How to read your payslip when working in Japan with a Japanese employer
*This article was originally published on the website of Posse Nippon, the publisher of Small Business Japan, prior to the launch of Small Business Japan (October 2024). Articles published before September 2024 have been edited and transferred to this site.*
A payment slip contains essential information about your social insurance. If you are a non-Japanese national working in Japan, it can sometimes be challenging to read and understand it because of the language and particular terms. Even some Japanese natives (myself included, in my younger years) find these documents unclear. Perhaps the HR department explained this already, but I might not have been paying close enough attention then.
This guide will explain how to read a Japanese payslip. We'll focus on understanding social insurance deductions, which comprise a significant portion of your overall deductions.
Here’s a sample of a payslip* with a salary of ¥290,000, which is (1) '基本給' (Kihonkyu)
*This is just a simplified version for ease of understanding, and the deduction and tax vary depending on where you live and how much you earn.
The left column (A), ‘支給 (Shikyu)’, shows the total payment you receive before deduction. This section may also include travel expenses, overtime pay, and any stipends. The right column (B) is a deduction called ‘控除 (Koujo)’, consisting of social insurance (2~4) and tax (5 and 6). Therefore, your net salary (the amount you receive after deductions) is calculated as follows: (A) - (B) = ¥221,740.
More specifically, they are:
(2) Health insurance premium (健康保険料, Kenko Hoken-ryo)
(3) Employees’ pension insurance (厚生年金保険料, Kosei Nenkin Hoken-ryo)
(4) Employment Insurance (雇用保険料, Koyou Hoken-ryo)
(5) Income tax (所得税, Shotoku-zei）
(6) Resident tax (住民税, Jumin-zei）
As mentioned earlier, tax amounts can vary. For a detailed explanation of social insurance, please refer to my other posts on this topic. Your employer withholds these deductions (social insurance and tax) and pays them to the government on your behalf.
In Japanese, we call those deductions ‘天引き (tenbiki)’ as a colloquial expression. Thanks to this tenbiki system, we do not have to be bothered to pay taxes every month by ourselves, helping us forget how much taxes we regularly pay.
It's possible that this system contributes to a lower awareness of tax burdens among some Japanese employees. However, my experience outside Japan is limited, so this observation may not be universally applicable. I'm curious to hear about how this is handled in other countries.
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Disclaimer: This information is accurate as of the published date. Please note that this information is subject to change due to potential rule updates etc.
