Banking, Money and Taxes in Israel
Expats should have little difficulty managing their money in Israel, as the country has a highly developed banking system that is both accessible and reliable.
Money in Israel
The official currency of Israel is the Israeli New Shekel, abbreviated as ILS, but also abbreviated locally as NIS.
The shekel is subdivided into 100 agorot.
Notes: ILS 20, 50, 100 and 200
Coins: ILS 1, 2, 5 and 10, and 1, 5, 10 and 50 agorot
Banking in Israel
Israel’s biggest banks are Bank Hapoalim, Bank Leumi, Bank of Israel and Israel Discount Bank and major banks have branches throughout the country. Urban branches usually offer more extensive services, whereas rural branches may have limited services and hours of operation. Most banks offer telephone or internet banking, with many of these services available in English.
Banks are generally opened on Sundays, Tuesdays and Thursdays, from 8.30am to 4pm. On Monday and Wednesday, banks open from 8.30am to 2pm before closing for two hours, and then reopening from 4pm to 6pm, while all banks are closed on Saturday for Shabbat.
Opening a bank account
All expat workers are able to open a bank account in Israel. Opening a bank account is usually fairly straightforward and typically requires one’s passport or residence permit. Expats are advised to prepare recent bank statements from other accounts in order to expedite the process. It's also possible to open a bank account with the Postal Bank (any post office) without making an initial deposit.
Credit cards and ATMs
Expats applying for a credit card in Israel will need to make an initial deposit, the amount of which will be specified by the bank. International credit cards are widely accepted in Israel. Israeli credit cards are available that allow only for purchases in Israel and in local currency, as well as international credit cards that can be used worldwide. ATMs in Israel's urban centres are widespread and accessible 24 hours a day, but they can be rarer in rural areas.
Money transfers in all forms (cheques, cash and money orders) are accepted in most banks in Israel. As an alternative to opening a bank account in Israel, clients working or living in Israel have the option to open an international bank account before moving to Israel. This allows access to a variety of services, including offshore bank accounts and banking in other currencies. Banks such as HSBC, BNP, Barclays and Citibank operate in the country.
Taxes in Israel
Israel has some of the highest taxes in the world and all sources of income for an Israeli resident are taxed in the country.
Income tax is calculated on a sliding scale depending on how much one earns. Expats living in Israel for less than 183 days in any 12-month period are only liable for tax on their locally earned income. However, expats in Israel for 183 days or more in any 12-month period are considered tax residents, meaning that they will be liable to pay tax on their worldwide income.
Social security and medical Insurance
Each employee in Israel must pay social security and health insurance in the form of a deduction from their salary based on their individual income. Both employee and employer are required to pay social security.
A non-resident employee in Israel must retain private health insurance for their entire length of stay. Non-residents are entitled to limited services and social security benefits. The social security rate that will be deducted from their salary every month will be the minimum applicable fee.