SORABYCO | Life in Japan

One of the first things that caught me off guard after moving from Korea to Japan was my payslip. At the time, I had only been working in Japan for a short period, so I assumed most of the money deducted from my salary was simply income tax. Then I noticed a separate item for resident tax. My immediate reaction was: “Wait, there’s another tax?” The amount looked significant when it appeared alongside health insurance and pension contributions. I later realized that what confused me most was not necessarily how much I was paying, but why the deduction appeared and how it was calculated. What Is Resident Tax in Japan? Resident tax is a local tax paid to the prefecture and municipality where you live. It is separate from national income tax and is generally calculated using your income from the previous calendar year. In other words, income earned in one year affects the local tax charged in the following year. Income Earned Resident Tax Paid 2025 2026 2026 2027 The exact amount depends o...

A few years after becoming involved in a small business in Japan, I received a withholding tax payment slip with July 10 printed as the deadline. I understood that it was related to tax, but I did not fully understand whose tax I was paying or why the business had to send it to the tax office. My first thought was simple: “Isn’t income tax something each person pays for themselves?” Once I looked into the system, I realized that the business is not paying someone else’s tax from its own money. It is temporarily holding tax that was deducted from certain payments and then forwarding that amount to the Japanese government. That distinction made the whole process much easier to understand. This article explains the basic withholding tax system in Japan, why July 10 is important for some small employers, and what business owners should check before making a payment. This article shares general information based on my experience and official guidance. Tax treatment depends on the type of p...