Does Japan have an IRS?

[wasabijuice]

Originally Posted by Nyororin

and another 5% for income, which is paid in a yearly bundle except for overtime and bonuses (they are paid as "adjustment"). For our summer bonus, 7.5% of it went to income taxes. I THINK that overtime is also calculated on a different scale but really am not sure.

So, I`d say between 23~25% regularly.

You said it yourself 5% for income, yes all the others add up to 25%, The site noodle linked to lumps everything together. If you are self employed you don't pay that much, and you can deduct tons. I've only had to pay 2 years, and that isn't much.

[Nyororin]

Originally Posted by wasabijuice

You said it yourself 5% for income, yes all the others add up to 25%, The site noodle linked to lumps everything together. If you are self employed you don't pay that much, and you can deduct tons. I've only had to pay 2 years, and that isn't much.

I just calculated based on my husband`s pay slip from last month. I don`t have the yearly one on hand to check with.

[sarasi]

Originally Posted by Nyororin

The residents tax, by the way, has little to do with your income. It is MOSTLY based on the value of the property where you live. Live somewhere with pricey property, then it`s going to be a lot higher than if you live out where land is cheap.

I'm sorry to disagree with you here as you provide a lot of great info on this site, but it has quite a lot to do with your income. A search on the internet has just confirmed that for me- here is some info from just one page: "Resident tax should be paid to the municipality where you live (as of January 1) during the period from June to May. The tax amount is calculated according to your previous year's income."

I know from my own experience that with the years I earn less (I sometimes do extra temp work, but the amount varies), I pay less resident's tax the following year.

I also know that my friend's husband, who is a highly paid executive, pays many times more resident's tax than I do, despite living in the same ward. How could they charge people with very different incomes the same amount? It just wouldn't work.

As I said above, the percentage you pay will vary by a few percentage points depending on where you live, but how much you pay is based largely on the previous year's income. That's how they calculate it.

[Sangetsu]

Originally Posted by sarasi

I'm sorry to disagree with you here as you provide a lot of great info on this site, but it has quite a lot to do with your income. A search on the internet has just confirmed that for me- here is some info from just one page: "Resident tax should be paid to the municipality where you live (as of January 1) during the period from June to May. The tax amount is calculated according to your previous year's income."

I know from my own experience that with the years I earn less (I sometimes do extra temp work, but the amount varies), I pay less resident's tax the following year.

I also know that my friend's husband, who is a highly paid executive, pays many times more resident's tax than I do, despite living in the same ward. How could they charge people with very different incomes the same amount? It just wouldn't work.

As I said above, the percentage you pay will vary by a few percentage points depending on where you live, but how much you pay is based largely on the previous year's income. That's how they calculate it.

But the rate varies also according to your location, it is not solely dependent on income.

[sarasi]

Yep, we are in agreement there. The rate depends on where you live, but the actual amount you pay is based on your income, therefore people living in the same area will pay very different amounts. To say that your income has little to do with how much resident's tax you pay is inaccurate- it is a major factor.

[Nyororin]

I didn`t say income had nothing to do with it - but in our experience location changes it 10x more than income.
When we jumped from pretty much 0 income (students with parents paying for housing) to $3000/month income - our residential taxes went up by a whopping 8000/year. (158000/yr vs 150000/yr)
When we moved, it doubled.

Of course income is going to have an effect, but it`s NOT the biggest deciding factor. That`s location. All income will do is make it fluctuate within the already set area... Which isn`t that big of a thing.

If you only look within one area, yes, your income has everything to do with it. But if you look at the entire country it has very little...

Do you see what I was trying to say?

[sarasi]

Sure, I see what you are saying. I pay a higher percentage now than I did when I lived in Saitama, certainly. From your previous posts though, people who didn't know about the system might come away with the idea that the tax is a fixed amount based on the area you live in (i.e. not related to income), which is far from the truth.

I think we've cleared it up now!