Residence tax in Japan is a type of local tax and plays a key role in funding local government services. Municipalities use it to support essential services such as education, childcare, welfare, fire safety, and garbage collection.
If you live in Japan and earn more than a certain amount, you need to pay this tax—even as a foreign resident. This guide explains everything you need to know about residence tax in Japan.
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Table of Contents
Profile of Writer
Yukako Yamazaki
Representative of FP Office MIRAI;
Experienced as a Registered Customs Specialist, a bank teller, and transitioned to the path of a financial planner. Founded the financial planning office “FP Office MIRAI” in 2022.
With the motto “Changing the future through reviewing the household budget,” actively engages in household budget consultations, financial article writing, and book supervision, etc.
1st grade Certified Skilled Professional of Financial Planning, Certified Financial Planner®.
If you’re interested in other articles about finance in Japan, such as NISA and taxes, you might find this article helpful.
Chapter 1: Chapter 1: What Is Residence Tax in Japan?
Residence tax is a local tax. People who earn a certain amount of income must pay it. It includes two parts: prefectural tax and municipal tax. You pay both together to the city or town where you live.
Who Pays Residence Tax?
If you have an address in Japan on January 1st, you pay residence tax. You must also have earned a certain amount of income in the previous year.
The Difference Between Income Tax and Residence Tax
Income tax uses a progressive system. The more you earn, the higher the tax rate. There are seven tax brackets: 5%, 10%, 20%, 23%, 33%, 40%, and 45%.
Residence tax has a flat rate of 10%, no matter how much you earn.
Do Foreigners Pay Residence Tax?
Yes. Foreigners who live in Japan on January 1st and earned enough income last year must pay residence tax. If you don’t pay, you may not be able to renew your visa. If you leave Japan after January 2nd, you must still pay the tax. If you can’t pay it yourself, you need to assign someone as your tax agent.
Which Foreigners Need to Pay?
If you live in Japan for over one year or plan to stay over one year as of January 1st, you need to pay residence tax. If you live outside Japan and don’t have a base in Japan, you don’t need to pay.
Chapter2: How to Calculate Residence Tax
Residence tax is based on your income from the previous year. Use the steps below to calculate it:
*Income amount – Income deductions (1) = Taxable income
*Taxable income × Tax rate (10%) – Tax credits (2) = Income-based tax
Income-based tax + Per capita tax = Total residence tax
1 Income deductions are amounts you can subtract from your income. These include personal deductions like the basic deduction and spousal deduction, and itemized deductions like life insurance premiums and medical expenses.
2 Tax credits are amounts you can subtract from the calculated tax. These include deductions for things like housing loans and hometown tax donations (furusato nozei).
Chapter 3: Income-Based Tax and Per Capita Tax
Residence tax includes two parts: income-based tax and per capita tax.
The income-based tax charges a flat 10% on your taxable income. If two people have the same deductions, the one with higher income pays more.
The per capita tax stays the same for everyone. It doesn’t change based on how much you earn.
Check the table below for more details.
| Income-Based Tax | Standard Rates |
|---|---|
|
Municipal tax |
6% |
|
Prefectural tax |
4% |
If you live in a designated city, the rates change to:
Municipal tax: 8%
Prefectural tax: 2%
| Income-Based Tax | Standard Annual Amount |
|---|---|
|
Municipal tax |
¥3,000 |
|
Prefectural tax |
¥1,000 |
|
Forest Environment Tax |
¥1,000 |
Chapter 4: Residence Tax Notification and Payment Methods
You calculate your residence tax based on your income from the previous year (January 1 to December 31). After completing your year-end adjustments or filing a tax return, the tax amount gets finalized. You will receive a tax notice around June each year.
You can pay residence tax in two ways:
Special Collection (Payroll Deduction)
If you work for a company, your employer will deduct the tax from your salary and pay it directly to the local municipality. You don’t need to do anything extra.Ordinary Collection (Self-Payment)
If your salary doesn’t have tax deductions (like if you’re self-employed, a freelancer, or no longer working but earned enough last year), you must pay the tax yourself.
You’ll receive a payment notice from the municipality in June, and you need to pay by the due date.
You can pay at banks, ATMs, convenience stores, through internet banking, or using a credit card.
Chapter 5: Important Points When Moving or Returning to Your Home Country
Residence tax works on a pay-later system.
So, even if you move or quit your job, you still must pay it. Pay special attention in these cases:
Quitting Your Job
You can ask your company to deduct the remaining residence tax from your salary or retirement pay. This option is simple and efficient. Alternatively, you can choose ordinary collection and pay the remaining tax yourself.
If you resign between January and May, the company will automatically deduct and pay the tax, regardless of your request.Returning to Your Home Country (Leaving Japan)
If you leave Japan in the middle of the year, you still must pay residence tax. Since the tax applies to the previous year’s income, you need to pay the unpaid tax before you leave Japan.
If you can’t pay in full, select a tax representative in Japan to handle the payment for you. Notify your local municipality about this.
Note that a business owner can also serve as a tax representative.
If you leave Japan without paying your tax or selecting a tax representative, reentering Japan could become difficult. Make sure to pay your taxes before returning to your home country.
Chapter 6: Frequently Asked Questions
Q1. Do students have to pay residence tax?
Students must pay residence tax if their income, such as from part-time work, exceeds a certain amount.
If you apply the working student deduction, and your income for 2024 is 1.24 million yen or less, you won’t have to pay residence tax for the current year (from June 2025 to May 2026). In the following year, if your income for 2025 is 1.34 million yen or less, you won’t have to pay residence tax for the next year (from June 2026 to May 2027) due to tax system changes in 2025.
Q2. What happens if I forget to pay?
If your company deducts the tax from your salary, you won’t have to worry about forgetting to pay. However, if you are self-employed, a freelancer, or have switched to ordinary collection after leaving your job, you must pay attention. Here’s what could happen if you fail to pay residence tax:
You will receive a reminder from the tax office.
You may get a notice via phone or mail.
The authorities may investigate your property.
They may seize your assets.
If you miss the payment deadline, you’ll have to pay a late fee, which will add to the original tax amount. Be careful not to forget to pay your residence tax.
Q3. Is there a support desk in English?
The Ministry of Internal Affairs and Communications website offers explanations about residence tax in English and other languages.
Feel free to use it as needed.
Chapter 7: Summary
Foreign residents must also pay resident tax under the same rules as Japanese citizens. Resident tax is a post-paid tax based on the previous year’s income. Even if you move or leave Japan after January 2, you still need to pay it.
Make sure you understand how resident tax works so you don’t miss any payments.
