How RSUs are taxed in Israel
A plain-language overview of RSU taxation in Israel: which tax applies at grant, vesting, and sale, and the rates behind each stage.
When RSUs are taxed
Israeli tax law generally treats vesting as the taxable event for RSUs. At vesting, the fair market value of the shares is taxed as employment income. When you later sell, the difference between the sale price and the value at vesting may be taxed as a capital gain.
Rates at a glance
Employment income at vesting is taxed at graduated rates up to 47%, plus a 3% surtax on annual income above about ILS 721,560 (2026), so the top marginal rate can reach 50%. Capital gains on securities held by individuals are generally taxed at 25%; substantial shareholders (10% or more) may pay 30%.
Why the plan type matters
A Section 102 trustee plan can apply the 25% capital gains rate to post-vesting appreciation once the 24-month holding period is met. Without an approved trustee, or under a Non-102 plan, the gain is taxed as ordinary income at marginal rates.
What this calculator assumes
The estimator uses 47% for income at vest and 25% for capital gains in a qualifying Section 102 plan. It is a simplified model — your actual liability depends on total income, credits, and plan terms.