How RSUs are taxed in Israel
An Israeli employee's RSUs are taxed under the track the employer chose when it granted them. The track decides how much of the sale is taxed as salary and how much as a 25% capital gain.
The four tracks
| Track | Taxed as salary | Taxed as a capital gain |
|---|---|---|
| Section 102, capital gains (with a trustee) | The value at grant — or the whole sale, if sold within 24 months of the grant | The rise above the value at grant, at 25% |
| Section 102, ordinary income (with a trustee) | The whole sale | Nothing |
| Section 102 without a trustee | The value at vest, through payroll | The rise since vest, at 25% |
| Section 3(i) | The value at vest, through payroll | The rise since vest, at 25% |
The 24-month rule
On the capital-gains track the shares stay with a trustee, and the clock runs for 24 months from the grant date. Sell earlier and the entire sale is taxed as salary, at your marginal rate, with National Insurance and health tax on top. After 24 months only the value at grant is salary; the growth since then is a capital gain at 25%.
For a company that was listed when it granted the shares, the value at grant is the average share price over the 30 trading days before the grant. Shares of a company that was still private at grant are taxed entirely as a capital gain.
The salary part: brackets and National Insurance
The salary part is added to the year's income and taxed in the 2026 brackets — 10%, 14%, 20%, 31%, 35% and 47% — so a large sale can lift you into higher brackets. It also carries National Insurance and health tax for the month it is paid: 4.27% on monthly income up to ₪7,703 and 12.17% from there up to the ₪51,910 ceiling. Nothing is charged above the ceiling.
Surtax
Income above ₪721,560 in the year pays a further 3% surtax, and capital income above that line pays another 2% — up to 5% on top of the 25% capital-gains rate.
Capital gains, the dollar and losses
The gain is measured in shekels, but it can be computed on the dollar gain at the sale-day exchange rate when that is lower. Sources disagree on which reading applies, so Moneta uses the lower of the two and tells you whenever the exchange rate moved the result.
Capital losses offset capital gains in the same year, and what the year cannot absorb carries forward to the next. They never offset salary.
Several sales in one year
Moneta shows each sale on its own, then recomputes the year's tax from the totals — so crossing a bracket, or the surtax line, across several sales is counted correctly.
Frequently asked questions
Do I pay tax when my RSUs vest?
On the Section 102 trustee tracks, no — the tax is due when the shares are sold. On Section 3(i) and Section 102 without a trustee, the value at vest goes through payroll as salary.
What happens if I sell RSUs before 24 months?
On the Section 102 capital-gains track the whole sale is taxed as salary: income tax at your marginal rate, plus National Insurance and health tax.
What is the capital-gains tax rate on RSUs in Israel?
25%, or 30% for a substantial shareholder — plus surtax on income above ₪721,560 a year.