This Is What Your Payslip Looks Like If You Work in Japan

What gets deducted from your salary?

Photo Pixabay


For most full-time employees in Japan, one of the biggest advantages of working for a corporation is you don’t have to file your taxes by yourself. Just like in the Philippines, you can skip the unbearable long lines and paperwork thanks to the company (your employer) who does it for you. However, everyone is always concerned about the deductions that incur when getting their salary. In Japan, these deductions can be categorized into two: taxes and social insurances. 


Just how much gets deducted from your payslip? 


For someone who is 25 years old, lives in Tokyo, and earns ¥200,000 a month (with no other allowances aside from transportation), you can expect the following deductions:

Amount*

Percentage to Base Salary

Salary and Allowances 

Base Salary

¥200,000

100%

Transportation Allowance

(depends)

(not included)

Taxes

Income Tax

¥5,000

2.5% 

Residence Tax

¥10,000

5%

Social Insurance

Employment Insurance

¥600

0.3%

Pension

¥18,500

9.25%

Health Insurance

¥10,000

5%

Take Home Pay

¥155,900

77.95%

*This is only the approximate amount. 


Though in the Philippines, you also get taxed, these deductions in Japan may not be quite the same. See below the types of taxes deducted from your salary if you are working in Japan.


The Taxes Deducted


The taxes that get deducted from your salary, are income tax
(shotoku-zei) and residence tax (juumin-zei). 


Income Tax


As long as you receive an income working in Japan, you are obliged to pay income tax. The calculation for income tax is quite complicated, but it mostly depends on how much one earns
annually and is not dependent on your base pay (which is monthly). 


Residence Tax


Resident Tax is collected by all prefectures in Japan as well as their local municipalities. As long as you are a resident in Japan as of January 1 of that year, you are required to pay for it. 


The Different Social Insurances (shakai hoken)


To get the benefits of a typical Japanese citizen, one must pay the following social insurances: employment insurance (
koyou hoken), workers’ accident compensation insurance* (rousai hoken), employee’s pension (kousei nenkin) or national pension (kokumin nenkin), and health insurance (kenkou hoken). 


*The employer pays for the workers’ accident compensation insurance in full. 


Employment Insurance


The employment insurance system provides unemployment benefits, etc. to workers who have become unemployed, in order to keep a means of living and help with his or her re-employment. The company is responsible in enrolling its workers in this system. 


Workers’ Accident Compensation Insurance 


Did you know there is a hidden benefit to your work contract? The Industrial Accident Compensation Insurance is also one of the many benefits that an employee gets from a Japanese company. As this is
not always indicated in the pay slip that you get every month, not everyone knows about it. 

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Pension


The Japanese public pension system is based on a structure supported by the whole society, in order to make the many, many benefits available for many years to come.?


Health Insurance


Japan prides itself as having one of the best medical care in the world. It is no wonder Japanese people have one of the longest lifespans. Medical care however, doesn’t come cheap, and health insurance is a necessity. 


How is it exactly depicted on your pay slip? 


Aside from your basic pay, overtime pay, and allowances (all of these should be stipulated in your work contract), the abovementioned deductions are also indicated (except for the workers’ accident compensation insurance).


While it seems a lot, all of these are mandated by law in order to keep employees safe and secure—physically, and, in a sense, financially as well. 


*As laws and rules change, information is subject to change without notice. Please take note that this serves as a guide only. 


Source: Ministry of Justice website.


 (21 April 2019)

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