Does every US citizen making aliyah receive the exemption?

No. The modeled rule requires a qualifying oleh from the United States who pays U.S. social-security tax on the same employment or self-employment income, during the first five years after the qualifying aliyah or certificate date.

Does the exemption remove Israeli health tax?

No. The temporary exemption covers Israeli National Insurance contributions on qualifying work income. Israeli health-insurance contributions remain payable.

How is the exemption claimed?

Kol Zchut directs eligible olim to contact the National Insurance Institute branch for their area. Supporting evidence of U.S. social-security payment on the same income may be needed.

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National Insurance Law Amendment 262 · Temporary provision

The five-year Bituach Leumi exemption for qualifying US olim

From January 2026, a qualifying oleh from the United States may be exempt from Israeli National Insurance on work or self-employment income for which the person pays U.S. social-security contributions. The exemption lasts for five years from the qualifying aliyah or certificate date. Israeli health tax remains payable.

Important: being American or holding U.S. citizenship is not enough by itself. The exemption is tied to U.S. social-security payment on the same income and must be handled with the National Insurance Institute.

Guide informationMethodology · Version history

Version2026.07.3

Last checkedJuly 18, 2026

Information typeRegulated eligibility guide

Source basisAmendment 262, Kol Zchut, NII rates and IRS guidance

Known limits: The law creates the exemption, but payroll, documentation and approval procedures can differ. The calculators estimate the employee/self-employed amount only and do not approve a claim.

Who can qualify?

You are an Israeli resident who made aliyah from the United States under the qualifying status rules.
Your qualifying aliyah or certificate date falls within the temporary-law window beginning January 1, 2026.
You are still within five years of that date.
The income is from employment or self-employment.
You actually pay U.S. Social Security/FICA or U.S. self-employment tax on that same income.

The temporary provision runs from January 1, 2026 through December 31, 2035 and may be extended by order. The personal exemption period is five years from the qualifying date.

What remains payable?

Israeli health tax remains payable.
National Insurance on other income that does not meet the same-income condition may still be due.
Published professional analysis notes that employer-side National Insurance contributions remain payable.
The exemption does not erase U.S. Social Security or self-employment tax.

Kol Zchut also explains that the exempt period is treated as an insured period for benefits whose eligibility depends on contribution periods.

Employees: the employer structure matters

Israeli employer: wages from a foreign employer are generally not automatically subject to U.S. FICA. Therefore, many employees on ordinary Israeli payroll will not meet the same-income U.S. social-security condition. Special arrangements can differ.

U.S. employer or covered affiliate: U.S. FICA may continue depending on the employer and payroll structure. The exemption may be relevant only where U.S. social-security contributions are actually paid on the same salary.

The amendment does not itself explain every payroll implementation detail. An employer may continue withholding until the employee provides National Insurance approval, or a refund process may be required.

Self-employed people

U.S. citizens and residents who are self-employed abroad are generally subject to U.S. self-employment tax under U.S. rules. This makes the exemption particularly relevant to qualifying freelancers and business owners who would otherwise pay social-security charges in both systems on the same business income.

Estimate self-employed income Estimate employee take-home pay

How to use the site calculators

The salary and freelancer calculators do not apply the exemption from a single checkbox. They ask for:

the aliyah/certificate date,
the calculation date,
confirmation that the move was from the United States under the qualifying rules, and
confirmation that U.S. social-security tax applies to the same income.

If those simplified inputs are met, the calculator sets Israeli National Insurance to zero while retaining health tax. The result is labeled potentially eligible, not approved.

How to claim it

Kol Zchut directs eligible olim to contact the National Insurance Institute branch for their area. Keep evidence of the qualifying date and of U.S. social-security payment on the same income, such as payroll records or U.S. tax documents. Do not cancel standing payments or instruct payroll to stop withholding solely because the calculator shows a potential exemption.

How this relates to the separate 2026 income-tax benefit

Amendment 262 is separate from the temporary earned-income tax benefit and from the established rules for foreign-source income. Each benefit has its own eligibility conditions, income definitions and time period. Qualification for one does not automatically establish qualification for another.

Sources

Educational summary only. The National Insurance Institute determines eligibility and implementation. U.S. and Israeli social-security treatment depends on the actual employer, business and income structure.