How Japanese Income Tax Works — 所得税 (Shotokuzei)
Japan has a national income tax (shotokuzei) with seven brackets from 5% to 45%, plus a resident tax (juminzei) of ~10% levied by prefectures and municipalities. Employees also pay a 2.1% reconstruction surcharge on their income tax, and substantial social insurance contributions.
| Rate | Taxable income (after deductions) |
|---|---|
| 5% | ¥0 – ¥1,950,000 |
| 10% | ¥1,950,001 – ¥3,300,000 |
| 20% | ¥3,300,001 – ¥6,950,000 |
| 23% | ¥6,950,001 – ¥9,000,000 |
| 33% | ¥9,000,001 – ¥18,000,000 |
| 40% | ¥18,000,001 – ¥40,000,000 |
| 45% | Above ¥40,000,000 |
- →Employment income deduction (kyuyo shotoku koujyo): 40% for incomes up to ¥1.8M, capped at ¥1.95M
- →Basic deduction (kiso koujyo): ¥480,000 for incomes under ¥24M
- →Juminzei (resident tax): 10% — prefectural 4% + municipal 6% — paid the following year
- →Reconstruction surcharge (fukko tokubetsu shotokuzei): 2.1% of income tax through 2037
- →Health insurance: ~5% employee share; Kosei Nenkin (welfare pension): 9.15% capped at ~¥7.8M
- →Self-employed file kakutei shinkoku (final return) by March 15 — online via e-Tax portal