Question 1

How does iDeCo reduce my taxes?

Accepted Answer

iDeCo contributions are fully deductible from your taxable income. For example, if you contribute ¥23,000/month (¥276,000/year) and are in the 20% income tax bracket, you save roughly ¥55,200 in income tax plus another ¥27,600 in residence tax — about ¥82,800/year in total tax savings.

Question 2

What is Furusato Nozei and how does it work?

Accepted Answer

Furusato Nozei (ふるさと納税) lets you donate to local governments and receive regional gifts (rice, meat, fruits, etc.) while getting a tax credit. You pay ¥2,000 out of pocket; the rest is credited against your residence tax. There's a limit based on your income — this calculator estimates that limit for you.

Question 3

Why is residence tax ¥0 in my first year?

Accepted Answer

Residence tax (住民税) is billed on your income from the previous calendar year. In your first year in Japan, you have no prior-year Japanese income, so your residence tax is ¥0. From year 2 onward, you'll pay residence tax based on what you earned the year before.

Question 4

What is the 2.1% reconstruction surtax?

Accepted Answer

After the 2011 earthquake, Japan added a 2.1% surtax on top of income tax to fund reconstruction. This continues through 2037. Your income tax is multiplied by 1.021 to include this surtax.

Question 5

How does the India-Japan DTAA prevent double taxation?

Accepted Answer

The Double Taxation Avoidance Agreement (DTAA) between India and Japan ensures you aren't taxed twice on the same income. If you're a Japan tax resident (183+ days), Japan taxes your worldwide income, but you can claim a foreign tax credit for taxes paid to India. Consult a cross-border tax professional for your specific situation.

Question 6

What changed in the 2026 tax reform?

Accepted Answer

The 2026 reform temporarily raised the basic deduction for lower incomes (up to ¥95万 for incomes ≤¥132万) and increased the income threshold before the deduction tapers. This benefits lower and middle-income earners. iDeCo limits were also raised.

Gross salary	¥6,000,000
	−¥1,640,000
	−¥580,000
	−¥885,000
Health insurance	−¥300,000
Pension ()	−¥549,000
Employment insurance	−¥36,000
Income tax	−¥196,032
	−¥309,500
Take-home	¥4,609,468

Japan Tax Calculator

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