What is Resident Tax in Japan?

Resident tax (住民税 - juuminzei) is a local tax in Japan collected by municipal and prefectural governments. It is calculated based on your previous year's income and is paid separately from national income tax. This tax helps fund local services such as education, waste collection, firefighting, and infrastructure maintenance in your area.

All residents of Japan, including foreign residents who have lived in Japan for more than one year, are required to pay resident tax if they had income in the previous year. The tax is based on where you lived as of January 1st of the current year, regardless of subsequent moves within Japan.

What are the Resident Tax rates?

Resident tax consists of two primary components - prefectural and municipal tax. Unlike income tax, resident tax has a flat rate structure rather than progressive brackets. Each component includes both an income-based portion and a fixed per capita amount:

How can I pay Resident Tax?

Resident tax can be paid through three different methods depending on your employment situation. In general, most salaried employees in Japan will automatically be enrolled in Special Collection which comes out of your paycheque automatically. There is not an option to pay yourself unless you are self-employed.

Special Collection (特別徴収):

• Automatically deducted from monthly salary by your employer
• Total annual tax is divided into 12 equal payments
• Most common method for company employees
• Employers are legally required to use this method when possible

Regular Collection (普通徴収):

• Paid directly to the municipality in four installments (June, August, October, and January)
• Common for self-employed individuals or those with irregular income
• Payment can be made at convenience stores, banks, or through online banking

Lump-sum Payment:

• Full amount paid at once, usually in June
• Often used when leaving Japan mid-year
• Some municipalities offer small discounts for lump-sum payments

Important Notes

Resident tax isn't like income tax - since it is only levied on people working in Japan on January 1st and based off of the previous years income, it can be a bit confusing to understand. We've outlined some common points below.

One-Year Delay:

There is a 1 year delay in paying resident tax. For example, if you make 5 million yen in 2025, you will pay resident tax for this amount in 2026.

• Based on previous year's income (January to December)
• First payment typically begins in June of the following year
• This can surprise first-time workers in their second year

Moving and Job Changes:

• Tax is paid to the municipality where you lived on January 1st
• Moving after January 1st doesn't change where you pay that year's resident tax
• When changing jobs, your old employer should provide documentation about resident tax status

Special Circumstances:

• New arrivals to Japan typically don't pay in their first year
• Those leaving Japan must settle remaining payments before departure
• Some municipalities offer exemptions or reductions for low-income earners (typically below ¥1,000,000 annually)
• Natural disaster victims may qualify for temporary tax relief