The client paid ₪118. How much of it is yours?

Why it looks simple

A payment looks like one number. The client paid, the money is in the account, so it is income. When the month is tight, the fix looks just as simple: more clients or a higher price.

But one payment is several parties' money arriving together, and each part leaves on its own rules and on its own date.

The forces acting at once

The data, 2026

The rates the picture uses, each read at its source on 26 September 2026:

VAT: 18 percent of the transaction price.^[1]

Self employed, aged 18 to retirement, National Insurance and health tax: 7.7 percent (4.47 plus 3.23) on monthly income up to ₪7,703, 18 percent (12.83 plus 5.17) from ₪7,703 to ₪51,910. Whoever earns less than ₪3,442 a month pays on ₪3,442.^[2]

Employee, aged 18 to retirement, the share deducted from the salary: 4.27 percent up to ₪7,703 a month, 12.17 percent from ₪7,703 to ₪51,910. The employer pays 4.51 and 7.6 percent on top of the salary.^[3]

Income tax on income from work, 2026, per month: 10 percent up to ₪7,010, 14 percent up to ₪10,060, 20 percent up to ₪19,000, 31 percent up to ₪25,100, 35 percent up to ₪46,690 and 47 percent above. A credit point is worth ₪2,904 a year, ₪242 a month.^[4]

The advances in the picture. The osek murshe declares ₪10,000 a month: 7.7 percent of ₪7,703 is about ₪593 and 18 percent of the other ₪2,297 is about ₪413, together about ₪1,007 a month. The osek patur declares ₪8,000 a month: 7.7 percent of ₪7,703 is about ₪593 and 18 percent of the other ₪297 is about ₪53, together about ₪647 a month. Each is paid on the 22nd of every month for the month before.^[2][5]

Left out on purpose: the surtax on high incomes, pension deposits, credit points and every personal deduction or exemption. Your accountant computes the real figure for your file.

The system, step by step

The osek patur in the picture adds no VAT, so the client pays ₪100. Its example stays in a lower band, because the yearly turnover of an osek patur has a ceiling: a month whose profit is between ₪7,010 and ₪7,703. National Insurance takes 7.7 percent of the ₪80, ₪6.16, and income tax is in the 14 percent band, ₪11.20, which leaves ₪62.64.^[2][4]

An employee sees the same mechanism from the other side. The employer deducts National Insurance, health tax and income tax before the salary arrives, so the net pay is the only number most people know. On the last ₪100 of a gross salary above ₪10,060, the deductions are ₪12.17 and ₪20, which leaves ₪67.83.^[3][4]

The root cause

The money arrives as one sum, but it belongs to several parties and leaves on different dates. The bank balance shows all of it together, so the part that is yours is the one number the account never shows.

And the share depends on where in the month or the year the payment lands. The same ₪100 leaves more with you in a quiet month than in a busy one, because a busy month climbs into higher bands. A fixed rule of thumb for what to set aside can be too much in one month and too little in another.

Ways out, from business life

Not tax advice. This page explains the mechanism in general. Ask your accountant how it applies to your file.

A question for you

The next time a client pays you, can you say, before you spend any of it, which part is VAT, which part belongs to National Insurance and income tax, and which part is really yours?