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Cost of living

According to the 2012 Mercer cost of living survey, Tel Aviv was the most expensive city in the Middle East, and the 24th most expensive city in the world in which to live. Real estate prices are high, especially in the larger cities such as Tel Aviv but food, clothes and groceries are fairly reasonable.

The cost of living in Israel is gradually on the rise due to a result of a fall in the value of the Israel shekel against other major currencies such as the US Dollar.

As of November 2013, the average wage in the USA is approx. 13,000 shekels per month, and closer to 17,000 per month in larger cities (according to the federal government’s website); in the UK it is approx.15,000 shekels per month, and in France, approx. 16,000 shekels per month. 

In Israel,according to the Dept. of Statistics, the average wage was 8,235 shekels per month (approx. US $2,200).

So, how much does it cost to live in Israel?  Below you will find some guidelines of average living expenses in Israel.

Arnona  (municipal rates and taxes) on 100 sqm

Invoices sent out every 2 months and the charge varies dependant upon where you live.  
Can range from 500 - 2000 shekels.

Building Committee & Maintenance

Invoiced every month.  This covers electricity (for the entrance and stairwells), water (garden and washing floors - entrance and stairwells), cleaning fees and general building maintenance.  

Education

Education is one area in which Israelis pay considerably less than Americans.
Tuition at Israel’s renowned public universities is about $2,714 per year, thanks in large part to government subsidies. At Israel’s lesser-known private colleges, tuition costs about $8,571 each year. Compared with other developed countries, Israel ranks eighth out of the OECD’s 26 countries for tuition rates.
Public schools — whether secular, Modern Orthodox or haredi Orthodox — are free. However, parents must pay service fees for field trips and special events, are responsible for busing costs and must pay for books.
The growing number of semi-private schools that offer special pluralistic, democratic or religious curricula charge annual tuitions ranging from $800 to $1,600, and boarding schools charge $3,000 to $5,000 per year.
Because the traditional Israeli primary school day is short, often ending before 2 p.m., many parents pay money for afternoon childcare programs or after school activities.
The most expensive part of child rearing may be day care for the under-3 set. Some day care centers cost $630 a month for private toddler day care. Once children turn 3, they can take advantage of the public school system and day care centers that charge as little as $257 a month for a six-day, six-hour program.

Electricity

Invoices sent out every 2 months.  Most Israeli homes have gas cookers rather than electric ones. Many families use toaster ovens instead of regular ovens for quick cooking.
Average cost ranges from 300 - 1500 shekels.

Gas: Cooking & Heating

A small gas balloon costs approx. 150 shekels and generally lasts for a little over 2 months when used for cooking purposes only.  If you use gas to heat your home in the winter, your bill will be considerably higher. Ceramic stoves (glass tops) are now quite popular in Israel.
Average cost is 75 - 150 shekels per month 

Groceries

At the supermarket: 500-1000 shekels per month (per person)

At the shuk (fresh produce market): 250-400 shekels per month (per person)
Note - Shopping at the markets is considerably cheaper on Friday afternoons (within a couple of hours of closing time).
An 8-ounce container of cottage cheese costs $1.68; a pound of hummus costs $4.54; 2 liters of orange juice — in a country that exports oranges — costs $6.54; 2 pounds of rice costs $1.94; A 6-ounce can of Israeli-made sunscreen spray can cost approximately $40.

Health care

Israel’s socialized health care system is considered among the world’s best, and taxes pay the lion’s share of costs. Based on figures from the National Insurance Institute, the health care costs deducted from the average paycheck are between 3 percent and 5.5 percent.
With a system of universal health care run by private corporations, all citizens are entitled to the same uniform package. Whether self-employed or employed by a company, every citizen pays a basic health insurance rate to one of the four HMOs, which are heavily regulated by the government and subsidized.
Many choose to expand their coverage with private health insurance that offers more access to private care or more comprehensive coverage. Private insurance costs a fraction of what it costs in the States.

Municipal Water Bill

Invoices sent out every 2 months.  Each family member is entitled to 2.5 cu per month.  A family of 4 is therefore entitled to 10 cu of water per month.  Water consumption above this, is charged at a much higher rate. 
Average cost is 100 - 400 Shekels per month

Running a Car

Insurance: 3rd party and comprehensive on an average family vehicle: 300 - 400  per month
Gas/petrol price in Israel; Please note that the gas/petrol price in Israel is reviewed on a monthly basis.  Sometimes there is a price increase and sometimes there is a decrease. 

Salaries

In Israel, the average salary is about $2,572 per month, and the average income for a family with two wage earners is approximately $3,428 per month, according to Israel’s Central Bureau of Statistics.

Taxes

Israel is more like Europe than America on taxes. The top rate of income tax is 45 percent (it was 50 percent until 2003). The value added tax, or VAT, which amounts to a sales tax, is 18 percent.

Transportation

The tax rate is 78 percent on new cars.  There is a a lack of competition in the import market and there are high car insurance costs and high fuel costs - this means that owning a car can be one of the most expensive things for residents in Israel.
A Honda Civic, which has a retail price of approx. $16,000 in the United States, costs $33,000 in Israel. 

In November 2013, 95 unleaded fuel costs NIS 7.29 for a liter of self-service petrol, less than in Germany (NIS 7.46), Italy (NIS 8.17) and the United Kingdom (NIS 7.38), (source: www.fuel-prices-europe.info)
The alternative — public transportation — is cheap by comparison in Israel, though the network of mass transit is much less developed here than in America or Europe.

TV, Phone & Internet Package

Cable TV basic package, internet and telephone.  Special channels not included in the basic package and can cost anywhere from 15 shekels to 50 shekels per month per channel.

In general, compared to the United States and Europe, Israeli costs of living are a mixed bag. Salaries are lower, but so are health care costs. Consumer goods and services costs are nearly double those in the United States, and owning a car can run about six times as much relative to one’s salary.

So how do Israelis make it? Israeli retailers and banks offer easy credit on everything from big-ticket items like summer vacations to everyday purchases like groceries; all can be paid in monthly installments. The result is that many Israelis are perennially in debt and are increasingly frustrated by their inability to cover costs with their monthly paychecks.