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

Tofes 106 explained, in plain English: it 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 the year-end totals employees usually need most, including annual income, income tax withheld, National Insurance and health-tax amounts, pension-related figures, and tax credits.

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 not for assuming the fields work the same way. The categories, codes, and payroll terminology are Israeli, so you still need to read the form on its own terms.

The other key distinction is between the annual certificate and your monthly payroll slip. A tlush shows what happened in one pay period. A 106 gives a year-end totals view. That is why people rely on it for tax refunds, proof of income, Arnona discount applications, mortgage paperwork, and cross-border tax preparation. It is the summary document that lets you see the full year at once.

If you want to know how to read Tofes 106 correctly, treat it as both an explainer and a verification document. First, identify what each section is reporting. Then compare the annual totals against your monthly payroll records to make sure the year-end picture makes sense. That second step matters because a Form 106 is not just there to tell you what your employer reported. It also gives you a way to spot mismatched identifiers, missing months, or totals that deserve a follow-up with payroll.

How a Typical Tofes 106 Is Organized

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.

1. Employer and employee identification Look for the employer name, employer number, employee name, employee ID number, and tax year. What it means: This confirms whose certificate you are reading and who issued it. What to verify: Names, ID numbers, and the year must match your records before you trust any totals.

2. Income from employer This area usually contains salary, bonuses, and taxable benefits. What it means: It shows the compensation the employer reported for tax purposes. What to verify: Check whether the annual pay figure looks plausible against your tlushim, especially if you had bonuses or benefits during the year.

3. Employer contributions and savings-related lines This section often shows pension-related entries and other employer-paid amounts tied to compensation. What it means: It separates what came out of your salary from what the employer contributed on top. What to verify: Do not mix employee deductions with employer contributions when you compare annual totals.

4. Retirement, severance, or special-payment section Not every employee will see meaningful numbers here. What it means: It usually reflects non-routine payroll events such as severance-related amounts or other special payments. What to verify: If you changed jobs or had an unusual payroll event, use this block to explain why the annual certificate differs from a normal salary-only year.

5. Tax-credit section This is where tax points and related credit entries often appear. What it means: It helps explain why your annual income tax withholding landed where it did. What to verify: Make sure the number of tax points shown matches your circumstances.

6. Deductions and withholding Look for income tax, National Insurance, health tax, and employee deduction lines. What it means: This is the main explanation for what was withheld during the year. What to verify: These totals should build logically from the monthly tlushim and should not be confused with employer-paid items.

7. Work-attendance or monthly-summary area Some forms include a monthly breakdown or period summary. What it means: It helps confirm how many months or pay periods were included in the certificate. What to verify: Missing periods can explain why the annual totals appear too low.

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.

Which Fields and Codes Deserve the Closest Attention

If the form feels dense, work through the highest-value lines in this order:

• Gross pay and income-related codes On many outputs, code 158 or 172 appears near salary or other income-related lines. What it usually tells you: What pay or taxable compensation was reported. What to verify: Does the annual income figure broadly match the cumulative salary and benefits shown across the year's tlushim?

• Income tax withheld Code 042 is commonly associated with income tax withheld. What it usually tells you: How much tax was withheld during the year. What to verify: Does the withholding level look proportionate to the annual income total, and does it reconcile to the monthly slips?

• Mas Hachnasa This is Israeli income tax. What it usually tells you: The tax side of the annual certificate. What to verify: Do not confuse it with National Insurance or health tax when you check deductions.

• Bituach Leumi and health tax These lines often sit near each other and are easy to blur together. What they usually tell you: Social-insurance and health-related payroll deductions. What to verify: Make sure these totals are read as separate categories from income tax.

• Nekudot Zikkuy These are tax-credit points. What they usually tell you: Why annual income tax withholding may be lower than a simple gross-pay estimate would suggest. What to verify: 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 and employer contributions separately. What they usually tell you: What was deducted from your pay versus what the employer funded on top. What to verify: Make sure you are not comparing an employee deduction line to an employer contribution line and assuming they should match.

• Seif 14a or severance-related references These often reflect severance treatment rather than routine monthly salary alone. What they usually tell you: Why a year with termination-related events may look different from a regular employment year. What to verify: If you left a job, changed employers, or received a special payment, this is one of the first places to check.

That is the practical difference between a basic explainer and a useful decoder. Israel Form 106 explained content becomes genuinely helpful only when it tells you which lines affect the totals you care about and what to test before assuming the form is correct.

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, 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 In an Israel tax refund Form 106 workflow, the form matters because it summarizes annual income and annual 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 When people search for Form 106 for US tax filing, they usually need a structured annual payroll record that helps them 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, and How Teams Review Many Forms Efficiently

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.

That process matters because informal explanations are easy to lose track of, while a corrected Form 106 is the record other institutions will actually rely on.

This is also where the article's verification angle matters for professionals. Accountants, CPAs, and finance teams handling multiple employees should not rely only on visual review. A better method is to extract recurring fields into a spreadsheet, normalize names and identifiers, compare annual totals across employees or source documents, and preserve a path back to the original PDF page when something looks off. Our article on what finance teams should look for in payroll OCR covers the review questions that matter once payroll data is being read at scale.

If the work starts with a folder full of Hebrew PDFs, the goal is not a perfect word-for-word Hebrew payroll form translation. The goal is a repeatable validation workflow. A practical batch-review sheet usually includes columns for employee name, employee ID, employer name, employer number, tax year, months covered, annual income, income tax withheld, Bituach Leumi, health tax, pension deductions, employer pension contributions, Keren Hishtalmut entries, and source file or page reference. From there, teams can sort, filter, and investigate anomalies instead of rereading every page manually.

The most useful exception flags are usually:

• missing or mismatched employee IDs
• different employer names for what should be the same entity
• a tax year that does not match the file set
• annual income or tax withheld that does not reconcile to the tlushim
• blank tax-credit lines where the employee should have points
• unusual severance or special-payment lines that need manual interpretation

That is also where a structured spreadsheet process helps. If you need to extract payroll data from PDF to Excel, the useful mindset is consistency first: keep one column per recurring field, preserve source-document references, and review exceptions rather than normal cases.

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.