Residence Tax
Residence Tax (or Inhabitant's Tax) is levied based on your previous year's Jan 1- Dec 31 salary. JET's start paying the second calendar year from when they arrived. For example, if you arrive in 2012, your first tax payment will be in June of 2013. Be sure to communicate with your CO about how this tax will be taken care of!
Many people believe that because this is a residence tax that the tax rate differs by place of residence. However, in principle, the tax rate is the same across Japan with very few exceptions. The rate is 4% for prefectural and 6% for municipal for a total of 10% of one's taxable income after deductions (however, the total residence tax also includes a few other figures).
- 1st-year JETs only pay about 25,000 yen since they were in Japan only part of the previous year.
- 2nd-year JETs pay a full year's worth of about 150,000 yen
- 3rd-year JETs pay about 170,000
Based on JET salaries after July 2012
You can use this calculator to get an idea of your tax liability. You need your income statement 源泉徴収票 to use the calculator.
File:Residence Tax Calculator.xlsx
Calculator created on June 5, 2015
Payment
The bill arrives in June, and it is paid by one of the two following ways (see charts for timeline):
1. You pay 普通徴収 (futsu choshu) - The bill for the tax is sent directly to you. Then you must go pay the bill at the city/town office or bank
2. CO pays 特別徴収 (tokubetsu choshu) - The bill goes to your workplace and each month money is subtracted from your salary so your CO can pay for it.
You must settle your entire tax liability before you depart Japan.
Questions
Q: I didn’t get a bill this year or last. What do I do?
A: If you didn’t get a bill, your CO probably handles payment. Check with your CO to be sure.
Q: Will this affect my last paycheck before I depart Japan?
A: If your CO handles payment, then very likely. They may need to take out a big chunk of your last paycheck to cover the balance left on your bill. Check with your CO to get an estimate on your last paycheck. If you handle payment, then no. Your paycheck will not change, but you will still have to settle your entire bill before you leave Japan.
Q: I am a first-year JET and I am leaving before a full year in Japan. Do I still need to pay this tax?
A: Yes. The tax is levied on Jan. 1 and taxes your income from the previous year (Jan 1-Dec 31) regardless if you were in Japan for a full year.
References:
http://juuminzei.com/html/keisan.html
http://www.pref.akita.lg.jp/www/contents/1404892240188/files/dai2.pdf
