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From April 2022, the unemployment insurance tax rate on salaries will increase. The current rate is 0.9% in total which will increase to 0.95%.
The total unemployment insurance tax is paid between company and employee. Current rate for company share is 0.6% and for employee 0.3%, which will increased to 0.65% and 0.3% respectively.
Japan Health Insurance Association announced that the rate of nursing insurance will decrease from March 2022. It will change from 1.80% to 1.64%.
Nursing insurance is calculated by: Standard Monthly Salary (and Bonus) X Insurance rate
The first payroll calculation with this new rate will appear in April payroll. However, on the bonus, the new rate should be applied to March bonus calculation.
Please note that nursing insurance is paid only by people from 40 to 64 years old.
Japan Health Insurance Association announced that the Health insurance tax rate will decrease from March 2022. Each prefecture has a difference tax rate.
For example, in Tokyo, the current rate is 9.84%, which will decrease to 9.81 %.
A 50% / 50% Health insurance contribution is made between the company and the employee. As such, both company and employee will pay 4.905% (e.g. rates for Tokyo) of the total of the employee’s monthly salary and commuting cost with a cap.
Please note that this tax rate decrease will appear in April payroll onward since there is one month delay between the tax due and actual deduction from salary.
For bonuses, the new rate will be applied on the March bonus calculation.
Japan Health Insurance Association announced that the rate of nursing insurance will increase from March 2021. It will change from 1.79% to 1.80%.
Nursing insurance is calculated by: Standard Monthly Salary (and Bonus) X Insurance rate
The first payroll calculation with this new rate will appear in April payroll. However, on the bonus, the new rate should be applied to March bonus calculation.
Please note that nursing insurance is paid only by people from 40 to 64 years old.
Japan Health Insurance Association announced that the Health insurance tax rate will decrease from March 2021. Each prefecture has a difference tax rate.
For example, in Tokyo, the current rate is 9.87%, which will decrease to 9.84 %.
A 50% / 50% Health insurance contribution is made between the company and the employee. As such, both company and employee will pay 4.92% (e.g. rates for Tokyo) of the total of the employee’s monthly salary and commuting cost with a cap.
Please note that this tax rate decrease will appear in April payroll onward since there is one month delay between the tax due and actual deduction from salary.
For bonuses, the new rate will be applied on the March bonus calculation.
From September 2020, ceiling of the pension tax on salaries will be revised from 620,000 JPY to 650,000JPY.
The total Japan Pension payroll tax is paid 50%/50% between company and employee. As such, company and employee both pay 9.15% each from the monthly salary plus commuting costs refunded to employee.
Please note that this payroll tax raise will appear on October payroll since there is a month lag between the payroll tax due and the date when it is actually deducted from salary.
For more details on payroll calculation see our payroll website: http://japan-payroll.com/
Japan Pension Service has announced the increase in the Children Upbringing taxes from May 2020. The rate has increased from 0.34% to 0.36%. The new rate will apply from the May payroll and April bonus.
Children Upbringing taxes are paid 100% by the company.
Japan Health Insurance Association announced that the rate of nursing insurance will increase from March 2020. It will change from 1.73% to 1.79%.
Nursing insurance is calculated by: Standard Monthly Salary (and Bonus) X Insurance rate
The first payroll calculation with this new rate will appear in April payroll. However, on the bonus, the new rate should be applied to March bonus calculation.
Please note that nursing insurance is paid only by people from 40 to 64 years old.
Japan Health Insurance Association announced that the Health insurance tax rate will decrease from March 2020. Each prefecture has a difference tax rate.
For example, in Tokyo, the current rate is 9.90%, which will decrease to 9.87 %.
A 50% / 50% Health insurance contribution is made between the company and the employee. As such, both company and employee will pay 4.935% (e.g. rates for Tokyo) of the total of the employee’s monthly salary and commuting cost with a cap.
Please note that this tax rate decrease will appear in April payroll onward since there is one month delay between the tax due and actual deduction from salary.
For bonuses, the new rate will be applied on the March bonus calculation.
Japan Pension Service has announced the increase in the Children Upbringing taxes from May 2019. The rate has increased from 0.29% to 0.34%. The new rate will apply from the May payroll and April bonus.
Children Upbringing taxes are paid 100% by the company.
Japan Health Insurance Association announced that the rate of nursing insurance will increase from March 2019. It will change from 1.57% to 1.73%.
Nursing insurance is calculated by: Standard Monthly Salary (and Bonus) X Insurance rate
The first payroll calculation with this new rate will appear in April payroll. However, on the bonus, the new rate should be applied to March bonus calculation.
Please note that nursing insurance is paid only by people from 40 to 64 years old.
Japan Pension Service has announced the increase in the Children Upbringing taxes from May 2018. The rate has increased from 0.23% to 0.29%. The new rate will apply from the May payroll and April bonus.
Children Upbringing taxes are paid 100% by the company.
Japan Health Insurance Association announced that the Health insurance tax rate will decrease from March 2018. Each prefecture has a difference tax rate.
A 50% / 50% Health insurance contribution is made between the company and the employee. As such, both company and employee will pay 4.95% (e.g. rates for Tokyo) of the total of the employee’s monthly salary and commuting cost with a cap.
Please note that this tax rate decrease will appear in April payroll onward since there is one month delay between the tax due and actual deduction from salary.
For bonuses, the new rate will be applied on the March bonus calculation.
Japan Health Insurance Association announced that the rate of nursing insurance will increase from March 2018. It will change from 1.65% to 1.57%.
Nursing insurance is calculated by: Standard Monthly Salary (and Bonus) X Insurance rate
The first payroll calculation with this new rate will appear in April payroll. However, on the bonus, the new rate should be applied to March bonus calculation.
Please note that nursing insurance is paid only by people from 40 to 64 years old.
Japan Pension Service has announced the increase in the Children Upbringing taxes from May 2017. The rate has increased from 0.20% to 0.23%. The new rate will apply from the May payroll and April bonus.
Children Upbringing taxes are paid 100% by the company.
Japan Health Insurance Association announced that the Health insurance tax rate will decrease from March 2017. Each prefecture has a difference tax rate.
For example, in Tokyo, the current rate is 9.96%, which will decrease to 9.91 %.
A 50% / 50% Health insurance contribution is made between the company and the employee. As such, both company and employee will pay 4.955% (e.g. rates for Tokyo) of the total of the employee’s monthly salary and commuting cost with a cap.
Please note that this tax rate decrease will appear in April payroll onward since there is one month delay between the tax due and actual deduction from salary.
For bonuses, the new rate will be applied on the March bonus calculation.
Japan Health Insurance Association announced that the rate of nursing insurance will increase from March 2017. It will change from 1.58% to 1.65%.
Nursing insurance is calculated by: Standard Monthly Salary (and Bonus) X Insurance rate
The first payroll calculation with this new rate will appear in April payroll. However, on the bonus, the new rate should be applied to March bonus calculation.
Please note that nursing insurance is paid only by people from 40 to 64 years old.
Japan Pension Service has announced the increase in the Children Upbringing taxes from May 2016. The rate has increased from 0.15% to 0.2%. The new rate will apply from the May payroll and April bonus.
Children Upbringing taxes are paid 100% by the company.
Japan Health Insurance Association announced that the Health insurance tax rate will increase from March 2016. Each prefecture has a difference tax rate.
For example, in Tokyo, the current rate is 9.97%, which will decrease to 9.96 %.
A 50% / 50% Health insurance contribution is made between the company and the employee. As such, both company and employee will pay 4.98% (e.g. rates for Tokyo) of the total of the employee’s monthly salary and commuting cost with a cap.
Please note that this tax rate decrease will appear in April payroll onward since there is one month delay between the tax due and actual deduction from salary.
For bonuses, the new rate will be applied on the March bonus calculation.
From September 2014, the pension tax rate on salaries will increase. The current Tokyo rate is 17.120% which will increase to 17.474%.
The total Japan Pension payroll tax is paid 50%/50% between company and employee. As such, company and employee both pay 8.737% each from the monthly salary plus commuting costs refunded to employee.
The pension payroll taxes will gradually increase by 0.354% every year until September 2017 to the target rate 18.300% set by the government.
Please note that this payroll tax raise will appear on October payroll since there is a one month lag between the payroll tax due and the date when it is actually deducted from salary.
As every year, the resident tax deduction will be adjusted on the June payroll. The resident tax deducted from June is based on the taxable income of the previous year. Resident tax is roughly equal to 10% of the previous year taxable income. The resident tax amounts to be paid are calculated by the local tax office and payments slips are sent to the head office of the company. The resident tax for the year 2013 will be deducted from salary every month from June 2014 to May 2015 for employees who wish the resident tax to be deducted from their monthly salary.
Japan Health Insurance Association announced that the rate of nursing insurance will increase from March 2014. It will change from 1.55% to 1.72%.
Nursing insurance is calculated by: Standard Monthly Salary (and Bonus) X Insurance rate
The first payroll calculation with this new rate will be April. However, on the bonus, the new rate should be applied to it whose payment day should be from March 1st 2014.
Please note that nursing insurance is paid only by people from 40 to 64 years old.
From September 2013, the pension tax rate on salaries will increase. The current Tokyo rate is 16.766% which will increase to 17.120%.
The total Japan Pension payroll tax is paid 50%/50% between company and employee. As such, company and employee both pay 8.56% each from the monthly salary plus commuting costs refunded to employee.
The pension payroll taxes will gradually increase by 0.354% every year until September 2017 to the target rate 18.300% set by the government.
Please note that this payroll tax raise will appear on October payroll since there is a one month lag between the payroll tax due and the date when it is actually deducted from salary.
From January 1st 2013 to December 31st 2037, the withholding tax rates will be raised by 2.1%.
This surtax is part of the measures to finance the reconstruction after the Great East Japan earthquake that happened in March 2011.
For example, the new rate for the 10% withholding tax up to 1 Million JPY payment will be 10.21, for 20% withholding tax for payments over 1 Million JPY, the tax rate will become 20.42%.
Withholding taxes on salaries will also rise based on the table published by the National Tax Agency.
From September 2012, the pension tax rate on salaries will increase. The current Tokyo rate is 16.412% which will increase to 16.766%.
The total Japan Pension payroll tax is paid 50%/50% between company and employee. As such, company and employee both pay 8.383% each from the monthly salary plus commuting costs refunded to employee.
The pension payroll taxes will gradually increase by 0.354% every year until September 2017 to the target rate 18.300% set by the government.
Please note that this payroll tax raise will appear on October payroll since there is a one month lag between the payroll tax due and the date when it is actually deducted from salary.
As every year, the resident tax deduction will be adjusted on the June payroll. The resident tax deducted from June is based on the taxable income of the previous year. Resident tax is roughly equal to 10% of the previous year taxable income. The resident tax for the year 2011 will be deducted from salary every month from June 2012 to May 2013 for employees who wish the resident tax to be deducted from their monthly salary.
From January 1st 2013, the deduction authorized for professional expenses for employees with a net salary over 15 Million JPY will be capped to 2. 45 Million JPY. Until now the deduction allowed for net salaries of 15 Million JPY and over was 1. 7 Million JPY +5% of net salary.
This will result in an effective tax increase of the top marginal tax rate on salaries from 47.5% to 50%.
Japan Pension Service has announced the increase in the Children Upbringing taxes from April 2012. The rate has increased from 0.13% to 0.15%. The new rate will apply from the May payroll and April bonus.
Children Upbringing taxes are paid 100% by the company.
Japan Health Insurance Association announced that the Health insurance tax rate will increase from March 2012. Each prefecture has a difference tax rate.
For example, in Tokyo, the current rate is 9.48%, which will increase to 9.97 %.
A 50% / 50% Health insurance contribution is made between the company and the employee. As such, both company and employee will pay 4.985% (e.g. rates for Tokyo) of the total of the employee’s monthly salary and commuting cost with a cap.
For employees aged 40 to 64, an additional Nursing insurance will apply. There will also be an increase in the nursing insurance from the current 1.51% to 1.55% (nationwide uniform rate) from March 2012. As with the Health insurance, a 50% / 50% split of the tax burden between company and employee applies to the Nursing insurance. Therefore, for employees aged 40 to 64, the total Health insurance and Nursing insurance tax will increase from the current 10.99% to 11.52% (Tokyo rate).
Please note that this tax rate increase will appear in April payroll onward since there is one month delay between the tax due and actual deduction from salary.
For bonuses, the new rate will be applied on the March bonus calculation.
As the year approaches, many companies think about paying bonus to employees. We recommend that companies pay bonus in January instead of December. The reason is that since companies must calculate employees tax liability during the year end withholding tax adjustment, ” nenmatsu chosei” in Japanese, late decision in attributing bonus can create issues for calculating the December payroll when tax liabilities must be calculated. A bonus paid in January can still be considered as a previous year tax deductible expense for foreign companies with a December year end.
Please also consult our payroll in Japan page
Disclaimer: This information is for illustration purpose only. JMC cannot be held liable for any decision made based on this information. For any advice regarding taxes in Japan, Licensed tax accountant should be consulted.
Consult our Social Insurance Page for More Details
Contact Us
Recruitment license: No 13-Yu-305753
Copyright 2022 JMC K.K.
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