Shekel interest is calculated on the nominal amount without linkage, and its rate includes compensation for inflation. Linked interest is calculated on the amount revalued by the index, so its rate is lower, and linkage differentials are added on top.
Interest and linkage calculator under the Adjudication of Interest and Linkage Law
The calculator applies the Adjudication of Interest and Linkage Law as in force from 1 January 2025 (Amendment No. 9), the law that applied until then and the transitional provisions: shekel interest, linkage differentials, or linked interest and linkage differentials, as awarded, and default interest or arrears charges from the due date. You can enter several amounts, each with its own start date and due date.
Interest and linkage calculatorUnder the Adjudication of Interest and Linkage Law, including the law before Amendment No. 9 and the transitional provisions
Disclaimer. The calculator provides an estimate only, based on the data entered and the assumptions set out here. It does not constitute legal advice, an opinion or an undertaking as to any outcome, and should not be relied upon without review by an advocate. The binding text is that of the Law, the Regulations and the judgment, and the actual calculation may differ according to the circumstances of the case. The office accepts no liability for any damage arising from use of the calculator or from reliance on its results.
What changed in the Adjudication of Interest and Linkage Law in 2025?
Amendment No. 9 to the Law, which came into force on 1 January 2025, replaced the "linkage differentials and interest" and the default interest of the former law with three components: shekel interest, linked interest and arrears charges. The rates are set every quarter under regulations made in 2024, and are published by the Accountant General, Ministry of Finance.
Interest awarded without its type being specified is shekel interest (section 2(d)). Linkage differentials only, or linked interest and linkage differentials, are awarded where there is reason to justify it (section 2(a)).
How is interest calculated from day to day?
Under section 4A, interest is added to the updated principal every day: the principal multiplied by the annual rate divided by 365. The total daily interest is added to the principal every 12 months from the start of accrual, and on the due date. Linkage differentials are added to linked interest that has not yet been added to the principal. Each new rate applies from the date of the change (section 5C(c)).
What happens when payment is not made on time?
From the date set for payment until actual payment, shekel interest is added, plus arrears charges. Arrears charges are added at the end of every three full months, at the annual rate divided by 4, on the updated principal as at the last capitalisation, and they are not added to the principal (sections 5 and 5A). No arrears charges are added for a period of less than three months.
How is a debt from before 2025 calculated?
Under the transitional provisions (section 117 of the amending law), where the decision was given or the obligation arose before 1 January 2025, the period up to 31 December 2024 is calculated under the former law. Under the former law, the interest, or the linkage differentials and interest, are added to the principal once a year (section 7), and an amount awarded that was not paid on time carries linkage differentials and default interest: the linked interest plus 6.5 percentage points. On 1 January 2025 the accrued interest is added to the principal, and the new law applies from then on. If the due date fell before 1 January 2025, the three months for arrears charges are counted from 1 January 2025.
A decision given on or after 1 January 2025, even in a proceeding conducted before then, is calculated entirely under the new law. That is why the calculator asks for the date of the decision or the date the obligation arose.
Where do the rates and the index come from?
All the rates, from 1 April 2003 to the current quarter, are the official rates published by the Accountant General's Department, Ministry of Finance, and the rate for the current quarter is also verified against the official database at data.gov.il. The Consumer Price Index is drawn from the Central Bureau of Statistics API, according to the publication date set by the CBS: on the 15th of the month, or on the preceding working day when the 15th falls on a Saturday or a holiday.
When checking a calculation submitted by the other party, or a payment demand under a judgment, it is advisable to work from the full details: which amounts, from which date, and what type of interest was awarded. For questions about civil proceedings, see Civil litigation.
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Questions and answers
What is the difference between shekel interest and linked interest?
What applies when the judgment does not specify which interest?
Under section 2(d) of the Law, interest awarded without its type being specified is regarded as shekel interest.
Does interest bear interest?
Yes, once a year. Interest accrues daily and is added to the principal every 12 months and on the due date, and from then on it bears interest. Arrears charges are not added to the principal.
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