Information on this page is taken mainly from CLAIR materials and is correct to the best of CLAIR's knowledge, but CLAIR/Chiba/the PAs take no responsibility for the accuracy of this information. You are encouraged to check with your contracting organization or a professional tax authority.

Japanese Taxes

The following people are liable for tax in Japan:
  • all CIRs and SEAs
  • all third year and above ALTs (except 3rd year Chinese ALTs)
  • first and second year ALTs from the following countries: UK, Canada, Australia, New Zealand, Jamaica (see GIH p59, PDF29 for full list)
In other words, first and second year ALTs from the United States, Ireland, and France are exempt from Japanese taxes.

*Note that all JET arrivals April 2012 and later receive their salary before taxes have been paid.

Types of Japanese taxes

  1. Income tax (所得税 shotokuzei)
    Deducted from monthly salary. National tax with fixed rate. Amount is detailed on Statement of Earnings (源泉徴収票 gensenchoushuuhyou).
  2. Inhabitant tax, aka residence tax (or similar translations) (住民税 juuminzei)
    Rate depends on area. Paid in one of two ways:
    1. bill is sent directly to you (普通徴収 futsuu choushuu); pay at city hall, etc. when yearly bill comes in June
    2. bill goes to workplace (特別徴収 tokubetsu choushuu); is deducted from salary
*If you are liable for taxes in Japan, make sure you know how inhabitant tax is paid so you can afford the yearly bill in June.

How Japanese Taxes Work

The residence tax is applied to everyone living in Japan on January 1st of that year, and the amount is based on the previous calendar year’s income. It covers the fiscal year of April to March, and the bill for the residence tax is sent out in June. If this sounds complicated, look at the following chart (modified from the amazing Niigata & Oita JET websites).
Japanese Residence Taxes schedule 住民税.png
In the chart, a JET arrives in July 2015. They work until January 1, 2016 at which point their residence tax is calculated. That tax is calculated based on their income during 2015, and covers the period of April 2016 to March 2017. The JET receives the bill for this tax in June 2016. Depending on CO, the JET may pay this amount in one payment in June, or pay it in monthly installments.

The JET re-contracts for a second year and works until January 1, 2017, when their residence tax is calculated. This tax is based on their income during 2016, which is higher than their first year because they worked a full year, so the bill received in June 2017 will be higher.

The JET does not recontract for a third year and works until August 2017. On January 1, 2018, their residence tax is calculated based on the income they earned in Japan in 2017 (in this case, salary earned January 2017-August 2017). This bill is sent out in June 2018, after the JET has left.
**This often creates problems for those leaving: they may receive a (very expensive) bill for their 2nd year taxes in June 2017 right before leaving in August 2017, and they also leave before paying their 3rd year taxes, so they have to figure out how to pay this amount (see Taxes for leaving JETs/WI-ALTs below). If you relocate within Japan, the Moving Notification you submit will inform the tax authorities of your change in address.

How much you can expect to pay

Tax amount Oita & Niigata.png
As JETs and WI-ALTs normally only work for 5 months their first year, the tax bill is lower than other years.
Since American ALTs are exempt from taxes for their first two years, they will begin paying taxes in their third year. Their income will be taxed from the start of their third year, meaning that they will only pay taxes on five months of salary.

Income taxes (flat national rate, see Types of Japanese taxes above) will be automatically taken out of your paycheck every month, and will be between 3,000 and 8,000 yen.
(Disclaimer: We are not tax experts, and these numbers are not guaranteed to be 100% accurate. Additionally, April arrivals and JETs coming in at different times of the year will pay a different amount)

How Japanese taxes are paid

For every JET and WI-ALT, the income tax will automatically be withdrawn from your paycheck every month. For the residence tax, your contracting organization decides how it is paid.
1. Bill is sent directly to you (普通徴収 futsuu choushuu)
In this case, you individually are responsible for paying the tax. The bill comes in June and can be paid in installments (for example, split in 4 payments in June, August, October, and January). However if you will be completing your contract in August, you may need to pay in one installment or leave money with your CO to pay your taxes after you leave.
2. Bill goes to workplace (特別徴収 tokubetsu choushuu)
In this case, your CO pays the tax by withdrawing money from your salary each month (for example, from June, when the bill is received, to the next May). However, if you are completing your contract in August, you may need to pay in one installment or leave money with your CO to pay your taxes after you leave.

Confirm with your CO how you will be paying the tax soon after arriving in Japan to avoid any tax-related panic attacks!

Exemption Forms

US ALTs must obtain a certification of US residency (IRS Form 6166) and submit it with the Tax Exemption Form.
Upon arrival, your supervisor will present you with the tax exemption forms produced by the Ministry of Finance. There is an English translation of the form and samples in the GIH appendix (p227).
More information on how to file this exemption here.

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Home Country Taxes

The 2013 General Information Handbook has detailed information on filing home country taxes for: Australia, Canada, France, New Zealand, the UK, and the US (starting on p65, PDF p36) (This information has been removed from subsequent versions of the GIH).


You can also choose from the guides below, which give step-by-step instructions.
If you have more information on how to do non-US taxes, please inform a PA so we can put it up here!

US Taxes

Below are lists of the basic forms necessary to do your taxes while in Japan. For step-by-step instructions on how to fill out the forms, please see any of the guides below.

1st Year ALTs need the following forms:
8822
Change of Address
(File ASAP)
4868
Application for Extension of time to file
(by June 15)
Foreign Earned Income Statement (gensen choshu hyo 源泉徴収票)
(with form 1040)
2555-EZ
Foreign Earned Income Statement
(with form 1040)
W2
US Employers Income Statement
(with form 1040)
1040
Individual Income Tax Return
(file after 330 total days in Japan)
Publication 970
(file this if you’ve paid deductible interest on student loans in the last year)
8965
Health Coverage Exemption


2nd-5th Year ALTs
Foreign Earned Income Statement (gensen choshu hyo源泉徴収票)
(with form 1040)
2555-EZ
Foreign Earned Income Statement
(with form 1040)
1040
Individual Income Tax Return
(file after 330 total days in Japan)
Publication 970
(file this if you’ve paid deductible interest on student loans in the last year)
8822
Change of Address
(Only file this form if your address has changed within the last filed year)
8965
Health Coverage Exemption


Taxes for leaving JETs/WI-ALTs

When you do finish your time on JET or the Wisconsin ALT Program and prepare to leave, you will still be responsible for paying the taxes before you go if you are liable for taxes. It is important to discuss with your CO how taxes will be paid after you have left. This can be over 150,000 yen, and depending on how your CO handles your tax situation, you may be asked to pay it all in one installment before you go. Make sure to check with your CO how you will pay your taxes!

For JETs, the method also differs based on whether you arrived before or after July 2012 (JETs who arrived after 2012 receive their paycheck before taxes are paid). Usually taxes are paid in one of the following ways:
  1. CO pays a lump sum payment on your behalf once you receive the bill in June before you depart (JETs that arrived after 2012 will need to leave sufficient funds with their CO).
  2. CO pays monthly or quarterly payments on your behalf once you have left Japan (JETs that arrived after 2012 will need to leave sufficient funds with their CO).
  3. CO includes extra money in your gross monthly salary in order to cover the amount you owe in inhabitant taxes. In this case, you will be responsible for using these excess funds to pay your tax bill in June (JETs that arrived after 2012 will pay this lump sum out of pocket).
(Source: GIH p. 61, PDF p. 31, Kumamoto Guide p. 22)
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Individual Number (My Number)

See: Individual Number (My Number) page.



Further Reading



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