Take-Home Pay in Japan (手取り) Explained — What Gets Deducted from Your Gross Salary
Gross pay ≠ what lands in your bank account
When you get your first Japanese payslip (給与明細), the gap between gross pay (額面, gakumen) and take-home pay (手取り, tedori) often comes as a surprise. Take-home pay is typically about 75–85% of gross, and the rest goes to social insurance premiums and taxes. Once you understand what is deducted and why, decisions about salary negotiation, changing jobs, and tax savings become much easier.
What gets deducted — the deduction items
| Deduction | Nature | How it's paid |
|---|---|---|
| Health insurance (健康保険) | Medical insurance | Split 50/50 with employer |
| Employees' pension (厚生年金) | Public pension | Split 50/50 with employer |
| Employment insurance (雇用保険) | Unemployment benefits etc. | Small employee share |
| Long-term care insurance (介護保険) | Added from age 40 | Split 50/50 with employer |
| Income tax (所得税) | National tax (incl. reconstruction surtax) | Withheld monthly |
| Residence tax (住民税) | Local tax | Based on prior-year income, paid in arrears |
The first four (health, pension, employment, long-term care) are collectively called social insurance premiums. Income tax and residence tax are taxes.
Social insurance — the biggest chunk
- Health insurance and the employees' pension are set according to your salary level (標準報酬月額, standard monthly remuneration), and your employer pays half. What appears on your payslip is only your own share.
- Long-term care insurance (介護保険) is added on top of health insurance from the month you turn 40 — this is why take-home pay dips slightly around your 40th birthday.
- The rates vary by health insurance society, region, and year, so this article deliberately gives no figures. For an estimate based on your own salary, see 👉 the take-home pay calculator.
Income tax and residence tax — different timing
- Income tax is withheld from each monthly paycheck and settled at year-end through the year-end adjustment (年末調整, nenmatsu chōsei). It includes the special reconstruction income tax.
- Residence tax works completely differently — it is charged in arrears the following year, based on your prior-year income. That's why nothing is deducted in your first year in Japan, and it appears on your payslip from year two. For the full mechanism, see 👉 Japan's Residence Tax Explained.
Moments when your take-home pay changes
- Second year at your job — residence tax kicks in and take-home pay drops noticeably
- Turning 40 — long-term care insurance is added
- Bonus months — bonuses are also subject to social insurance premiums and income tax
- Registering dependents — deductions reduce your taxes, so take-home pay goes up (see below)
Point for foreign residents — the overseas dependent deduction
In Japan, family members living abroad can also qualify for the dependent deduction if the requirements are met. For foreign residents this is a deduction with real tax-saving impact, and it's easy to miss when thinking about take-home pay.
- You need relationship documents plus remittance documents, and the remittance is recognized only if you send money to each dependent individually (lump-sum transfers to one representative are not accepted)
- The deduction amount varies by requirements and age bracket (general, specified, elderly dependents)
Detailed requirements and paperwork are covered in 👉 the overseas dependent deduction guide. For differences depending on your insurance (employee social insurance vs National Health Insurance), see 👉 National Health Insurance vs Employee Social Insurance.
Frequently asked questions
Q. What percentage of gross pay is take-home pay?
Roughly 75–85% is typical, but it depends on your salary, age (long-term care insurance), dependents, and the municipality you live in. For your own situation, you can get an estimate with 👉 the take-home pay calculator.
Q. Why did my take-home pay drop in my second year?
Because residence tax is charged in arrears based on prior-year income, the residence tax on your first-year income starts being levied in your second year.
Q. Are deductions taken from bonuses too?
Yes. Bonuses are also subject to social insurance premiums and income tax. Residence tax is collected from your monthly salary instead.
This article is a general guide to the structure of payroll deductions; actual rates and tax amounts vary by insurance plan, municipality, and year. For decisions on your individual taxes and deductions, consult your employer, the tax office, or a professional such as a licensed tax accountant.