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Individual - Taxes on personal income

In Japan, permanent resident taxpayers are taxed on their worldwide income. Non-resident taxpayers are taxed only on their Japan-sourced income. Non-permanent resident taxpayers are taxed on their income other than foreign-source income (in particular, potentially, on certain capital gains) that are not remitted into Japan plus potentially part of their foreign-sourced income that is paid in or remitted to Japan.

Personal income tax rates

The current national income tax rates are:

Taxable income (JPY) Tax rate (%) Deduction Tax on Column 1 (JPY)
Over (Column 1) Not over
0 ¥ 1,950,000 5% 0 0
¥ 1,950,000 ¥ 3,300,000 10% ¥ 97,500 ¥ 97,500
¥ 3,300,000 ¥ 6,950,000 20% ¥ 427,500 ¥ 232,500
¥ 6,950,000 ¥ 9,000,000 23% ¥ 636,000 ¥ 962,500
¥ 9,000,000 ¥ 18,000,000 33% ¥ 1,536,000 ¥ 1,434,000
¥ 18,000,000 ¥ 40,000,000 40% ¥ 2,796,000 ¥ 4,404,000
¥ 40,000,000 45% ¥ 4,796,000 ¥ 13,204,000

The tax liability is determined by multiplying the excess taxable income for each bracket by the percentage above and adding the cumulative tax figure (see the Sample personal income tax calculation section for more information).


A surtax took effect 1 January 2013. The surtax consists of a 2.1% tax that is assessed on an individual’s national income tax.

Local income taxes

Generally, in Japan, the local inhabitant’s tax is imposed at a flat rate of 10%. Japanese local governments (prefectural and municipal governments) levy local inhabitant’s tax on a taxpayer’s prior year income. This applies when the taxpayer is a resident of Japan as of January 1 of the current year. For local inhabitant’s tax purposes, an equalisation per capita tax is also assessed. The standard annual amount is JPY 5,000, although this may vary based on the prefecture and municipality in which the taxpayer resides. Local inhabitant’s tax is not deductible.


A non-resident taxpayer’s Japan-source compensation (employment income) is subject to a flat 20.42% national income tax on gross compensation with no deductions available. This rate includes 2.1% of the surtax described above (20% × 102.1% = 20.42%). A non-resident taxpayer may be subject to the local inhabitant’s tax at a rate of 10% if they are registered as a resident on the local municipality ledger as of 1 January of the following year.


What is the income tax rate in Japan?
A non-resident taxpayer's Japan-source compensation (employment income) is subject to a flat 20.42% national income tax on gross compensation with no deductions available. This rate includes 2.1% of the surtax described above (20% × 102.1% = 20.42%).
Is Japan a high tax country?
With its capital being home to more millionaires than any other city on the globe, Japan is the only Asian country amongst high tax countries with a top marginal tax rate of 55.97% on income.
What is the income tax deduction in Japan?
A permanent and/or non-permanent resident employee can take an earned income deduction, computed by applying an appropriate rate to gross employment income as follows (the minimum standard deduction is JPY 550,000 or gross employment income, whichever is lower). The deduction is currently capped at JPY 1.95 million.
Is 10000 yen a lot in Japan?
5,000 yen – Comparable to an American $50 bill, this may be the one you use to pay for dinner and drinks at a well-known restaurant or izakaya. 10,000 yen – Essentially a $100 bill. Present this bill when paying for the whole family to eat.

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