{"id":8529,"date":"2025-09-30T13:01:48","date_gmt":"2025-09-30T13:01:48","guid":{"rendered":"https:\/\/aboulafia.co.il\/?p=8529"},"modified":"2025-09-30T13:01:48","modified_gmt":"2025-09-30T13:01:48","slug":"taxation-of-pension-income","status":"publish","type":"post","link":"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/taxation-of-pension-income\/","title":{"rendered":"Taxation of pension income"},"content":{"rendered":"<p style=\"text-align: left;\">The taxation of pension income is one of the most complicated areas of law due to the various and numerous exemptions available.<\/p>\n<div style=\"text-align: left;\"><\/div>\n<div style=\"text-align: left;\"><strong><u>Fully exempt pensions<\/u><\/strong><\/div>\n<div style=\"text-align: left;\">Pensions which are not subject to tax whatsoever include the Bituach Leumi old-age and bereavement pensions and reparations received by Holocaust survivors. Also fully exempt are disability pensions, whether received from Israel or abroad.<\/div>\n<div style=\"text-align: left;\"><\/div>\n<div style=\"text-align: left;\">A person receiving a survivors pension can receive the first 8,470 NIS per month (correct for 2014) tax free. Of any excess, 35% of the pension is also tax free, with the rest subject to tax.<\/div>\n<p style=\"text-align: left;\"><strong><u>Other pensions<\/u><\/strong><\/p>\n<div style=\"text-align: left;\">In short, the exemptions start when the taxpayer reaches pensionable age; currently 67 for men and rising from 62 to 64 for women. Before that age, pensions are fully taxable (in general), and also subject to Bituach Leumi (although the Bituach Leumi paid does reduce the tax burden in such cases)<\/div>\n<div style=\"text-align: left;\"><\/div>\n<p style=\"text-align: left;\"><strong><u>Foreign pensions (i.e. paid by non-Israeli providers)<\/u><\/strong><\/p>\n<p style=\"text-align: left;\">Once you reach pensionable age, 35% of the pension is tax free, with the rest subject to tax according to your marginal rate of tax. However, in most cases the tax on the entire pension (i.e. before the 35% limit) is limited to the tax that would have been paid in the host country had the taxpayer been a resident in that country and only had the pension income. This can lead to many people not being taxed on such pensions. Of course, Double Tax Treaties should also be checked to see if any pension can be exempted in either Israel and\/or the country of origin.<\/p>\n<p style=\"text-align: left;\"><strong><u>Israeli pensions<\/u><\/strong><\/p>\n<p style=\"text-align: left;\">In short, everyone is eligible to a certain amount of their pensions to be exempt from tax. The exemption is a fixed amount for each person, and is\u00a0<u>not<\/u> linked to the actual pension to be paid. The exemption is calculated as a percentage of 8,470 NIS per month (correct for 2014) \u2013 but obviously the exemption cannot exceed the total pension to be paid. The exact percentage depends on the amount of tax-exempt severance pay that the pensioner received during the last 32 years of their salaried work-life; the calculation is complicated and this is not the forum to explain it in detail. Suffice to say that (1) if you took the maximum tax-free severance pay, your percentage is set to 8.5% and (2) if you took no tax-free severance pay, your percentage is set to 43.5%. Anything in the middle will give you a percentage somewhere between 8.5% and 43.5%.<\/p>\n<p style=\"text-align: left;\">The above percentage range is relevant for the 2012-2015 years, and is set to rise in the future:<\/p>\n<ul style=\"text-align: left;\">\n<li style=\"direction: ltr;\">In the years 2016-2019, the\u00a0range is set to rise to 14% \u2013 49%<\/li>\n<li style=\"direction: ltr;\">In the\u00a0years 2020-2024 the range is set to rise to 17% \u2013 52%<\/li>\n<li style=\"direction: ltr;\">From 2025 and\u00a0onwards the range is set to rise to 32% \u2013\u00a067%.<\/li>\n<\/ul>\n<p style=\"text-align: left;\">That being said, it would not be unheard of for the rules to be changed in the interim, so be sure to be aware of any (proposed) changes.<\/p>\n<p style=\"text-align: left;\">It is also important to take proper advice when considering taking tax-free severance pay, based on the above \u2013 the reduction in percentage of exempt pension affects your taxable pension for life!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The taxation of pension income is one of the most complicated areas of law due to the various and numerous exemptions available. Fully exempt pensions Pensions which are not subject to tax whatsoever include the Bituach Leumi old-age and bereavement pensions and reparations received by Holocaust survivors. Also fully exempt are disability pensions, whether received [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[200,253],"tags":[],"class_list":["post-8529","post","type-post","status-publish","format-standard","hentry","category-israeli-taxation-en","category-binyamin-radomsky-en"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Taxation of pension income - \u05d0\u05d1\u05d5\u05dc\u05e2\u05e4\u05d9\u05d4 \u05e8\u05d5\u05d0\u05d9 \u05d7\u05e9\u05d1\u05d5\u05df<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/taxation-of-pension-income\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Taxation of pension income - \u05d0\u05d1\u05d5\u05dc\u05e2\u05e4\u05d9\u05d4 \u05e8\u05d5\u05d0\u05d9 \u05d7\u05e9\u05d1\u05d5\u05df\" \/>\n<meta property=\"og:description\" content=\"The taxation of pension income is one of the most complicated areas of law due to the various and numerous exemptions available. Fully exempt pensions Pensions which are not subject to tax whatsoever include the Bituach Leumi old-age and bereavement pensions and reparations received by Holocaust survivors. Also fully exempt are disability pensions, whether received [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/taxation-of-pension-income\/\" \/>\n<meta property=\"og:site_name\" content=\"\u05d0\u05d1\u05d5\u05dc\u05e2\u05e4\u05d9\u05d4 \u05e8\u05d5\u05d0\u05d9 \u05d7\u05e9\u05d1\u05d5\u05df\" \/>\n<meta property=\"article:published_time\" content=\"2025-09-30T13:01:48+00:00\" \/>\n<meta name=\"author\" content=\"Rachel Levin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Rachel Levin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/taxation-of-pension-income\/\",\"url\":\"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/taxation-of-pension-income\/\",\"name\":\"Taxation of pension income - \u05d0\u05d1\u05d5\u05dc\u05e2\u05e4\u05d9\u05d4 \u05e8\u05d5\u05d0\u05d9 \u05d7\u05e9\u05d1\u05d5\u05df\",\"isPartOf\":{\"@id\":\"https:\/\/aboulafia.co.il\/en\/#website\"},\"datePublished\":\"2025-09-30T13:01:48+00:00\",\"author\":{\"@id\":\"https:\/\/aboulafia.co.il\/en\/#\/schema\/person\/2054089d644528990cb12e0974ece747\"},\"breadcrumb\":{\"@id\":\"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/taxation-of-pension-income\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/taxation-of-pension-income\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/taxation-of-pension-income\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"\u05d3\u05e3 \u05d4\u05d1\u05d9\u05ea\",\"item\":\"https:\/\/aboulafia.co.il\/en\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Taxation of pension income\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/aboulafia.co.il\/en\/#website\",\"url\":\"https:\/\/aboulafia.co.il\/en\/\",\"name\":\"\u05d0\u05d1\u05d5\u05dc\u05e2\u05e4\u05d9\u05d4 \u05e8\u05d5\u05d0\u05d9 \u05d7\u05e9\u05d1\u05d5\u05df\",\"description\":\"Just another WordPress site\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/aboulafia.co.il\/en\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/aboulafia.co.il\/en\/#\/schema\/person\/2054089d644528990cb12e0974ece747\",\"name\":\"Rachel Levin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/aboulafia.co.il\/en\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/8645467386afae1c19e26d165518fc0e843acc6ffb76cb6b7207c4138d63a605?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/8645467386afae1c19e26d165518fc0e843acc6ffb76cb6b7207c4138d63a605?s=96&d=mm&r=g\",\"caption\":\"Rachel Levin\"},\"url\":\"https:\/\/aboulafia.co.il\/en\/author\/rachel\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Taxation of pension income - \u05d0\u05d1\u05d5\u05dc\u05e2\u05e4\u05d9\u05d4 \u05e8\u05d5\u05d0\u05d9 \u05d7\u05e9\u05d1\u05d5\u05df","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/taxation-of-pension-income\/","og_locale":"en_US","og_type":"article","og_title":"Taxation of pension income - \u05d0\u05d1\u05d5\u05dc\u05e2\u05e4\u05d9\u05d4 \u05e8\u05d5\u05d0\u05d9 \u05d7\u05e9\u05d1\u05d5\u05df","og_description":"The taxation of pension income is one of the most complicated areas of law due to the various and numerous exemptions available. Fully exempt pensions Pensions which are not subject to tax whatsoever include the Bituach Leumi old-age and bereavement pensions and reparations received by Holocaust survivors. Also fully exempt are disability pensions, whether received [&hellip;]","og_url":"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/taxation-of-pension-income\/","og_site_name":"\u05d0\u05d1\u05d5\u05dc\u05e2\u05e4\u05d9\u05d4 \u05e8\u05d5\u05d0\u05d9 \u05d7\u05e9\u05d1\u05d5\u05df","article_published_time":"2025-09-30T13:01:48+00:00","author":"Rachel Levin","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Rachel Levin","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/taxation-of-pension-income\/","url":"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/taxation-of-pension-income\/","name":"Taxation of pension income - \u05d0\u05d1\u05d5\u05dc\u05e2\u05e4\u05d9\u05d4 \u05e8\u05d5\u05d0\u05d9 \u05d7\u05e9\u05d1\u05d5\u05df","isPartOf":{"@id":"https:\/\/aboulafia.co.il\/en\/#website"},"datePublished":"2025-09-30T13:01:48+00:00","author":{"@id":"https:\/\/aboulafia.co.il\/en\/#\/schema\/person\/2054089d644528990cb12e0974ece747"},"breadcrumb":{"@id":"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/taxation-of-pension-income\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/taxation-of-pension-income\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/aboulafia.co.il\/en\/binyamin-radomsky-en\/taxation-of-pension-income\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"\u05d3\u05e3 \u05d4\u05d1\u05d9\u05ea","item":"https:\/\/aboulafia.co.il\/en\/"},{"@type":"ListItem","position":2,"name":"Taxation of pension income"}]},{"@type":"WebSite","@id":"https:\/\/aboulafia.co.il\/en\/#website","url":"https:\/\/aboulafia.co.il\/en\/","name":"\u05d0\u05d1\u05d5\u05dc\u05e2\u05e4\u05d9\u05d4 \u05e8\u05d5\u05d0\u05d9 \u05d7\u05e9\u05d1\u05d5\u05df","description":"Just another WordPress site","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/aboulafia.co.il\/en\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/aboulafia.co.il\/en\/#\/schema\/person\/2054089d644528990cb12e0974ece747","name":"Rachel Levin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/aboulafia.co.il\/en\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/8645467386afae1c19e26d165518fc0e843acc6ffb76cb6b7207c4138d63a605?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/8645467386afae1c19e26d165518fc0e843acc6ffb76cb6b7207c4138d63a605?s=96&d=mm&r=g","caption":"Rachel Levin"},"url":"https:\/\/aboulafia.co.il\/en\/author\/rachel\/"}]}},"_links":{"self":[{"href":"https:\/\/aboulafia.co.il\/en\/wp-json\/wp\/v2\/posts\/8529","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/aboulafia.co.il\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/aboulafia.co.il\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/aboulafia.co.il\/en\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/aboulafia.co.il\/en\/wp-json\/wp\/v2\/comments?post=8529"}],"version-history":[{"count":1,"href":"https:\/\/aboulafia.co.il\/en\/wp-json\/wp\/v2\/posts\/8529\/revisions"}],"predecessor-version":[{"id":8530,"href":"https:\/\/aboulafia.co.il\/en\/wp-json\/wp\/v2\/posts\/8529\/revisions\/8530"}],"wp:attachment":[{"href":"https:\/\/aboulafia.co.il\/en\/wp-json\/wp\/v2\/media?parent=8529"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/aboulafia.co.il\/en\/wp-json\/wp\/v2\/categories?post=8529"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/aboulafia.co.il\/en\/wp-json\/wp\/v2\/tags?post=8529"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}