How to Read a Japanese Payslip

Understand the items on a Japanese payslip and how payroll deductions work.

A Japanese payslip includes many items, and newcomers are often surprised by how much is deducted from the gross salary.

Basic structure

A payslip usually has three sections.

1. Earnings

• 基本給: Base salary
• 残業手当: Overtime pay
• 通勤手当: Commuting allowance
• Other company-specific allowances such as housing or family allowance

2. Deductions

• 健康保険料: Health insurance premium
• 厚生年金保険料: Pension premium
• 雇用保険料: Employment insurance
• 所得税: Income tax withheld each month
• 住民税: Residence tax, usually from the second year onward

3. Net pay

This is the amount actually deposited into your bank account.

A rough rule of thumb is that take-home pay is often around 75 to 80 percent of gross pay, though it varies.

Year-end tax adjustment

Around December, many companies perform a year-end adjustment to settle the difference between estimated and actual income tax. Employees are usually asked to submit forms by a deadline.