Cash Law: Up to NIS 6,000 in a Transaction with a Business and NIS 15,000 Between Private Individuals

Under the Cash Law, in a transaction where one of the parties is a licensed business (osek), cash payments or receipts are limited to NIS 6,000. When the transaction price is higher, only 10% of the transaction price or NIS 6,000 may be paid in cash, whichever is lower. In a transaction between two private individuals, the ceiling is NIS 15,000, subject to the same 10% rule.

The ceilings are set forth in the Restriction of the Use of Cash Law, 5778-2018, which has been in effect since January 1, 2019. The thresholds were reduced by ministerial order and took effect on August 1, 2022. Until then, the ceiling for a transaction with a business was NIS 11,000, and between private individuals NIS 50,000. The Israel Tax Authority enforces the law through financial sanctions on businesses and administrative fines on private individuals.

The law distinguishes between types of payments. The following ceilings have been in effect since August 2022:

• A transaction, loan, or donation by a business in the course of its operations: up to NIS 6,000, and above that amount, 10% or NIS 6,000, whichever is lower.

• A private individual purchasing from a business pays cash subject to the same NIS 6,000 ceiling.

• Between two private individuals: up to NIS 15,000, and above that amount, 10% or NIS 15,000. For the purchase of a vehicle by a private individual, the ceiling remains NIS 50,000.

• Wages of up to NIS 6,000 may be paid in cash. Higher wages may not be paid in cash at all — not even partially.

• Gifts: up to NIS 15,000.

• A business selling to a tourist: up to NIS 40,000.

The Tax Authority's example: in a NIS 30,000 transaction with a business, only NIS 3,000 may be paid in cash, because 10% of the price is less than NIS 6,000. A person who paid NIS 20,000 in cash exceeded the limit by NIS 17,000.

It is prohibited to split a transaction, wages, a loan, or a gift into multiple payments in order to stay below the ceiling. Such splitting constitutes fraud under the law, punishable by up to 3 years of imprisonment. The restrictions do not apply between family members, except for the payment of wages.

A business may issue or receive a check, in any amount, only if the payee's name is written on it. An "open" check is prohibited for businesses. A private individual is subject to this requirement for checks exceeding NIS 5,000.

On an endorsed check, the endorser's name and ID number and the endorsee's name must be written on the back. A check exceeding NIS 10,000 may not be endorsed more than once, except in cases specified by law, such as transfer to a bank for collection.

From April 1, 2026, Section 2(g1) of the law applies: anyone who exchanges a check or other negotiable instrument for cash, including by way of discounting, cashing, or conversion, may receive in cash — when the instrument exceeds NIS 6,000 — only 10% of the instrument's amount or NIS 6,000, whichever is lower. This restriction also applies to a regulated financial institution. A business may receive cash from a regulated financial institution in exchange for an instrument of up to NIS 25,000, provided it presents an invoice bearing an allocation number and a receipt for the transaction in respect of which the instrument was received (Income Tax Circular 06/2026).

A business that received or paid cash above the ceiling, used a check in violation of the law, or failed to document the means of payment is subject to a financial sanction under Section 6 of the law. The sanction is calculated as a percentage of the violation amount:

• 15% when the violation amount is up to NIS 25,000.

• 20% when it exceeds NIS 25,000 and is up to NIS 50,000.

• 30% when it exceeds NIS 50,000.

In the example above, a NIS 17,000 excess results in a sanction of NIS 2,550. A private individual is subject to an administrative fine of 10%, 15%, or 25% at the same tiers. A repeat violation of the same provision within two years of a previously penalized violation carries an additional penalty.

Before imposing a sanction, the Tax Authority issues a notice of intent, and the recipient may submit a letter of claims (Form 9100) contesting both the violation and the amount. Imposed sanctions are published on the Tax Authority's website. For more on this process, see Compounding and Administrative Fine Proceedings.

1. Every receipt or tax invoice-receipt details the means of payment: the cash amount, and for checks — the check number, bank, and account.

2. Wages exceeding NIS 6,000 are paid by bank transfer or check.

3. Outgoing checks are made payable to the named payee, and an endorsed check is accepted only with the endorser's name and ID number.

4. A large transaction paid in multiple cash installments is reviewed against the prohibition on splitting.

5. Before an unusual transaction, the permissible cash amount can be calculated using the Cash Law simulator on the Tax Authority's website.

Sanction and administrative fine proceedings are handled at the firm by Adv. and CPA Shlomi Vaknin.