Selling on Etsy from Israel (2026): Payments, Fees and Tax Basics

Last verified 2026-10-23 · Selling from Israel · Published with AI assistance, sourced from official pages (how we work)

Short answer: yes, Israel is on Etsy's list of countries where Etsy Payments is available, so an Israeli resident can open a shop and be paid into an Israeli bank account. There are a few Israel-specific details worth knowing before you start.

What Etsy supports for Israeli sellers

• Etsy Payments is available in Israel. Etsy lists Israel among the countries where sellers can use Etsy Payments directly (no Payoneer needed). You must be at least 18 and be approved for a payment account.
• Payment processing fee: 4.5% + 2 ILS per order, on the total sale price including shipping and tax. This is on top of Etsy's 6.5% transaction fee and the US$0.20 listing fee. See a worked example.
• Deposit fee for small payouts: Etsy lists a minimum deposit of 7 ILS and a 7 ILS deposit fee for deposits below 350 ILS.
• PayPal is not available to Etsy sellers located in Israel who are enrolled in Etsy Payments. Etsy says PayPal is removed from your shop after you sign up for Etsy Payments. Buyers can still pay with cards, Apple Pay, Google Pay and Etsy gift cards or credits.

Tax: what to know (this is not tax advice)

We are not accountants. The points below come from Israeli tax-authority and accounting-firm pages; confirm your own situation with a licensed accountant (רואה חשבון).

• Etsy sales are business income. In Israel, a small self-employed person typically registers as an osek patur (exempt dealer) or osek murshe (licensed dealer). The Israel Tax Authority offers an online service to open an osek patur file, and it asks for ID and a bank account confirmation, among other items.
• The 2026 osek patur turnover ceiling is ₪122,833 per year, up from ₪120,000 in 2025. It is measured on gross turnover (income), not profit, across all your businesses together. The separate "small business" (osek zaIr) income-tax track still shows a ₪120,000 ceiling, per MSL. If your turnover goes above the ceiling you must move to osek murshe and start charging VAT; the amount is updated each 1 January.
• Some professions must register as osek murshe regardless of turnover; the list is in the Tax Authority's regulations.
• Etsy states that processing fees are subject to VAT where VAT collection is required. Whether that applies to you is a question for your accountant.

Because turnover is gross, a growing shop can approach the ceiling faster than its profit suggests: the figure includes shipping charged and is counted before Etsy fees, supplier costs and print-on-demand costs.

Practical checklist for an Israeli seller

1. Decide your tax registration first (accountant or the Tax Authority's online service).
2. Open the Etsy shop with the same legal name as your bank account.
3. Set your shop currency deliberately. Listing in a currency different from your payment account's currency triggers Etsy's currency-conversion rules; read the "Currency Conversion" section of Etsy's fees policy.
4. Keep every payout statement and Etsy invoice for your accountant.
5. If you use print-on-demand, remember suppliers bill in USD, EUR, CAD, GBP or AUD cards (see Printify vs Printful), so keep a card that handles foreign currency.
6. Learn Etsy's rules on AI-generated items and production-partner disclosure before listing.

Selling something digital outside Etsy? See selling digital products from Israel.