Israel Dividend Tax Calculator

How much tax will an individual shareholder pay on a dividend in Israel — including surtax? Free, no sign-up, 2025–2026 rates. בעברית

Your numbers

Source of the dividend
Substantial shareholder test
Substantial shareholder — 10% or more, alone or with a relative, on the distribution date or in the 12 months before itSubstantial shareholder — 30%

Result

Net to the shareholderILS 350,000

Calculation steps

Gross dividend
ILS 500,000
Dividend tax rate
Substantial shareholder — 30%
Dividend tax — withheld at source on distribution
ILS 150,000
Total annual taxable income (incl. the dividend)
ILS 500,000
Income above the surtax threshold
ILS 0
Surtax 3% — due to the dividend
ILS 0
Additional 2% on passive income — due to the dividend
ILS 0
Total tax on the dividend
ILS 150,000
Effective tax rate
30.0%

Withholding and annual return

Withheld at source by the company
ILS 150,000
Balance payable in the annual return / advances
ILS 0

No surtax — the withholding is the final tax on the dividend.

Comparison — distributing over two tax years Half of the dividend in each year, same other income

One year
ILS 150,000
Two years
ILS 150,000
Surtax saved
ILS 0

No saving — the same tax either way.

Surtax threshold: ILS 721,560 total annual income (2025–2026). The surtax shown is the additional surtax caused by the dividend. This is an estimate, not tax advice.

How is dividend tax calculated in Israel?

  1. Dividend tax: gross dividend × 25% (regular shareholder) or × 30% (substantial shareholder, 10% or more).
  2. Surtax: add the dividend to the rest of the year's taxable income. On the part of the dividend above ILS 721,560 — 5% (3% surtax plus 2% on capital income).
  3. Net: gross dividend minus dividend tax and surtax.

The company has already paid 23% corporate tax on the profit, so the combined tax on profit distributed to a substantial shareholder is about 46.1% — and about 50% above the surtax threshold.

FAQ

What is the dividend tax rate for individuals in Israel?

25% for a regular shareholder (holding less than 10%) and 30% for a substantial shareholder (10% or more). Dividends from approved / preferred enterprises are usually taxed at a reduced rate.

When does the surtax apply to dividends?

On the part of total annual income above ILS 721,560 (2025–2026): 3%, plus an additional 2% on income that is not from personal exertion — i.e. 5% on the part of the dividend above the threshold.

Is the surtax withheld at source?

No. Only the dividend tax is withheld when the dividend is paid. The surtax is paid with the annual tax return or through advance payments.

This is an estimate only and is not tax advice. About Hishuvend.