- September 7, 2026
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First year taxes in Japan can be deceptively light: residence tax often isn’t taken from your salary at all, so your take-home pay may look bigger than you expected. But the burden hasn’t gone away. Not only does residence tax kick in the following year—if you have overseas income, how much of it Japan taxes also depends on whether you count as a non-permanent resident and whether you remit money to Japan.
This is especially true for high-earning professionals and people with assets abroad, who have different things to check than the average company employee. In this guide, certified financial planner Masamichi Takayanagi explains the tax pitfalls that are easiest to overlook in your first year in Japan—from the residence-tax lag, to how non-permanent resident status and remittances affect what’s taxed, to when you need to file a return yourself.
About the Supervisor & Writer
Masamichi Takayanagi
Financial Planner & columnist;
An independent financial planner with extensive experience as a financial columnist, specializing in a wide range of topics including asset management, life insurance, inheritance, loan products, and credit cards. Over 1,000 articles and projects have been contributed to the field.
1st grade Certified Skilled Professional of Financial Planning, Certified Financial Planner®.
Table of Contents
Chapter 1: The One-Year Lag, in 30 Seconds
If you arrive in Japan for the first time and set up residence after January 1 of a given year, you usually owe no residence tax for that year. That’s because residence tax is charged based on where you lived as of January 1, using the previous year’s income—and if you had no Japanese income the year before, there’s no base for it to be charged on.
Whether you’re taxed comes down to which municipality you’re registered in as of January 1 each year. The special collection deducted from your salary also runs on a fiscal year, from June through May.
For example, if you first arrive in September 2026, you had no address in Japan as of January 1, 2026—so you generally owe no residence tax for fiscal 2026. But if you have an address in Japan on January 1, 2027, residence tax kicks in around June 2027, based on your income from September to December 2026.
For how residence tax works in detail, see our related guide.
Chapter 2: Year Two Is When It Hits — Budget Now
The first time residence tax comes out of your salary is usually around June of the year after you arrive. Here’s the part people miss: that first bill isn’t based on a full year’s salary. It’s based on what you earned in the year you arrived. So if you landed in the second half of the year, your first residence tax bill is usually on the smaller side.
How is it calculated? The income-based part is 10% at the standard rate, split between your municipality and prefecture. In Tokyo’s 23 wards, for example, that’s 6% ward tax and 4% metropolitan tax. Then there are two flat charges on top:
- Per-capita levy: ¥4,000 (standard)
- Forest-environment tax: ¥1,000
Your real bill will be lower than the headline rate suggests, though, once deductions—salary income, social insurance, dependents—are taken into account.
Here’s a simple way to plan for it. In your first year, move part of each paycheck into a separate account for residence tax. Then, at year-end, re-estimate based on what you actually earned and your deductions. Don’t just go by your salary—”¥16 million a year, so ¥X a month.” Start from the month you arrived and the income you’ll really make that year.
For a full breakdown of your payslip, see the guide below.
Chapter 3: Are You a "Non-Permanent Resident"?
For high-earning professionals, the biggest forks in the road are these two:
- The remittance trap — how sending money to Japan can pull overseas income into the tax net
- Overseas income and assets — what Japan can tax, and when
The more income sources or assets you hold abroad, the more the answer varies from person to person—so start by pinning down your own residency classification.
The Remittance Trap
To figure out how your overseas income is taxed, you start with one question: are you a “resident” or a “non-resident” under income tax law? As a rule, you’re a resident if your home is in Japan, or if you’ve had a place to live here for a continuous year or more. From there, foreign nationals who are residents are sorted again—into “non-permanent residents” and everyone else.
If you’re a non-permanent resident, you’re taxed on all your income except foreign-source income. But there’s an exception: foreign-source income still gets taxed if it’s paid inside Japan, or if you remit it to Japan.
And here’s where people slip up: money landing in your overseas account is not automatically “foreign-source income.“
Say a foreign company pays your salary into an account back home. If that salary is for work you actually did in Japan, it can still be taxable here—no matter which account it lands in. Where the income comes from isn’t decided by where it’s paid.
Remittances work the same way. If you had foreign-paid income during the year and then send money to Japan, the tax rules can treat that transfer as matching your income—and tax it. You might think you’re just wiring over old savings for living costs. But that on its own doesn’t prove the money wasn’t tied to this year’s foreign-source income.
The math gets complicated fast, depending on how much you send and what kind of income you have. So in any year you’ve got overseas income, it’s worth checking with a tax accountant before you move a large sum into Japan.
Related Post
Overseas Income and Assets
If you own real estate or investment assets abroad, check your income and your assets separately.
Take rent from a property located overseas. Even that can count as “paid within Japan”—the National Tax Agency gives it as an example—if it’s deposited directly into your Japanese bank account, which matters when working out a non-permanent resident’s taxable range.
Capital gains on foreign shares, on the other hand, come with special rules that can turn on things like when you acquired them. Don’t assume that “it’s an overseas brokerage account, so I’m not taxed unless I remit”—it isn’t that simple.
Once you’re no longer a non-permanent resident, as a rule all of your income is subject to Japanese income tax, whether it arises at home or abroad.
Assets need attention too. If you’re a resident other than a non-permanent resident and hold more than ¥50 million in overseas assets as of December 31, you generally have to file an “overseas assets report” by June 30 of the following year. High earners may also be subject to a separate “assets and liabilities report,” on top of the overseas assets report. If your income or total assets are large, check with a tax accountant before year-end.
Source: National Tax Agency, “Overseas Assets Report (No. 7456)” / National Tax Agency, “Assets and Liabilities Report (No. 7457)”
For most salaried workers, once your employer completes your year-end adjustment, your income tax is settled and you don’t need to file. That said, if your annual salary exceeds ¥20 million, you fall outside the year-end adjustment and generally do need to file.
Simply having joined a Japanese company partway through the year doesn’t, on its own, mean you have to file. People who start a job mid-year and stay employed through year-end are, as a rule, still covered by the year-end adjustment.
If you also received salary from another Japanese employer in the same year, though, the basic approach is to check the salary and withheld tax on your previous job’s withholding slip, and have your current employer combine both in your year-end adjustment.
Salary you received from a foreign employer before coming to Japan isn’t treated the same as a withholding slip from a previous Japanese job. How it’s taxed depends on when you became a Japanese resident, where you actually worked, and similar factors.
There’s also this: if you receive salary from one place, all of it is subject to withholding, and your income other than salary and retirement income exceeds ¥200,000, then as a rule you need to file. If you receive salary from two or more places, the test works differently.
And if overseas dividends, real estate income, or business income become taxable in Japan, you may need to file as well. Whether a return is required when overseas income is involved is highly case-specific, so if you’re unsure, consult a tax accountant.
Chapter5: Can You Use Furusato Nozei in Your First Year?
Even in your first year in Japan, you can use furusato nozei for the donation deduction—as long as you meet the tax conditions.
Your deductible amount, though, depends on that year’s income and deductions, and on next year’s residence tax. If you arrived in the second half of the year, your annual income is lower, so your deduction limit may be lower than in a full year of work.
Donate beyond that rough limit, and it’s not that “everything over the line is lost”—but your out-of-pocket cost can end up higher than the usual ¥2,000.
If you file a tax return, the deduction comes off your income tax and the next year’s residence tax. If you use the One-Stop Exception instead, the income-tax portion is also folded into the next year’s residence tax. And since filing a return voids the One-Stop Exception, you’ll need to include your donations on that return.
One more thing, specific to newcomers: if you leave Japan before January 1 of the year after you donate, no residence tax is charged for the next year—so you may not get the residence-tax deduction you were counting on. If you’re planning to head home, check your address and tax situation before you donate.
Chapter6: If You Might Leave Japan Again
If there’s a chance you’ll leave Japan, keep one date in mind: January 1.
If you have an address in a Japanese municipality as of January 1, and your previous year’s income was above a certain level, your obligation to pay that year’s residence tax generally remains—even if you move overseas afterward.
The January-to-May window deserves particular care. Even if you’ve paid all of the current year’s residence tax by the time you leave, having an address in Japan on January 1 can mean a new year’s residence tax is charged from that June.
If you can’t receive tax notices from abroad, you may need to appoint a tax representative. Check the specific procedure with your local municipality.
Whether you’ve met public obligations like taxes and social insurance premiums is, at the very least, a point that’s checked in residency reviews such as permanent residence applications. If you have unpaid amounts, don’t leave them—confirm your payment status before you leave.
On pensions: if you don’t hold Japanese nationality and meet certain conditions when you leave Japan, you can claim a lump-sum withdrawal within two years of the day you no longer have an address in Japan. As of August 2026, the enrollment period used to calculate the lump-sum withdrawal is capped at 60 months—that is, five years.
Related Post
Chapter7: First Year Taxes in Japan: Frequently Asked Questions
Here are the questions foreign professionals most often have about first year taxes in Japan, with quick answers to each.
Q. Do you pay residence tax in your first year in Japan?
If you had no Japanese income the year before, you generally owe little to no residence tax in your first year in Japan. Billing starts in June of your second year, and the amount—calculated on the previous year’s income—is deducted from your salary in 12 installments. Since your first-year take-home pay looks bigger than it really is, it’s reassuring to start setting money aside early for the second-year burden.
Q. Is my overseas income taxed in Japan?
The answer depends on your residency classification. While you’re a non-permanent resident, what’s taxed is limited to income other than foreign-source income, plus anything paid within Japan or remitted from abroad. Once your stay within the past 10 years exceeds five years, you become a resident other than a non-permanent resident, and your worldwide income comes into scope. Because judgments involving remittances and overseas assets get complex, check your specific situation with a tax accountant.
Q. Do I need to file a tax return in my first year?
For many company employees, the year-end adjustment settles everything. But if your salary income exceeds ¥20 million, you fall outside it and need to file. You may also need to file if you joined mid-year, receive salary from more than one employer, have non-salary income over ¥200,000, or have foreign-source income. When you’re at the point of being unsure, it’s best to consult a professional.
Chapter8: Summary
Even if residence tax isn’t coming out of your salary, first year taxes in Japan don’t mean the burden has disappeared. If you had no address in Japan as of January 1 of that year, residence tax usually starts around June of the following year, based on the income you earned in the year you arrived.
If you hold income or assets overseas, whether you count as a non-permanent resident under income tax law matters too. That’s judged not by “five years from this arrival,” but by the total time you’ve had a domicile or residence in Japan over the past 10 years.
And even as a non-permanent resident, remittances from abroad can bring foreign-source income into the tax net. For salary received in an overseas account or capital gains on foreign securities, too, you can’t determine how it’s taxed from the location of the account alone.
As for filing, most salaried workers are done with the year-end adjustment—but you may need to file if you have salary income over ¥20 million, more than one employer, non-salary income, or overseas income.
Getting your residency classification, overseas income, remittance history, and next year’s residence tax straight during your first year is the first step to avoiding an unexpected tax bill from year two onward.
*This article is provided for general informational purposes only and does not constitute individual financial or legal advice. The figures shown here are based on the sources cited and will vary depending on your income, when you arrived in Japan, and your residency classification for tax purposes. Information is accurate as of August 2026, and note that residence tax rates and pension rules may change with future reforms. Your resident classification, how overseas income and remittances are taxed, and whether you need to file a tax return differ case by case, so please confirm with the National Tax Agency, a certified financial planner, a tax accountant, or another qualified professional before acting on any information in this article.
