Explanation of Taxes Foreign Nationals Need to Know When Living in Japan

Are you going to start a new life in Japan?

Or, if you are thinking of studying abroad or working for a Japanese company in the future, you may be wondering how much it will cost in Japan.

For example, you may want to know about the types of taxes you will have to pay when you receive your salary.

This article explains the taxes you need to know about when living in Japan.

Inhabitant’s Tax

Resident’s tax is a tax to be paid to the municipality in which you live.

If you work for a company and receive a salary, you are required to pay the tax even if you are a foreigner.
The company calculates the inhabitant tax based on your salary, subtracts the tax from your salary, and pays it for you.

Freelancers will receive a paper payment of inhabitant tax directly at home, and they will go to a convenience store or a bank to pay the tax by themselves.

If you decide to return to your home country, you may also have to continue to make payments.
This is because the rule states that the resident tax for the previous year is to be paid this year.
If you are still owed, please be sure to go to your local municipal office for advice.

You can pay in a lump sum, but please note that you may have to decide who will pay on your behalf if there is still a balance to be paid.

Income Tax

Income tax is a tax that you pay to the government.
When you actually start living in Japan, the tax is deducted from the salary you receive at that time.

For those who work for a company, the company calculates and pays the inhabitant tax, but for freelancers, you will have to pay it yourself.
You do the calculations yourself or go to the tax office to check on your taxes.

Pension and Health Insurance

Pension

First, let me explain about pensions.
Since I do not know whether I will be living in Japan in the future, do I not have to pay it? You may wonder why you don’t have to pay.
However, when you are living in Japan, you are required to pay the pension.

In Japan, if you are between the ages of 20 and 59, you are required to join the pension system if you have a residence in Japan, regardless of your nationality.

In addition, if you still want to live in Japan in the future, it will also be one of the criteria for obtaining a permanent residence visa, so be sure not to delay or forget to make your payments.

Next, let’s look at health insurance.

Health Insurance

Health insurance is a payment that is also required to use health insurance services.
In Japan, you can enroll in health insurance and use your insurance card to pay 30% of the cost of medical care when using hospitals.

However, if you are uninsured, you may worry about your health, and you will have to pay 10% instead of 30% at the hospital.
In Japan, it is assumed that everyone is insured, so be sure to purchase health insurance.

If you belong to a company, you will be enrolled in both employee pension and health insurance.
Again, in this case, the company does the calculations and pays the employee pension and insurance premiums on your behalf by deducting them from your salary.

However, freelancers are enrolled in the National Pension Plan and Health Insurance instead of the Employees’ Pension Plan.
Payment forms for health insurance and national pension will be sent directly to your home, and you will pay the pension and insurance premiums yourself at a convenience store or bank.

For foreign students and other students, the rules may be different, so please go to the ward office where you live for consultation.

Consumption Tax

Since you are not a tourist, you are not exempt from tax.

Consumption tax is paid on purchases made during your stay in Japan.

Conclusion

The above explains the taxes you need to know about when living in Japan.

When you live in Japan, you will have to pay a lot of money for taxes.
You may be surprised at the amount of money you have to pay. You may be surprised at how much it costs, but paying taxes is a necessary part of your life.

It will affect your future permanent residence visa application, visa renewal, and visa modification, so don’t avoid paying taxes.