How it is calculated
In Japan, social insurance comes off each paycheck first, income tax is settled for the whole year at the year-end adjustment (nenmatsu chosei), and resident tax on this income is deducted from the following June.
Social insurance = standard monthly remuneration × rate ÷ 2 (health, care, support levy, pension) + pay × 0.5% (employment insurance) Employment income = annual pay − employment income deduction (minimum ¥740,000) Taxable income (income tax) = employment income − social insurance − basic deduction (e.g. ¥1.04 million) − spouse/dependent deductions Income tax = bracket tax × 102.1% (reconstruction surtax) Resident tax = (employment income − social insurance − ¥430,000 basic deduction − …) × 10% − adjustment credit + ¥5,000 per-capita levy and forest environment tax Take-home = annual pay − social insurance − income tax − resident tax
- Standard monthly remuneration: Your monthly pay mapped to a grade table: ¥58,000–¥1.39 million (50 grades) for health insurance and ¥88,000–¥650,000 (32 grades) for pension, so high earners stop at the cap.
- Bonuses: The same rates apply to the bonus rounded down to ¥1,000, capped at ¥5.73 million per fiscal year (April–March) for health insurance including care and the support levy, and ¥1.5 million per month for pension (bonuses paid in the same month are added together).
- Age: From 40 to 64 a 1.62% long-term care premium is added; from 65 it is no longer taken from pay (the municipality collects it), and from 70 there is no pension premium.
2026 tax brackets and premium rates
- Basic deduction (2026): ¥1.04 million for total income up to ¥4.89 million, ¥670,000 up to ¥6.55 million, ¥620,000 up to ¥23.5 million (FY2026 tax reform, applied at the December 2026 year-end adjustment)
- Employment income deduction: Minimum ¥740,000 (2026 and 2027; the same applies to resident tax on 2026 income, FY2027). Above ¥2.2 million of pay: 30% + ¥80,000, 20% + ¥440,000, 10% + ¥1.1 million, capped at ¥1.95 million
- Health insurance: Kyokai Kenpo rates by prefecture from 9.21% (Niigata) to 10.55% (Saga), Tokyo 9.85% — split equally with the employer
- Long-term care and support levy: Care 1.62% (age 40–64); child and childcare support levy 0.23% (new from April 2026)
- Pension and employment insurance: Employees’ Pension 18.3% (you pay half); employment insurance 0.5% for employees (from April 2026)
- Resident tax: 10% income levy (6% municipal, 4% prefectural), ¥4,000 per-capita levy plus the ¥1,000 forest environment tax, ¥430,000 basic deduction (unchanged for FY2027)
| Taxable income (¥) | Rate | Deduction (¥) |
|---|---|---|
| Under 1.95M | 5% | 0 |
| 1.95M–3.3M | 10% | 97,500 |
| 3.3M–6.95M | 20% | 427,500 |
| 6.95M–9M | 23% | 636,000 |
| 9M–18M | 33% | 1,536,000 |
| 18M–40M | 40% | 2,796,000 |
| 40M and over | 45% | 4,796,000 |
Income tax quick table (National Tax Agency No. 2260). A 2.1% reconstruction surtax is added to the tax.
Example: Tokyo, age 30, ¥300,000 a month + ¥600,000 bonuses
Two bonuses of ¥300,000 a year, no spouse or dependents. Social insurance taken from each monthly salary is ¥44,070 (health ¥14,775, support levy ¥345, pension ¥27,450, employment ¥1,500).
| Item | Annual (¥) |
|---|---|
| Gross annual pay | 4,200,000 |
| Health insurance | −206,850 |
| Child support levy | −4,830 |
| Employees’ Pension | −384,300 |
| Employment insurance | −21,000 |
| Income tax (incl. surtax) | −64,400 |
| Resident tax | −189,700 |
| Annual take-home | 3,328,920 |
Employment income ¥2.92 million; taxable income ¥1.263 million for income tax (5% bracket) and ¥1.873 million for resident tax. Average monthly take-home is about ¥277,410 (79.3% of gross).
Things to watch
- Resident tax is based on the previous year’s income. Nothing is deducted in your first year of work; deductions start in June of your second year. The resident tax here is what you pay from June 2027 on 2026 income.
- The higher 2026 basic and employment income deductions take effect on December 1, 2026, so monthly withholding through November uses the old rules and the difference is refunded at the December year-end adjustment.
- Company health insurance societies have their own rates — use “Enter a rate”. Commuting allowances count for premiums but are tax-free up to a limit for income tax (simplified here).
- Life insurance deductions, iDeCo, furusato nozei, the housing loan credit, children under 16 (for the resident tax exemption test) and the old rates (health insurance for January–February, 0.55% employment insurance for January–March) are not included.
- If your pay exceeds ¥8.5 million and you have a dependent under 23, an income amount adjustment deduction of (pay − ¥8.5 million) × 10% (up to ¥150,000) applies. This calculator applies it when you enter a specified dependent (age 19–22).
Frequently asked questions
What share of gross pay is take-home?
For annual pay of ¥3–6 million it is roughly 75–80%. Higher incomes face higher tax rates, while the premium share falls because of the standard remuneration caps.
What happened to the “¥1.03 million wall”?
For 2026, the ¥740,000 minimum employment deduction plus the ¥1.04 million basic deduction means no income tax on pay up to ¥1.78 million (total income up to ¥4.89 million). Resident tax starts at a lower income because its basic deduction is ¥430,000 (for a single person in a Class 1 area, from pay above ¥1.19 million).
Why does take-home pay drop at 40?
From the month you turn 40 (the month containing the day before your birthday) you become a Category 2 long-term care insured person, adding 1.62% to the health premium (0.81% for you).
What is the child and childcare support levy?
A new levy collected with health insurance from April 2026; Kyokai Kenpo charges 0.23% (0.115% for you). It is deductible as social insurance.
Basis and sources
- Kyokai Kenpo — FY2026 health insurance rates by prefecture
- Kyokai Kenpo — premium table from March 2026 (Tokyo branch)
- Japan Pension Service — Employees’ Pension premium table (FY2026)
- Ministry of Health, Labour and Welfare — FY2026 employment insurance rates
- National Tax Agency — No. 2260 Income tax rates
- National Tax Agency — FY2026 tax reform (higher basic deduction)
- National Tax Agency — No. 1410 Employment income deduction
- National Tax Agency — No. 1191 Spouse deduction
- National Tax Agency — No. 1411 Income amount adjustment deduction
- Ministry of Finance — FY2026 tax reform outline (resident tax employment deduction)
- Ministry of Internal Affairs and Communications — Individual resident tax