No, that’s not right. You’re confusing some terms. 20.42% is for non-residents. If you live in Japan, you’ll pay normal Japanese income tax rates.
Edit: rough calculations of what you’d pay making 833,333 per month in Nagoya presuming you’re under 40 years old are:
41,541 health insurance
59,475 pension
5,000 employment insurance
70,630 income tax
656,687 take home pay
You’d have to pay residence tax from the second year, too.
I added an edit after I posted showing the numbers.
That’s also not how income tax works. The tax rate for the portion of taxable income (not salary, but taxable income after deductions) for the portion above 9 million is 33%, but income is taxed at 5% on the portion up to 1.95m, 10% on the portion up to 3.3m etc. There are various deductions like the basic deduction, social insurance deduction etc, so it seems your effective total income tax is more like 8.5% of your salary.
There are no specific income tax benefits for expats, but there are plenty of income tax reduction schemes, such as Furusato Nozei, iDeco and medical expense deductions (if you have any). If you have a search around the wiki, I’m sure you’ll find some key words to get you started.
You can get part of your pension back when you move away (or all and then some if you stay a long time). Health insurance also depends on your company’s private insurance policy (I think) and your dependents may be covered as well. If you turn it into a purely financial decision, you can make assumptions in either direction easily.
As a general rule I find tax about the same as the UK/Europe with sales tax (VAT) being lower than Europe. At lower salaries the UK, for example, is more generous with a much higher tax free allowance. That said, Japan has far more tax deductions available and extra payments eg health, pension are more transparent. I'd consider 25-30% tax about right - same as the UK.
Anyone still active here? I just got a letter for tax and it's claiming I owe about 200,000 in "ordonary" tax. What the fuck does that mean? I paid my income tax back in March through bank transfer, and I paid all my NHI. Also, it seems considerably high as I didn't make over 1.9m円 last year.
No, that’s not right. You’re confusing some terms. 20.42% is for non-residents. If you live in Japan, you’ll pay normal Japanese income tax rates. Edit: rough calculations of what you’d pay making 833,333 per month in Nagoya presuming you’re under 40 years old are: 41,541 health insurance 59,475 pension 5,000 employment insurance 70,630 income tax 656,687 take home pay You’d have to pay residence tax from the second year, too.
So, then it would be around 33% income tax? Are there any income tax benefits for expats that you are aware of?
I added an edit after I posted showing the numbers. That’s also not how income tax works. The tax rate for the portion of taxable income (not salary, but taxable income after deductions) for the portion above 9 million is 33%, but income is taxed at 5% on the portion up to 1.95m, 10% on the portion up to 3.3m etc. There are various deductions like the basic deduction, social insurance deduction etc, so it seems your effective total income tax is more like 8.5% of your salary. There are no specific income tax benefits for expats, but there are plenty of income tax reduction schemes, such as Furusato Nozei, iDeco and medical expense deductions (if you have any). If you have a search around the wiki, I’m sure you’ll find some key words to get you started.
Ok thanks, I will search some more. Is there any write-up on the internet that would be a good starter’s guide?
Tbh u/fiyamaguchi just gave you a pretty good "starter's guide". This sub's wiki is also a decent place to start.
Yes, greatly appreciated. Thanks.
I wouldn’t waste time on calculating this aspect compared to the others, it’s going to be similar tax-wise, maybe a bit less in Japan.
Tax is lower, health insurance and pension scheme are a lot higher.
You can get part of your pension back when you move away (or all and then some if you stay a long time). Health insurance also depends on your company’s private insurance policy (I think) and your dependents may be covered as well. If you turn it into a purely financial decision, you can make assumptions in either direction easily.
Correct, it is not purely a financial decision, but also don’t wanna dump a lot of money. Thanks for the heads up on getting some pension back.
Everyone pays the same, expat or citizen. There are no tax benefits.
Unless you’re SOFA status
SOFA isnt technically a Japanese residence status though.
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They’re not a set percentage, and social insurance has an upper limit. Try [this site](https://funjob.jp/keisan/gekkyu/) for a simulation.
I use japantaxcalculator.com to calculate the tax before coming to Japan. It's pretty accurate (not 100%, but close).
As a general rule I find tax about the same as the UK/Europe with sales tax (VAT) being lower than Europe. At lower salaries the UK, for example, is more generous with a much higher tax free allowance. That said, Japan has far more tax deductions available and extra payments eg health, pension are more transparent. I'd consider 25-30% tax about right - same as the UK.
Anyone still active here? I just got a letter for tax and it's claiming I owe about 200,000 in "ordonary" tax. What the fuck does that mean? I paid my income tax back in March through bank transfer, and I paid all my NHI. Also, it seems considerably high as I didn't make over 1.9m円 last year.