New Calculator Reveals Actual Taxes on Employee Stock Options and RSUs in Israel

A new online calculator helps Israeli tech employees and others who receive stock options or Restricted Stock Units (RSUs) from their employers understand the exact tax they will pay upon selling these shares. Users input the sale value, exercise cost, and grant value, specify whether the shares are options or RSUs, if the company is private or public, and whether they held the shares for the required two years under Section 102's capital track. The tool then splits the profit into a capital component taxed at 25% and an income component taxed at the employee's marginal income tax rate, showing the net proceeds and effective tax rate.

This calculator is especially useful for those considering selling before the two-year holding period ends, as early sale disqualifies the favorable capital gains tax treatment and taxes the entire gain as income, potentially at rates up to 47% or even 50%. The calculator also accounts for differences between private and public companies, where in public companies the grant value is taxed as income at allocation, and only gains above that are taxed at 25%.

For example, a private company employee who sold shares worth 400,000 shekels with an exercise cost of 60,000 shekels and met the two-year holding requirement would pay 85,000 shekels in tax (25%), keeping 255,000 shekels net. If taxed as income at a 47% rate, the tax would have been nearly 160,000 shekels, meaning the employee saved about 74,800 shekels by waiting. This illustrates the significant financial benefit of adhering to the capital gains tax track.

The calculator aims to provide clarity and assist employees in making informed decisions about when to sell their equity compensation. It was published originally by Bizportal on July 9, 2026.