable benefits. That sequence catches most meaningful mismatches before you get pulled into lower-priority lines.

Start with the identity layer. Confirm the employer name, employee ID number, tax year, and the number of relevant work months. A totals comparison is meaningless if the annual certificate belongs to the wrong employer entity or does not cover the full period you worked.

Next, compare annual pay figures. If your December tlush shows year-to-date totals, begin there. If it does not, add the relevant lines across the year's tlushim. The gross salary figure on the 106 should broadly reconcile to the annual salary and benefit figures recorded in the monthly payroll slips.

Then move to the deduction side. Check income tax withheld, National Insurance, health tax, employee pension deductions, employer contribution categories, and any major taxable benefits. These are often the fastest lines to expose a problem because they are repeated across the year and should build into a recognizable annual total.

After that, review special cases before assuming something is wrong. Multiple employers during the same year, unpaid leave, bonuses, retroactive corrections, year-end adjustments, benefit timing, corrected payroll runs, or termination-related payments can all create differences between your rough expectations and the final annual certificate.

A closer review is warranted when the annual totals still do not reconcile after you account for timing issues, when the wrong employer or employee identifiers appear, or when the form seems to skip part of the year. In practice, the key question is not whether every line looks familiar. It is whether you can trace each important annual total back to the monthly payroll record that produced it.

How Tofes 106 Is Used for Tax Refunds, Income Proof, and US Filing

People usually need Form 106 for one of three reasons, and each one puts the emphasis on different fields.

• Tax refunds in Israel For an Israeli tax refund claim, Form 106 matters because it summarizes annual income and income tax withheld in one place. Those are often the first figures readers need when they are checking whether a refund may be due or preparing documents that connect to Form 135. In practice, the high-value fields are employer identity, annual salary, and annual income tax withheld.

• Income proof for institutions For an Arnona discount application, mortgage paperwork, or similar documentation requests, the 106 is useful because it gives a clean annual earnings summary. It is often enough to establish the broad year-end picture, but institutions may still ask for recent tlushim when they want proof of current monthly income rather than last year's totals.

• US dual filing For US dual filers, Form 106 is a structured annual payroll record that can help organize figures that may feed into Form 1116 or Form 2555. The lines readers most often pull are:

  • annual employment income
  • Israeli tax withheld
  • employer identity
  • months worked or periods covered
  • selected pension or benefit entries that may need separate review

  The caution is just as important as the totals: pension, benefit, and other payroll lines do not always map one to one onto US forms, so the 106 should be treated as a source document, not as a direct filing template.

Across all three use cases, the value of the certificate is the same. It turns a year of payroll activity into one record you can review, compare, and carry into a broader tax or documentation process.

What to Do if Something Looks Wrong

Some discrepancies are minor formatting annoyances. Others should trigger a prompt follow-up with payroll. Act quickly if the employer name is wrong, the employee ID number is wrong, the tax year is wrong, the tax-point count does not match your situation, months appear to be missing, totals do not reconcile to the year's tlushim, or one employer's income is missing from a multi-employer year. If you changed jobs during the year, remember that each employer should normally issue its own certificate for the period it employed you.

A practical correction workflow looks like this:

1. Mark the exact lines that appear wrong.
2. Pull the relevant tlushim and compare the annual figure against the monthly source record.
3. Keep copies of the Form 106 and the supporting payroll slips.
4. Ask the employer or payroll provider for a corrected certificate if the discrepancy remains.
5. Keep the corrected version together with the earlier copy so you can show what changed.

Keep the corrected Form 106 with the earlier copy and supporting tlushim; institutions will rely on the corrected certificate, not an informal explanation.

For teams reviewing many forms, track employee ID, employer, tax year, months covered, income, tax withheld, National Insurance, health tax, pension lines, and source-file reference in a spreadsheet so exceptions are visible.

If you want one final five-point check before relying on a 106, start here:

1. Confirm the employer name, employee ID, and tax year.
2. Make sure the months covered match the period you worked.
3. Reconcile annual income and tax withheld to the tlushim.
4. Check tax points, pension lines, and any special-payment entries.
5. Escalate anything that still does not trace back cleanly to the source records.