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Income tax in Japan 2026
The national scale runs 5% to 45% (above JPY 40 million), the 2.1% reconstruction surtax rides on the national bill through 2037, and the local inhabitant tax adds a flat 10% — roughly 56% at the top.
The 2026 reform meaningfully cut taxes for ordinary earners: the basic deduction rose to JPY 620,000, with add-ons taking it to JPY 1.04 million for incomes up to about JPY 4.89 million in 2026–27.
At a glance
- top rate
- 45% national + surtax + 10% inhabitant ≈ 55.95%
- entry band
- 5% national on the first JPY 1.95 million
- tax year basis
- Calendar year (inhabitant tax billed on the prior year's income)
- filing deadline
- 16 February – 15 March; salary earners under JPY 20 million usually settled via year-end adjustment
- residency basis
- Permanent residents: worldwide; non-permanent residents (foreigners under 5 of 10 years): Japan-source plus remitted foreign income
- regime flag
- Ultra-rich minimum tax: 30% above JPY 165 million, enacted by the 2026 reform but applying from tax year 2027
Rates
National income tax scale (2026)
| Taxable income (JPY) | Marginal rate | Note |
|---|---|---|
| 0 – 1,950,000 | 5% | Add 2.1% surtax on the tax, plus 10% inhabitant tax on income |
| 1,950,000 – 3,300,000 | 10% | |
| 3,300,000 – 6,950,000 | 20% | |
| 6,950,000 – 9,000,000 | 23% | |
| 9,000,000 – 18,000,000 | 33% | |
| 18,000,000 – 40,000,000 | 40% | |
| Over 40,000,000 | 45% | ≈55.95% all-in with surtax and inhabitant tax |
Marginal rates apply within each band.
Salary deduction (2026)
| Gross salary (JPY) | Deduction | Note |
|---|---|---|
| Up to 2,200,000 (2026–27) | JPY 690,000 (740,000 special for 2026–27) | Raised by the 2026 reform |
| 1,900,001 – 3,600,000 | 30% of salary + 80,000 | |
| 3,600,001 – 6,600,000 | 20% of salary + 440,000 | |
| 6,600,001 – 8,500,000 | 10% of salary + 1,100,000 | |
| Over 8,500,000 | Capped at 1,950,000 | Higher cap (JPY 2.1m salary basis) with under-23 dependants |
Thresholds & allowances
- Basic deductionJPY 620,000 (2026)
Plus JPY 370,000 for low earners and a JPY 50,000 special 2026–27 add-on — up to JPY 1.04 million; phased to zero above JPY 25 million (inhabitant-tax version: JPY 430,000)
- Spouse allowanceJPY 380,000
Spouse income up to JPY 580,000 (salary ~1.23m); phases out as your income passes JPY 9–10 million
- DependantsJPY 380,000 – 630,000
JPY 630,000 for ages 19–22; dependant income threshold raised to JPY 850,000 from 2025
- Social insurance premiumsFully deductible
Japanese social security contributions deduct without limit; foreign schemes generally don't
- Hometown donation programmeDonations less JPY 2,000
The furusato nozei credit effectively redirects inhabitant tax to chosen localities, within income-based caps
- Medical expensesAbove JPY 100,000
Deduction up to JPY 2 million for costs over the threshold (or the over-the-counter drug alternative up to JPY 88,000)
Surcharges
- Special reconstruction income tax2.1% of the national taxover All national income tax through 2037
Residency
Residency trigger
A domicile or a year's residence makes you resident; foreign nationals resident 5 years or less in the past 10 are 'non-permanent' — taxed on Japan-source income plus foreign income paid in or remitted to Japan — while everyone else is taxed worldwide.
Non-resident treatment
Non-residents pay a flat 20.42% on gross Japanese employment and professional income (payroll-withheld when paid in Japan), with real estate income taxed net at progressive rates; departing residents with JPY 100 million+ in securities face the exit tax on unrealized gains.
Notes
- Employees earning up to JPY 20 million rarely file — the employer's year-end adjustment finalizes the tax.
- The inhabitant tax bills this year's income next year at a flat 10% plus about JPY 5,000 per head — leavers must budget for the lag.
- Retirement allowances get 50% inclusion after long-service deductions (curtailed for short-service directors).
- Business tax of 3–5% applies to certain self-employment income above JPY 2.9 million (prefectural).
- Blue-return filers gain loss carryforward (3 years), a 1-year carryback and family-wage deductions.
- The ultra-rich minimum tax tops up liability to 30% of income above JPY 165 million from tax year 2027 under the 2026 reform (until then: 22.5% above JPY 330 million).
FAQ
What is Japan's top income tax rate?
About 55.95% — the 45% national rate (above JPY 40 million) times the 1.021 reconstruction surtax, plus the flat 10% inhabitant tax.
How are foreigners taxed in their first years?
As non-permanent residents (under 5 of the past 10 years resident): only Japan-source income plus foreign income paid into or remitted to Japan is taxed — offshore investment income kept offshore stays out.
What changed for 2026?
The basic deduction rose to JPY 620,000 — up to JPY 1.04 million with the low-income and special 2026–27 add-ons — and the minimum salary deduction reached JPY 740,000, cutting tax for ordinary earners.
When do I file?
Between 16 February and 15 March for the prior calendar year; most employees are settled through the employer's year-end adjustment instead.
Figures: tax year 2026, compiled from public sources. Not tax advice.