Last Updated 8 months ago

Throughout 2025, I spoke with hundreds of people making Aliyah who kept their U.S. jobs and continued working remotely. In nearly every conversation, the same assumption came up. 

Keeping a U.S. salary felt like the safest financial decision available. The U.S. pay seemed higher than what they could find in Israel, the paycheck was predictable, and the numbers appeared to work when the move was planned. A dollar income was widely viewed as an anchor during a major life transition.

What many people did not expect was that nothing about the paycheck itself would change, yet life in Israel would suddenly feel more expensive every single month. Not because of a new tax, not because of a cut in hours, and not because of a lifestyle upgrade. Most businesses in the U.S. don’t even realize how much the U.S. dollar has dropped in value. Living in Israel and getting paid in USD, you absolutely do! 

Over the past year, the U.S. dollar lost a meaningful amount of its value against the shekel. For Olim paid in dollars and spending in shekels, that shift has been one of the most underappreciated financial pressures of the Aliyah experience. 

The impact is not theoretical. It shows up in rent renewals (especially with rent going up in major cities), grocery runs, tuition payments, and the uncomfortable feeling that the budget no longer works the way it used to.

Key Points

• The U.S. dollar declined meaningfully against the shekel over the past year, temporarily reducing take-home income in Israel even though salaries remained unchanged.

• Olim paid in dollars have felt pressure from both currency movement and rising local costs, highlighting the importance of short-term financial flexibility.

• Currency exposure is now clearly understood as a planning variable for families relying on remote U.S. employment, rather than a permanent obstacle.

Olim Most Affected by the Dollar Decline

Many made Aliyah within the past 12 to 18 months, often from high-cost areas in the United States. They kept their U.S. jobs or businesses and continued working remotely. Their compensation is paid in dollars, deposited into a U.S. bank account, and converted into shekels as needed to fund life in Israel.

For this group, the initial math often looked reassuring. A strong dollar made Israeli expenses feel manageable. That large rent cost was a reasonable luxury. Day-to-day costs could be absorbed. The financial model worked, at least on paper.

That sense of stability depended heavily on one assumption that most people never explicitly planned for. The dollar would remain relatively stable against the shekel. Exchange rate fluctuations are rarely modelled in Aliyah planning.

What Actually Happened to the Dollar

At the beginning of February 2025, the exchange rate sat around ₪3.55 to $1. By early February 2026, that same dollar was worth closer to ₪3.10. The change did not happen overnight, but the cumulative effect has been significant.

A drop of roughly 12% in exchange rate value may not sound dramatic in isolation. In real-life terms, it is the difference between a budget that works and one that quietly falls apart.

A monthly salary of $10,000 converted to roughly ₪35,500 a year ago. Today, that same paycheck converts to closer to ₪31,000. The employee did not lose their job. They did not negotiate a lower salary. They simply received fewer shekels for the same work.

This is not a paper loss. It is a reduction in usable income in Israel.

Why This Feels Worse Than the Numbers Suggest

Currency moves rarely happen in a vacuum. The pain of the weaker dollar has been amplified by events in Israel at the same time. While the dollar was losing value, the cost of living in Israel continued to rise. Inflation moderated compared to prior spikes, but prices still moved upward.

A good example is from a client and friend, Adam. Adam made Aliyah with his wife and 3 children in December 2024. Forget about how his kids adjusted to schools in the middle of the year for a minute.

Adam kept his U.S. job and earned $180,000 per year, paid entirely in dollars. He rented a 4-bedroom apartment in Ramat Beit Shemesh for ₪8,000 per month upon arrival. At the exchange rate at the start of 2025, that rent equaled roughly $2,250 per month, about 15% of his gross income.

Fast forward to early 2026. Adam’s dollar salary is exactly the same. What changed is everything around it. The rent on that same apartment is now ₪10,000 per month. At the weaker exchange rate, that rent translates to roughly $3,225 per month. Without changing apartments, neighborhoods, or lifestyle, Adam is now spending closer to 22% of his gross income on rent alone.

At the same time, his monthly dollar income converts into thousands fewer shekels than it did a year earlier. In early 2025, his $15,000 monthly salary converted to roughly ₪53,000. In early 2026, that same paycheck converts to closer to ₪46,500. The gap is not theoretical.

Now, many won’t cry tears for Adam.  That salary is still significantly higher than that of many people in similar positions at Israeli companies.  That drop in monthly earnings, though, can have a big impact on his family situation.

The Illusion of a Safe Dollar Salary

For years, a U.S. dollar salary has been viewed as a gold standard of stability. Strong currency, global demand, and predictable pay cycles created a sense of safety.

Aliyah adds a new layer to that equation. The moment expenses move to shekels, the dollar becomes a variable rather than a constant. That shift can feel uncomfortable at first, but it is not a sign that something went wrong.

History shows that the relationship between the dollar and the shekel is constantly in motion. At different points over the years, the rate has moved closer to₪3  per dollar and at other times climbed toward ₪5. Periods of weakness are part of that cycle, not the end of it.

Perspective From the Long View

Looking at the current moment in isolation can make it feel permanent. It is not. Currency cycles tend to correct over time, and what feels like a low point today often looks very different a year or two later.

For families who made Aliyah recently, it is worth remembering why they made the move in the first place. Being here matters. Building a life in Israel matters. The currency environment may feel tight right now, but history suggests that it will not always feel this way.

Periods like this force a more disciplined approach to budgeting, but they also reward patience. Families who can ride out currency pressure without making panic-driven decisions are often in a stronger position when conditions improve.

The goal is not to time the market. It is to recognize that exchange rates move in cycles and to avoid treating today’s rate as a permanent reality.

Guidance for Those Planning Aliyah

For people considering Aliyah while keeping a remote U.S. job, the lesson from the past year is clear. Exchange rates are a real factor and deserve a place in the planning conversation.

When the dollar is strong, make sure to save more. Building plans that account for some degree of fluctuation leads to fewer surprises and greater confidence after the move.

Secondly, figure out the right structure.  If you are working on that U.S. payroll, you could be throwing away thousands each month in double social security taxes. There are ways to minimize your U.S. and Israeli taxes with proper structuring.  Many have an even bigger impact than the currency fluctuations. 

When the dollar is weak, every shekel matters more. This is exactly when tax planning has the biggest impact, not through aggressive strategies, but through thoughtful structuring, timing, and awareness of the rules that apply after Aliyah.

If you are making Aliyah or already live here and want to better structure your tax situation, get in touch with us.  We’ve helped hundreds live their dreams in Israel while simplifying their taxes.