Under the Mandatory Pension Law for Self-Employed, business owners are legally required to deposit statutory minimum contributions into a registered pension fund or manager's insurance policy.

๐Ÿ’ฐ Pension Contribution Rate Formula 2026:

โ€ข 4.45% on the portion of income up to half the average market wage.
โ€ข 12.55% on the portion of income between half average wage and full average market wage.

๐Ÿ’ก Tax Benefit (Section 47): Pension contributions entitle self-employed owners to tax deductions and tax credits up to 16.5% of income, dramatically reducing year-end income tax liability!

Keren Hishtalmut (Advanced Study Fund) Exemption

Depositing up to 7% of business income (up to annual cap of 19,920 ILS) into a Keren Hishtalmut grants immediate expense deduction plus 100% tax-free capital gains upon withdrawal!