How to Calculate Income Tax in Japan

投稿者: | 2020-05-02

If you are a worker in Japan, you are required to pay national income tax in Japan.

National income tax is based on calender year, and the term of final tax return is from Feb 16th to Mar 15th after the year.

In taxation, Those who live in Japan are divided into two categories.One is non-permanent resident, the other is permanent resident.

<Non-permanent resident>
In case that he or she does not possess Japanese citizenship and the total period of stay in Japan during the past 10 years does not exceed 5 years.

Blue parts are taxed in Japan.

<Permanent resident>
Aside from Non-permanent residents, all other residents are permanent residents

Blue parts are taxed in Japan, All of incomes are taxed.

Types of income

There are ten taxable incomes.
・employment income
・business income  
・real estate income 
・Interest income 
・dividend income 
・capital gains 
・retirement income 
・timber income 
・occasional income 
・miscellaneous income

Some are aggregate income as follow.
others are separete taxation.

Employment Income

Employment income is calculated as follow.
Your saraly – Employment deduction = Employment income
<Empleyment deduction>

(A)Your annual saralyEmployment income deduction
   less than 1,800,000JPY   (A)×40%
At least 650,000JPY
From 1,800,000 but not over3,600,000(A)×30%+ 180,000JPY
From 3,600,000 but not over6,600,000(A)×20%+ 540,000JPY
From 6,600,000 but not over10,000,000(A)×10%+1,200,000JPY
   Over 10,000,0002,200,000JPY
Employment Deduction as of 2020

Income Deduction

You can deduct your income in response to your income deductions.For example, spousal deduction, deduction for dependents, etc.
Everyone can deduct as basic deduction, 380,000JPY.

Image of Income deductions

When it comes to medical expenses deduction, you can confirm the below article.

Deduction for medical expenses of income tax for the year when you enter Japan.

Tax Rate

Withholding for employment income and Year-end adjustment

In the case of employee, the estimated income tax amount is deducted from the monthly saraly by employers, and the total amount of income tax is balanced through the year-end adjustment.
That’s why, in many cases, employees don’t need to file a final tax return.

Inhabitant Tax

In addition, you are requierd to pay inhabitant tax. Inhabitant tax is taxed in response to previous year’s income by municiple where you live as of January 1st.It means, you generally don’t need to pay in the year you enterd Japan.
Tax rate is 10% and It’s almost same to income tax regarding how to calculate.

Here is basic and typical case.Please consult with tax offices or accountants in detail.

How to Calculate Income Tax in Japan」への2件のフィードバック

  1. ピンバック: When you are required to file a final tax return. – えいごのみー英語と経済同時に勉強!

  2. ピンバック: 所得税における総合課税と分離課税の違い。超過累進税率とは? – えいごのみー英語と経済同時に勉強!


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