Japan Payroll Calculator

For a single employee in Tokyo, in an office / IT industry, with no dependents and not yet 40 years old, ¥500,000 monthly gross typically becomes around ¥385,000-¥395,000 net take-home. The exact figure depends on the prefecture (which sets the health insurance rate), the industry (which sets workers’ comp), the number of declared dependents, and whether long-term care insurance applies. Use the calculator above to get the precise number for your situation.

No. Workers’ compensation (労災保険) rates in Japan range from about 0.25% (office work, IT, consulting) up to 9.5% (general construction). The MHLW publishes a table with about 50 industry classifications. The premium is paid entirely by the employer; employees never see it deducted from payslips. The calculator’s Industry select uses standard rates for the most common categories.

Long-term care insurance (介護保険) is added as an extra premium starting the month the employee turns 40, and it stops automatically the month they turn 65. The current FY2025 rate is about 1.59% on top of standard remuneration, split 50/50 between employee and employer. After age 65, employees pay long-term care premiums directly to their municipality instead of through payroll.

No. The calculator’s gross salary field expects the monthly base salary plus any fixed monthly allowances (commuting, position, etc.). Bonuses are taxed and contributed to social insurance under a separate calculation each time they are paid, using a different formula. If you also want to estimate annualised cost including bonuses, multiply the calculator’s monthly result by twelve and add a separate bonus calculation.

Kyokai Kenpo, which covers most SMB employees, sets a slightly different health insurance rate per prefecture each fiscal year, based on the medical expenses of insured residents in that prefecture. As of FY2025 the spread is roughly 9.31% (Niigata, lowest) to 10.78% (Saga, highest). Tokyo sits at 9.91%, Osaka at 10.34%. The rate is split 50/50 between employee and employer.

Within a few hundred yen for typical cases. The calculator uses the actual standard remuneration grade table for health and pension, the FY2025 Kyokai Kenpo rates for the chosen prefecture, MHLW’s FY2025 employment insurance rates, and the National Tax Agency’s monthly withholding formula (甲欄). Differences can come from rounding rules at the payroll software level, non-standard commuting allowances, mid-year standard remuneration revisions, and the employee’s exact dependent declaration.

Health insurance and welfare pension premiums in Japan are not calculated on the actual salary directly. The salary is mapped to a standard remuneration grade (標準報酬月額), and the premium is calculated on that grade. Health insurance has 50 grades from ¥58,000 to ¥1,390,000; welfare pension has 32 grades capped at ¥650,000. The grade is normally fixed each September based on April-June average pay and only revised mid-year if pay changes by more than two grades for three consecutive months.

Resident tax (住民税) is based on the prior year’s income, so an employee in their first year in Japan usually pays no resident tax through payroll for that first year. The municipality issues a notice to the employer in May or June each year specifying the exact monthly amount for the upcoming twelve months. The calculator’s auto-estimated resident tax assumes a steady-state employee whose current salary is similar to last year. For a brand-new hire from overseas, leave the resident tax field at 0 for year one, then enter the actual notified amount from year two.

At age 65, long-term care insurance stops being deducted from payroll (the employee pays the municipality directly). Welfare pension contributions continue if the employee keeps working, until age 70. Health insurance also continues. After age 70, eligible employees move to the late-elderly health insurance system (後期高齢者医療制度) at age 75. The calculator handles the age 40-64 toggle; for older employees, uncheck it.