Cost of Living in Israel

This guide was written prior to the October 2023 escalation of hostilities between Israel and Palestinian militant groups. The ongoing conflict has markedly affected the safety and advisability of travel to the region. Please consult with relevant authorities and exercise extreme caution when considering travel to Israel and the surrounding areas.

The cost of living in Israel varies depending on where in the country an expat decides to settle and what type of lifestyle they aspire to. Urban centres are pricier than desert outposts or mountain towns. Tel Aviv, Israel's most cosmopolitan destination, was ranked 8th in Mercer's Cost of Living Survey for 2023. With three Swiss cities claiming slots three through five and Hong Kong taking the top spot, it's clear that very few countries outdo Israel regarding the cost of living.

Wages in Israel tend to be low despite the government offering numerous incentives and salary subsidies to new immigrants following the process of aliyah (the right of return). Additionally, many expats feel that taxes in Israel are exorbitantly high, with both import and excise taxes leaving buyers bearing the brunt of costs. 

Cost of accommodation in Israel

The cost of accommodation in Israel varies depending on location but is certain to be an expat's largest expense.

As in many bustling urban centres worldwide, in cities like Tel Aviv, the demand for housing often outpaces the available supply. The lack of an adequate transport system also means that people want to live close to the city centre and to work. Expats who live in Tel Aviv's centre will pay dearly for their accommodation.

That said, for the wallet-weary, house-sharing is still a popular option and a great way to save money for those who don't mind living with someone else. 

Cost of transport in Israel

Maintaining a car in Israel is highly expensive. The Israeli government does offer benefits to new expats who decide to buy a car, but there are stipulations relating to the number of years the car must be owned and the number of people who can drive it. Petrol is becoming prohibitively expensive, and Israel has some of the highest taxes on buying vehicles. 

Most locals and expats use public transport to get around in Israel, primarily consisting of trains and buses. Fares vary depending on distance and the route travelled. Individual inter-city taxis can be expensive but can be a good option for getting around in a large group. 

Cost of groceries in Israel

Groceries in Israel are costly and are among the most expensive in the world. Items like fruit, milk, bread, cheese and nappies are among the costliest. Expats can reduce their costs by purchasing in bulk and buying seasonal produce. Visiting one of Israel's many markets is also a sure-fire way to get fresh produce at low prices.

Some of the most affordable supermarkets in Israel include Rami Levy and Victory. Expats with a few bucks to spend can visit Shufersal or Mega for speciality goods at a premium. 

Cost of entertainment and eating out in Israel

The cost of food in Israel is reasonable if eating in but expensive if dining out. Thankfully, Israeli shopping culture supports haggling, so bargains can be found at markets. Evening entertainment, including going out for dinner or indulging in some after-work drinks, can be costly. Tickets for the cinema, music concerts or other entertainment avenues are similarly pricey. 

Cost of education in Israel

While Israel offers free primary and secondary education for all children, most expat parents enrol their children in international schools. This is because the language of instruction in Israel's schools is Hebrew, which may be difficult for older expat children. Those with young children who are planning to stay in Israel long-term should consider enrolling their children in public schools, as they are likely to learn the language faster. 

International schools are a great alternative for non-Hebrew-speaking children since they offer programmes in languages such as English, French and German. The cost of international schools is fairly high, but these institutions tend to offer globally recognised curricula and a wide range of extracurricular activities, which make them worth the cost. Parents moving with children are encouraged to negotiate an education allowance as part of their relocation contract to help offset some of the costs. 

Cost of healthcare in Israel

Expats who are earning a salary and have residency in Israel will have access to high-quality healthcare in the country. Those working in the country pay a health insurance tax to contribute to the public healthcare system, which covers all basic treatments. It's recommended that expats secure additional private health insurance to cover elective surgeries and other procedures not covered by the system. The cost of health insurance will vary based on individual lifestyle habits, age and coverage level. Generally, the more comprehensive a policy is, the pricier it will be.

Cost of living chart for Israel

Prices may vary depending on product and service provider. The list below shows average prices for Tel Aviv in September 2023.