The Residence-Tax Year-Two Surprise

The Japan residence tax surprise hits new arrivals around June of their second year, when the first bill arrives for income they already earned and spent.¹ Your pay did not change and your employer made no error; the local tax cycle simply caught up with last year's income.

Confirm current details with official sources

Procedures, fees, and requirements can change. Confirm current details at the Ministry of Internal Affairs and Communications site and your municipal tax office. This article is general information, not legal, tax, or immigration advice; for your specific case, consult a licensed tax accountant (zeirishi, 税理士).

Overview

The 住民税 (jūminzei, "residence tax") is the local inhabitant tax that funds municipal and prefectural services.²¹ It is charged on the previous calendar year's income and billed starting the following June, so a newcomer who arrives mid-year pays nothing in year one and meets the bill in year two.¹³

This article explains the cycle, the typical size of the bill, the two ways it reaches you, and the year-one saving habit that keeps year two painless.

Why year two feels like a pay cut

Income tax is withheld from each paycheck during the year you earn the money. Residence tax works the other way: it is calculated after the year ends, using the previous calendar year's income, and the bill starts later, commonly around June.⁴⁵

That delay is the whole surprise. First-year take-home pay looks like normal life in Japan, then the residence-tax cycle catches up and monthly pay drops with no change at work.⁵

Year-one payslips carry no residence-tax deduction, because no residence tax arises for a year in which you had no January 1 residence in Japan.⁶ Comparing your year-one net pay with a longer-tenured colleague's net pay misleads, because the colleague's payslip already carries a monthly residence-tax deduction.

Income year N is billed from June year N+1

Income earned from January 1 to December 31 of year N becomes the base for the bill that starts around June of year N+1.²¹ Municipalities send the tax notification at the beginning of June each year (as of 2026-04).¹

The pattern below shows how three calendar years of arrival, work, and billing line up.

The January 1 residency rule

Residence tax for a given year is levied by the municipality where you had a registered domicile as of January 1 of that year, a date the national system calls the 賦課期日 (fuka kijitsu, "assessment date").²⁴ If you had no registered address in Japan on January 1, you owe no residence tax for that year.⁶

People resident on January 1 must declare the prior year's income status by March 15 each year, unless they filed a final income-tax return or their employer submitted a salary payment report (as of 2026-04).¹ A mid-year arrival therefore has no filing or bill in year one, and the first assessment arrives the following June.¹⁶

How large the year-two bill typically is

The income-based portion, or 所得割 (shotoku-wari, "income-based portion"), uses a standard rate of 10 percent of taxable income: 4 percent prefectural plus 6 percent municipal (as of 2026-09; confirm current figures with the Ministry of Internal Affairs and Communications).²⁴ In designated major cities the same 10 percent splits as 2 percent prefectural plus 8 percent municipal.²

The per-capita portion, or 均等割 (kintō-wari, "per-capita flat portion"), adds a standard base of ¥4,000 per year, split as ¥1,000 prefectural plus ¥3,000 municipal (as of 2026-09).²⁴ Since fiscal 2024, a national 森林環境税 (shinrin kankyō zei, "Forest Environment Tax") of ¥1,000 per year is collected together with the residence-tax billing (as of 2026-09).²⁴

The figures below are the standard national defaults current at the time of writing; individual municipalities may set slightly different rates.

Item	Amount	As of	Notes
Income-based portion, standard	10% of taxable income (4% prefectural + 6% municipal)	2026-092	Applies to taxable income after deductions, not gross pay
Per-capita portion, standard base	¥4,000/year (¥1,000 + ¥3,000)	2026-092	Flat amount per person
Forest Environment Tax	¥1,000/year	2026-092	National surcharge collected with residence tax since FY2024

The 5 to 8 percent planning band

A full working year of income typically produces a residence-tax bill of roughly 5 to 8 percent of prior-year gross income (as of 2026-09).²⁴ The 10 percent statutory rate applies to taxable income after the employment-income, basic, and social-insurance deductions, not to gross pay, which is why the bill lands below 10 percent of salary (limitation: planning band derived from the rate structure, not a published government figure).²⁴

One deduction detail matters for planning. A practitioner worked example applies a residence-tax basic deduction of ¥430,000 when computing taxable income (as of 2026-03; limitation: practitioner source, confirm with your municipal tax office).⁵

Why a mid-year arrival pays a partial bill first

A mid-year arrival's year-two bill covers only post-arrival months of year-one income, so it is smaller than a full-year bill, and the first full-year bill lands in year three.¹⁵ Someone arriving in October with three months of salary gets a modest June bill, then the full bill the next June.

Very low prior-year income can fall below the local exemption threshold, in which case part or all of residence tax is not levied (as of 2026-03).³⁵ The threshold depends on family status and municipality; one practitioner guide cites roughly ¥450,000 of total income for a single person with no dependents, so treat that number as a rough marker and confirm with your ward office.⁵

How the bill reaches you

The municipality calculates the annual tax in both routes below. The difference is who handles the payment: your employer, or you directly.

Special collection through your employer

Salaried employees normally pay by 特別徴収 (tokubetsu chōshū, "special collection, employer payroll deduction").² The municipality calculates the annual tax and notifies the employer, which deducts it from salary in 12 monthly installments from June through May of the following year.²⁵

The employer receives the tax notice directly from the municipality, so the employee takes no action.⁵⁷ The new deduction line appears on the June payslip, which is the moment most newcomers first notice the tax.

Ordinary collection by payment slip

People outside employer payroll, including freelancers, self-employed workers, the unemployed, and employees between jobs, pay by 普通徴収 (futsū chōshū, "ordinary collection, direct taxpayer payment").²⁷ The municipality sends payment slips to the taxpayer, who pays directly (as of 2026-03; confirm current details with your municipal tax office).⁵

Ordinary collection is paid in four installments with typical due dates at the end of June, August, October, and January.⁵⁷ Payment channels include financial-institution counters, convenience stores, direct debit, and internet or smartphone payment depending on the municipality (as of 2026-04).¹

Unpaid slips escalate beyond reminders

Delayed payment triggers reminders and delinquency charges, and continued non-payment can lead to seizure of assets such as salary or savings (as of 2026-04).¹ If a slip cannot be paid by the deadline, consult the ward tax office before the due date passes.

Arrears and permanent residency screening

An unpaid year-two bill also has immigration consequences. Permanent residence screening requires proper performance of public duties, including tax payment, and even tax paid late is in principle evaluated negatively (as of 2026-02; confirm current details with the Immigration Services Agency).⁸

The Financial and Tax Criteria for Permanent Residency explains how examiners read that record. A missed June slip is not only a budgeting problem; it becomes part of your tax record for any future application.

A budgeting strategy for year one

The fix is deliberately boring: treat part of year-one take-home pay as already spent. Setting aside roughly 10 percent of post-arrival year-one income across year one covers the year-two bill with margin above the typical 5 to 8 percent planning band.² The margin absorbs the per-capita levy, the Forest Environment Tax, and deduction variation between households.

Hold the reserve where you will not spend it

Move the monthly reserve into a separate ordinary savings account on payday, the same way payroll deduction will later remove it automatically. An automatic monthly transfer labeled for next June takes willpower out of the habit; stop it only once payroll deduction visibly appears on your payslip.

Setting aside the reserve month by month

A monthly habit beats a spring scramble. Someone earning ¥300,000 a month from an October arrival sets aside about ¥30,000 each month, building roughly ¥90,000 by December plus the full monthly amounts through the following May.²

Freelancers and others on ordinary collection need the reserve as cash, since four lump slips arrive instead of twelve small deductions.²⁵ Employees whose firms start payroll deduction still benefit, because the reserve smooths the June drop in take-home pay either way.

What changes again in year three

When year two was the first full income year, the year-three bill (based on full year-two income) is larger than the partial year-two bill, and the same retrospective pattern then repeats annually.¹⁵ Treating the small first bill as the normal level leaves year three underfunded, so budget the reserve through year two as well if year-two income exceeds year-one income.

Once the cycle starts, keep the annual paperwork. At visa renewal, immigration may ask for a 課税証明書 (kazei shōmeisho, "tax assessment certificate") and a 納税証明書 (nōzei shōmeisho, "tax payment certificate"), which show your income, the tax levied, and the tax paid.⁷

Good to know

Moving municipalities does not move that year's bill

The January 1 municipality owns the whole year's assessment, so an April move still means paying the former city for that year.¹³ Confirm any move-year notice against the January 1 address before assuming it was sent to the wrong city.

Quitting or changing jobs does not cancel the balance

The remaining payroll-deduction balance does not disappear when deduction stops; after resignation it switches to ordinary collection by payment slip, unless the employer deducts the unpaid balance in one lump sum from the final salary.⁶⁷ Months-later slips surprise people who assumed the old employer settled it. Ask the new employer about picking up payroll deduction, or expect slips at the registered address.

Leaving Japan before the June notice does not erase the assessment

Liability attaches on January 1, so departing after that date leaves the year's bill payable through a tax representative or a lump-sum settlement.⁷ Departure timing is covered in Leaving Japan: The Final-Year Juminzei Trap.

See also

• Tenshoku Procedure: The Job-Change Sequence
• Final Pay and Documents on Exit in Japan
• Multiple-Account Strategy for Foreign Residents
• Final-Year Tax Filing and the Nozei Kanrinin

References

Footnotes

1. City of Yokohama. "Municipal tax (市税)" (English). Last updated 2026-04-10. https://www.city.yokohama.lg.jp/lang/residents/en/taxes/shizeienglish.html ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸ ↩⁹ ↩¹⁰ ↩¹¹ ↩¹²

2. 総務省 (Ministry of Internal Affairs and Communications). 「個人住民税」 (individual inhabitant tax explainer). https://www.soumu.go.jp/main_sosiki/jichi_zeisei/czaisei/czaisei_seido/150790_06.html ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸ ↩⁹ ↩¹⁰ ↩¹¹ ↩¹² ↩¹³ ↩¹⁴ ↩¹⁵ ↩¹⁶ ↩¹⁷ ↩¹⁸

3. Shinjuku City. "Resident's Tax" (Foreign Language Top Page, English). https://www.foreign.city.shinjuku.lg.jp/en/kurashi/jyuminzei/ ↩ ↩² ↩³

4. Japan External Trade Organization (JETRO). "3.7 Overview of individual tax system," Section 3. Taxes in Japan. https://www.jetro.go.jp/en/invest/setting_up/section3/page7.html ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷

5. TaxMatch Japan (e-zeirishi.com). "Residence Tax in Japan for Foreigners: Complete Guide (2026)." Updated 2026-03-25. https://e-zeirishi.com/en/residence-tax-japan-foreigners-guide/ ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸ ↩⁹ ↩¹⁰ ↩¹¹ ↩¹²

6. TOMA Consultants Group. Japanese Residents' Tax (rate, schedule, ordinary and special collection; no January 1 residence means no liability). https://toma.co.jp/en/blog/jtg/japanese-residents-tax ↩ ↩² ↩³ ↩⁴

7. City of Ashiya. Taxes: A guide for foreign residents (PDF; domicile as of January 1; special and ordinary collection; lump-sum settlement on resignation or departure; visa tax certificates). https://www.city.ashiya.lg.jp/kokusai/spanish/documents/taxes.pdf ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶

8. Immigration Services Agency. Guidelines concerning permission for permanent residence (revised 2026-02-24). 2026. https://www.moj.go.jp/isa/applications/resources/nyukan_nyukan50.html ↩