Japan Tax Calculators

Property Tax Calculators

Consumption Tax Rebate Calculator (for Japanese property owners)

This will help you understand whether it is beneficial for you to to apply and lodge consumption tax returns.  Interesting note is that a lot of foreigner owners miss out on claiming this rebate because they feel it’s complicated. We can do this for you easily.

Individual vs Corporate tax Calculator (for Japanese property owners)

This calculator will help you assess the income tax payable on your property and help you decide whether it should be classified under your personal name or a company.  You can easily see which is the most effective tax rate.

Historical Tax and Depreciation Calculator (for Japanese property owners)

This calculator will help you estimate your Japan tax liability for properties in Japan depending on the composition of the building, when it was built and whether you own this property individually or via an offshore company.

Income Tax Calculator

Income Tax Calculator (for individuals)

This is another Japan Tax calculator that will help you understand how much Japanese National Income tax (shotokuzei 所得税) , Local tax (Also known as residents tax – juminzei 住民税), social health insurance and pension contributions you will have to pay depending on your annual salary.

How is tax calculated in Japan?

The tax rate is a progressive tax system and determined based on the taxable income. Like in other countries, taxable income is the total earnings minus a basic exemptions, exemptions for dependents and various types of deductions, such as deductions for insurance premiums, medical expenses. In the Japan the big difference is a so-called residents tax that is payable dependant on where you live.

How much is the tax in Japan?
The current income tax rates for Japan are dependant on multiple variables including your salary, benefits and length of stay in the country. The easiest way to assess each individual is to use our japan tax calculator

For tax purposes, people living in Japan are classified into three categories. This categorization is not related to visa types:

Non-Resident
A person who has lived in Japan for less than one year and does not have his primary base of living in Japan. Non-residents pay taxes only on income from sources in Japan, but not on income from abroad.
Non-Permanent Resident
A person who has lived in Japan for less than five years, but has no intention of living in Japan permanently. Non-permanent residents pay taxes on all income except on income from abroad that does not get sent to Japan.
Permanent Resident
A person who has lived in Japan for at least five years or has the intention of staying in Japan permanently. Permanent residents pay taxes on all income from Japan and abroad.

How to pay taxes?

Income tax in Japan is based on a self-assessment system (a person determines the tax amount himself or herself by filing a tax return) in combination with a withholding tax system (taxes are subtracted from salaries and wages and submitted by the employer).

Thanks to the withholding tax system, most employees in Japan do not need to file a tax return. In fact, employees only need to file a tax return if at least one of the following conditions is true:

if they leave Japan before the end of the tax year
if their employer does not withhold taxes (e.g. employer outside Japan)
if they have more than one employer
if their annual income is more than 20,000,000 yen
if they have side income of more than 200,000 yen

Employees, who do not need to file a tax return, will have their income taxes withheld from their salaries by their employer, and an eventual adjustment is made with the year’s final salary. People, who are required to file a tax return, such as self-employed persons, must do so at the local tax office (zeimusho).

When to pay taxes?

If not withheld by the employer, national income taxes are due in full by March 15 of the following year (mid April if you pay by automatic bank transfer), with two prepayments paid in July and November of the running tax year. Prepayments are calculated based on the previous year’s income, i.e. you do not pay them during your first year in Japan..

If prefectural and municipal income taxes are not withheld by the employer, they are to be paid in quarterly installments during the following year.

Japan’s progressive Tax system

Japan has a progressive income tax system, which means that the more income a person earns, the higher their tax rate will be. Let’s take a detailed look at how Japan income tax is calculated and the various deductions and exemptions that can be applied to reduce the tax liability.

The first step in calculating income tax in Japan is to determine the taxpayer’s income. Income is defined as all income received from various sources such as salary, wages, business income, rental income, and capital gains. Once the income is determined, it is then divided into two categories: earned income and unearned income. Earned income includes salary, wages, and business income, while unearned income includes rental income and capital gains.

The next step is to apply deductions and exemptions to the income. Deductions are expenses that are related to the income earned and can be used to reduce the taxable income. Examples of deductions include business expenses, medical expenses, and charitable donations. Exemptions, on the other hand, are income sources that are not taxed, such as certain types of investment income and life insurance proceeds.

After deductions and exemptions have been applied, the taxable income is then calculated. Taxable income is determined by subtracting the deductions and exemptions from the total income. The taxable income is then used to determine the tax liability.

In Japan, the tax rate is progressive, which means that the more income a person earns, the higher the tax rate will be. The tax rate ranges from 5% to 45% and is divided into several brackets. The first bracket is for income up to 1.95 million yen, which is taxed at a rate of 5%. The second bracket is for income between 1.95 million yen and 3.3 million yen, which is taxed at a rate of 10%. The third bracket is for income between 3.3 million yen and 6.95 million yen, which is taxed at a rate of 20%. The fourth bracket is for income between 6.95 million yen and 9 million yen, which is taxed at a rate of 23%. The fifth bracket is for income between 9 million yen and 18 million yen, which is taxed at a rate of 33%. Finally, the sixth bracket is for income over 18 million yen, which is taxed at a rate of 45%. If you need a easy to use calculator try our Japan Income Tax calculator

In addition to the progressive income tax, Japan also has a local inhabitant tax, which is calculated separately from the income tax. The local inhabitant tax is a flat rate tax that is based on the taxpayer’s place of residence. The tax rate ranges from 10% to 20% and is used to fund local government services such as schools and public works.

Another important aspect of Japanese income tax calculations is the tax credit system. Tax credits are used to reduce the tax liability and are based on various factors such as the number of dependents, income level, and age. For example, a taxpayer with dependents may be eligible for a tax credit of up to 380,000 yen per dependent. Additionally, taxpayers who are over 65 years old may be eligible for a tax credit of up to 1.7 million yen.

Lastly, it is important to note that Japan has a tax treaty with many countries, which means that residents of those countries may be eligible for reduced tax rates or exemptions. This is particularly beneficial for foreign residents working in Japan, as they may be able to claim a tax credit for the taxes paid in their home country.

In conclusion, income tax calculations in Japan are based on a progressive tax system and include deductions, exemptions, and tax credits to reduce the tax liability. It is important for taxpayers to understand their income and the various deductions and exemptions that can be applied to reduce their tax liability.