Residence Tax Basics

Understand how residence tax works in Japan, how it is calculated, and how it is paid.

Residence tax is a local tax paid to the prefecture and municipality where you live. Employees usually pay it through payroll deduction, while freelancers and others often pay it directly.

When it starts

Residence tax is based on whether you were living in Japan on January 1, and on your income from the previous year. For that reason, most people pay little or no residence tax in their first year in Japan, and the tax usually begins in the second year.

How it is calculated

Residence tax has two main parts:

• Per-capita portion: A fixed amount, often around ¥5,000 per year
• Income-based portion: About 10 percent of the previous year’s income

Example:

If your previous year’s income was ¥3,000,000, the total may be roughly ¥305,000 for the year.

How it is paid

• Employees: Usually deducted automatically from monthly salary
• Freelancers and self-employed people: Usually paid in four installments through payment slips

Important point when leaving a job

If you resign, the remaining residence tax may be collected in a lump sum from your final paycheck. It is worth checking this when changing or leaving a job.

When payment slips arrive

Payment slips often arrive around June and can usually be paid at convenience stores, banks, online banking services, or some payment apps.