Q. Can you tell us more about
social insurance and tax
payments for working people?

A.If you expect to live in Japan for more than a year and generate an income, you will pay taxes in the same way as Japanese nationals. Taxes related to working include "income tax" to the national government and "inhabitant tax" to the Tokyo Metropolitan Government and municipalities. In addition, Japan's social security system provides labor insurance and medical insurance for company employees, and as a rule, all foreign residents are also enrolled in these programs. These are deducted in advance by the company from the employee's salary and other expenses. If you have been covered by unemployment insurance for at least one year, you are entitled to receive unemployment benefits for a certain period of time after you leave the company. In addition, the vocational training system allows you to acquire new qualifications and skills without incurring any costs. Having health insurance and pension insurance will reduce the financial burden in the event of illness or injury, or in the event of old age or disability.

Labor insurance

1 Workers' accident compensation insurance

This insurance is paid to those who suffer injury or illness while working or traveling to/from work. The employer bears the entire cost of these insurance payments.

2 Employment insurance

This insurance is paid to those who lose their employment. So that working people are not troubled in their daily lives, this insurance supports them while they search for their next job.

Healthcare and pensions

1 Health insurance

This payment means you have to cover only 30% of your costs incurred due to illness or injury. Payment is also received in case of death or childbirth.

2 National pension & employee's pension insurance

This insurance is paid to working people when they reach old age or suffer some disability or death. In the case of non-Japanese workers, they can recover (as a lump-sum withdrawal payment*) some of the amount paid while enrolled in the insurance system.

※Lump-sum withdrawal payment: Funds paid upon request to non-Japanese who have participated in a pension scheme for six months or longer, payable within 2 years of their return to their home country.

Reference: Multi-lingual Living Information: Work, technical intern training and training (CLAIR)

Tax relating to income

1 Income tax

Income tax is incurred for the entire amount earned from January to December of any given year. Estimated income tax payments are automatically deducted from your monthly paycheck, with the correct tax amount adjusted in December (year-end adjustment).

2 Residence tax

This tax is payable to the local municipal authority wherever you are registered as living on January 1 of each year. The amount of tax changes depending on the amount of income you earned in the previous year, as well as whether you have a family, etc.

Reference: Multi-lingual Living Information: Tax (CLAIR)