What is the Japan Income Tax?
Japan taxes salary through three layers: national income tax at 5–45%, residence tax at a flat 10% paid to your local municipality, and social insurance of roughly 15% covering health, pension and employment insurance.
A generous employment income deduction reduces taxable salary before any of this — its minimum guarantee was raised from ¥550,000 to ¥650,000 by the 2025 tax reform, which also raised the basic deduction above ¥480,000 — and a 2.1% special reconstruction surtax applies on top of national tax.
Formula & worked example
National tax (5–45%) × 1.021 + residence tax (10%)
Worked example: a ¥6,000,000 salary gets a ¥1,640,000 employment deduction and pays about ¥905,400 in social insurance. National tax works out near ¥183,700 and residence tax around ¥307,500, leaving net annual pay of roughly ¥4,603,000 — about ¥383,600 a month.
How to use this japan income tax calculator
- Enter your gross annual salary in yen.
- Add dependants, which increase deductions for both taxes.
- Social insurance is estimated at about 15.1% — actual rates vary slightly by prefecture.
- Note that residence tax is charged a year in arrears.
Smart tips
- Residence tax is billed in the year after the income is earned — leaving Japan mid-career triggers a bill for the previous year.
- Furusato nozei ("hometown tax") lets you redirect residence tax to a chosen municipality and receive gifts, at a cost of only ¥2,000.
- iDeCo and NISA are the main tax-advantaged investment routes; NISA growth is entirely tax-free.
- The employment income deduction is generous at lower salaries but caps out at ¥1,950,000.
- Year-end adjustment (nenmatsu chosei) through your employer handles most filings; a return is needed for side income.
Frequently asked questions
What are Japanese income tax rates?
National income tax runs from 5% to 45% across seven brackets, plus a flat 10% residence tax and a 2.1% reconstruction surtax.
What is residence tax?
A flat 10% local tax based on the previous year's income, billed from June and paid to your municipality.
How much is social insurance in Japan?
Roughly 15% of salary for employees covering health insurance, pension and employment insurance, with employers matching.
What is furusato nozei?
A scheme letting you donate part of your residence tax to a chosen municipality in exchange for local gifts, costing only ¥2,000 net.
Want the theory behind the numbers? Browse the Money Blog for worked guides.
Written by Gurjeet Singh, Sharpen Solutions. Last reviewed 15 Oct 2026. Sources: 国税庁 (NTA) — 所得税の税率 (income tax rate table), 国税庁 (NTA) — 令和7年度税制改正: basic and employment-income deductions. How we check these numbers.