A tax is a compulsory payment collected by law and helps finance public activities and services.
There are taxes on income, purchases, property and gains. There are also insurance fees and payments to the local authority. These are different mechanisms: there is no single percentage that applies to every purchase or every person. To understand a budget ask who pays, on which amount, to whom, when, and whether there is an exemption or relief. Taxes help fund, among other things, education, health, infrastructure and security; you can also discuss efficiency, fairness and how the budget is allocated.
If you received 100 ₪ as a gift and bought a product, do not assume every type of tax in the world applies to that 100 ₪. Each charge is assessed according to its own rules.
A fictional household records wages, a shop purchase and a local authority payment during one month. These are not three names for the same tax: each charge can have a different base, timing and rules. Build a table showing payment type, collecting body, period and supporting document. Do not add percentages calculated on different amounts as though they were one rate. This exercise organises questions; it does not determine actual liability.
Concepts that help you compare
Gross, net and tax brackets
Gross is the amount before deductions; net is the amount that remains after the relevant deductions. Income tax on work has brackets: a higher rate may apply only to the portion that exceeds the bracket threshold, not to the entire salary. Tax credit points and benefits may reduce tax. A pay slip may also include national insurance, health and pension contributions. Pension is savings and a contribution, not simply another tax. Age, income, status and additional conditions affect calculations; do not use the example as a real salary calculator.
Comparison example: Made-up example for learning: up to 1,000 ₪ there is no tax, and on an additional 200 ₪ there is 10%. The tax is 20 ₪, not 120 ₪. These are not the tax brackets in Israel.
Value added tax is a tax on transactions that are liable for it. In the consumer price it is usually already included. At a rate of 18%, the VAT amount is 18% of the price before tax. Therefore it is added by multiplying by 1.18. To extract the price before VAT from a total price, divide by 1.18. Do not subtract 18% from the total price: the calculation base is different. There are exemptions, a zero rate and special rules; the calculator is an exercise for a transaction liable at the selected rate. The 18% rate applies from January 1, 2025; check the law at the time of the transaction.
Comparison example: 100 ₪ before VAT + 18 ₪ VAT = 118 ₪. Out of 118 ₪, the VAT component is 18 ₪, which is about 15.25% of the total price.