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As of January 1st 2019, Israel is taking yet another step in fighting money laundering. As a result, we are moving closer to becoming a cashless society.

What is the law?

“The Law for Limiting the Use of Cash 2018 “ will limit how much cash we can use for one purchase. The law is slightly different for personal and business transactions:

  1. If you’re self-employed or a business owner, you cannot pay more than 11,000 NIS of cash for any purchase, or more than 10% of a deal. For example, if you sell a product for 150,000 NIS, you can only accept payment of 11,000 NIS of it in cash. Likewise, if you purchase a 150,000 product, you can only pay cash for 11,000 NIS of it. However, if you purchase a product for 1,000 NIS you can pay the full price in cash.
  2. If you’re not self-employed, you cannot pay or receive more than 50,000 NIS in cash.

Click here to read the text of the law in Hebrew.

Here’s the Tax Authority’s video about the new law:

Why the change?

The purpose of the new law is to cut down on illegal cash deals. According to a Globes article I read, there is an estimated 350 billion NIS of unreported laundered money in Israel, some of which is crime and terror-related.

What are the exceptions to this rule?

Donations, loans, gifts and deals between family members do not fall within this law. Government offices are also not subject to this law.

Tourists can give or receive cash payments up to 55,000 NIS.

What about open checks?

Open checks are limited as well. An open check is a check which does not have a name on it and two crossed lines, so that it can be passed from person to person . All checks must have the two lines crossed with the exception of checks amongst private people whom can give and receive under 5,000₪.

Additionally, the bank is not allowed  to cash a check for over 10,000 NIS without a name on it or if it has been passed along more than once (or twice if one of the entities was a financial institution).

(For more details on how to write checks and avoid open checks, see Smarter Israeli Banking, available at

How will the law be enforced?

  • Any cash deposit into an Israeli bank account above 50,000 NIS will be reported by the bank to the anti-money laundering authority.
  • The law requires business owners to report how they received money, whether by cash,bank transfer or credit card.
  • Anyone who buys property will be required to show where the money came from, regardless of what form they pay in – cash, bank transfer, etc .

What if I broke the law?

Please don’t! This is a serious crime and it is crucial that all your money is “kosher.” The fines will be between 15%-30% of what you illegally spend in cash, so breaking the law is NOT a financially smarter move.

Can I still use cash at the supermarket?

YES, you can, and if that helps you budget better, you should.

This law is not meant to eliminate the spending of small sums, rather to fight the use of larger sums of cash, which might have come from money laundering.

Can I still write out open checks of 150 NIS for my child’s extra-curricular activities?

My understanding is that you can, as it is under 5,000 NIS. However, this is not recommended. If you are writing out a check write in who the check is to and make sure it has the two diagonal lines so it can’t be transferred. Alternatively, I recommend paying by bank transfer whenever possible. It is much easier than checks and is trackable.   

Does this really change anything for me?

The average person most likely gets paid via check or bank transfer. In my business, I ask everyone to pay me via bank transfer, rather than having to deal with cash. I imagine that most people who purchase large items move their money from their account via bank transfer or check, which means there should be no need for huge payments in cash.

Second-hand car deals were often done in cash in the past, because of the security of knowing the car has been paid for before handing over the keys. However, an immediate “zahav/gold” bank transfer can accomplish the same goal. In fact, there are solutions for any legal transaction, so this new law should not affect most of us.

Rifka Lebowitz

Financial consultant, author, public speaker, and founder of a 35,000 member Facebook group called Living Financially Smarter in Israel. I’m passionate about helping English speakers understand their finances, feel comfortable with their money, and succeed financially – in Israel.