Reading your payslip
What is deducted from gross pay, and why resident tax only starts in your second year.
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A Japanese payslip is divided into payments, deductions, and attendance. Your take-home pay is the gross figure in the payments column minus the total of the deductions column. Social insurance is the largest part of the deductions: health insurance, employees' pension, and employment insurance are taken monthly, with health insurance and pension split evenly between you and your employer. Long-term care insurance is added once you turn forty. There are two taxes. Income tax is withheld from each month's pay as an estimate and reconciled in the year-end adjustment. Resident tax is charged on the previous year's income and is usually deducted monthly from June through to May of the following year. This is why nothing is deducted for resident tax in your first year in Japan, and why take-home pay can appear to drop sharply in the second. It is worth knowing in advance rather than discovering it. Keep your payslips. They are asked for as proof of income for tax filing, loan applications, and residence status renewals. If a deduction looks wrong, ask your employer's HR or general affairs team first. Calculation errors do happen, and so does an unclaimed dependant or allowance.