How is income tax calculated in Palestine?
Residents deduct an exemption of ILS 36,000 a year. Salary above that is taxed at 5% up to ILS 75,000, 10% up to ILS 150,000 and 15% above.
Palestine has no social security contributions, so income tax is the only deduction from salary.
What is the income tax rate in Palestine?
| Taxable income | Rate |
|---|---|
| ₪0 – ₪75,000 | 5% |
| ₪75,000 – ₪150,000 | 10% |
| Over ₪150,000 | 15% |
What mandatory salary deductions apply?
- No compulsory employee contributions were found for a regular employee.
Gross salary and take-home salary
Gross salary is what your contract says before anything is taken off. Take-home salary is what reaches your bank account after income tax and the compulsory employee contributions. Employer contributions are paid on top of your salary and are not taken from it.
Example: ₪9,400.00 a month
An employee earning 9,400 a month, about US$3,000.
| Item | Monthly | Annual |
|---|---|---|
| Gross salary | ₪9,400.00 | ₪112,800.00 |
| Income tax | ₪327.50 | ₪3,930.00 |
| Compulsory contributions | ₪0.00 | ₪0.00 |
| Take-home pay | ₪9,072.50 | ₪108,870.00 |
Effective income tax rate 3.5%; all deductions 3.5%.
Frequently asked questions
What are the income tax rates in Palestine?
5% up to ILS 75,000, 10% up to ILS 150,000 and 15% above, on annual taxable salary.
Is there a tax-free amount?
Residents get an exemption of ILS 36,000 a year, with further exemptions for transport, housing and university fees.
Are there social security contributions?
No.
Official sources
- PwC Worldwide Tax Summaries (reviewed 12 August 2026): Palestinian territories – Individual – Taxes on personal income. Read 5 November 2026.
- PwC Worldwide Tax Summaries (reviewed 12 August 2026): Palestinian territories – Individual – Other taxes. Read 5 November 2026.
- PwC Worldwide Tax Summaries (reviewed 12 August 2026): Palestinian territories – Individual – Deductions. Read 5 November 2026.
Last reviewed 5 November 2026. An estimate for planning, not tax advice; your employer’s payroll and the tax authority decide what is actually withheld.
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