Resident Tax in Japan
Understand resident tax timing, payroll withholding, payment slips, job changes, moving, and leaving Japan.
Resident tax is local tax based on the previous year’s income. Income from January to December is assessed, and payment usually runs from June of the next year to May of the following year. Many new arrivals pay little in year 1, then see monthly deductions begin in year 2.
Basic calculation
The income-based part is usually about 10%, made of prefectural and municipal components, plus a per-capita amount of around JPY 4,000 to 5,000 per year. Actual rates can vary slightly by municipality.
The rough formula is previous year’s income minus deductions, multiplied by about 10%, plus the per-capita amount. Deductions include basic deduction, employment income deduction, social insurance premiums, spouse deduction, dependent deduction, and life insurance deductions.
Special and ordinary collection
Company employees usually pay through special collection, meaning the employer withholds resident tax from salary over 12 months from June to May. The item appears on the payslip as resident tax.
Self-employed people, freelancers, and some people after resignation pay by ordinary collection. The municipality sends payment slips, often split into 4 installments around June, August, October, and January. Bank transfer can prevent missed MIC local-tax deadlines.
Resignation and job changes
If you resign from June to December, remaining resident tax often switches to ordinary collection. If you resign from January to May, the remaining amount for that tax year may be withheld from the final salary in one lump sum.
If the next employer is fixed, ask HR whether special collection can continue through the new company. Otherwise, watch for 4 municipal slips arriving at home.
Foreign residents and departure
The January 1 address matters. If you had an address in Japan on January 1, resident tax for that year can arise even if you leave Japan before bills arrive in June. A person leaving in March may still owe tax later.
Before departure, appoint an NTA-style tax agent at the municipal office or arrange full payment. Leaving without paying is still a debt and can cause trouble if you return to Japan.
Common mistakes
Budget for the second-year increase. Someone earning JPY 4,000,000 may need to reserve roughly JPY 250,000 per year for resident tax, though deductions and municipality matter.
Do not ignore ordinary-collection slips. Late payment can add arrears and, in serious cases, collection action. Freelancers should remember that income tax filing usually also creates resident-tax reporting data.
Useful terms
- Juminzei: resident tax
- Tokubetsu choshu: payroll withholding
- Futsu choshu: ordinary collection
- Nozei kanrinin: tax agent
- Shotoku kojo: income deduction