What is Resident Tax (住民税)?

Resident tax is one of Japan's local taxes, imposed on residents by prefectural and municipal governments.

Resident tax is used as a fund for local public services, such as road maintenance, education, welfare, and waste collection.

Types of Resident Tax

• Prefectural Resident Tax (都道府県民税): imposed by the prefecture
• Municipal Resident Tax (市区町村民税): imposed by the city, ward, town, or village

How Resident Tax is Calculated

Resident tax is levied based on your previous year's income and consists of two components: per capita levy (均等割) and income levy (所得割).

1. Per Capita Levy (均等割)

A fixed amount is charged regardless of income. For example, the standard combined rate is 5,000 yen, typically 1,500 yen for prefectural tax and 3,500 yen for municipal tax.

2. Income Levy (所得割)

This is levied based on the previous year's income. The general calculation formula is:

Taxable income × 10% (4% prefectural, 6% municipal)

For example, if your taxable income is 3 million yen, the income levy is approximately 300,000 yen.

Methods of Paying Resident Tax

• Special Collection (特別徴収): For company employees, it is automatically deducted from your salary.
• Ordinary Collection (普通徴収): For the self-employed or freelancers, you pay it yourself (4 times a year).

Penalties for Non-Payment

If you fail to pay by the due date, a late payment fee will be charged, and in the worst case, property seizure may occur.

Important Points about Resident Tax

Resident tax is based on the previous year's income, so if your income increases, your tax also increases. Especially for freelancers or those with side jobs, filing an income tax return can lead to higher resident tax the following year.