Top 10% Earn 7.3 Times More Than Bottom 10% in Israel

The top 10% income bracket in Israel earns 7.3 times more than the bottom 10%, according to the 2023 Household Expenditure Survey. In the two lowest income deciles, spending exceeds income, while the top decile holds 22.1% of the net income. The average net monthly income for a household in the bottom decile is approximately NIS 6,360, with expenses around NIS 10,600. Conversely, the top decile has a net income of about NIS 46,500 and spends around NIS 21,800. Households in the bottom decile face a monthly deficit of about NIS 4,260, which narrows to approximately NIS 1,100 in the second decile. Starting from the third decile, income surpasses expenses by about 7%, increasing to 30-44% in the middle deciles, and more than double the expenses in the top decile. This surplus funds savings, investments, and loan repayments.

A change in measurement methodology, incorporating tax authority and national insurance data for income alongside self-reported expenses, led to a significant jump in average gross income to NIS 26,330 and net income to NIS 21,606 per household. This makes direct comparison with previous years, based solely on self-reporting, limited. The average monthly expenditure, excluding the imputed rent for owned homes, was NIS 14,823, about 69% of net income.

Income deciles are determined by net income per standard person, not total household income, with additional family members contributing less to expenses. For instance, a childless couple earning NIS 20,000 net per month reaches NIS 10,000 per standard person, while a family of five with NIS 30,000 net income has NIS 8,000 per standard person. This means the couple ranks higher in the decile system. The survey's income thresholds are for households headed by an employee, representing about 2.04 million out of 2.93 million households. In this group, the bottom decile ends at NIS 3,158 net per standard person, the fifth decile at NIS 7,912, and the top decile begins above NIS 15,869.

In terms of gross income before taxes, the bottom decile reaches up to NIS 8,723 monthly, the middle around NIS 24,000, and the top begins at NIS 59,076, averaging about NIS 85,000. The Gini coefficient for income inequality stood at 0.349. The top decile holds 22.1% of total net household income, while the bottom decile holds 2.6%. The bottom five deciles combined account for about 27.5%, less than the top two deciles (ninth and tenth) which together hold approximately 38%.

Housing is the largest expense category at 25.3% of consumption, followed by transportation and communication (18.6%) and food (17.9%). Average monthly consumption expenditure, including imputed rent, was NIS 18,088. Homeownership is significantly higher in the top decile (85.9%) compared to the bottom decile (37.6%). Renters in the top decile pay an average of NIS 5,630 monthly, double the NIS 2,763 paid by renters in the bottom decile.