Japan income tax rates and brackets
The seven progressive national bands, the reconstruction surtax, and how marginal differs from average.
National income tax has seven progressive brackets from 5% to 45%, applied to taxable income (not gross salary); a 2.1% reconstruction surtax is added, and local resident tax of about 10% is calculated separately.
Effective: 2026-01-01 to 2026-12-31
Professional review pending — treat as draft and confirm with the authorities.
Key points
- Brackets apply to taxable income after deductions, not to gross salary.
- The seven rates are 5, 10, 20, 23, 33, 40, and 45 percent.
- A quick formula: tax = taxable income × rate − bracket adjustment; then add the 2.1% surtax.
- Your marginal rate (on the next yen) is higher than your average rate (over all income).
The progressive brackets
Taxable income is taxed in bands: 5% up to ¥1.95M, 10% to ¥3.3M, 20% to ¥6.95M, 23% to ¥9M, 33% to ¥18M, 40% to ¥40M, and 45% above ¥40M. The NTA’s rate table pairs each rate with a subtraction so you can compute the tax in one line. For ¥7,000,000 of taxable income: ¥7,000,000 × 23% − ¥636,000 = ¥974,000 of national income tax before the surtax and credits.
Surtax, resident tax, and marginal rate
On top of the calculated national tax, add a reconstruction surtax of 2.1% (about ¥20,454 on ¥974,000). Local resident tax of roughly 10% is calculated separately under municipal rules. Because only income within a band is taxed at that band’s rate, a raise does not retroactively re-tax your earlier income — the higher rate applies only to the portion above each threshold. This is why marginal and average rates differ, and why a deduction saves roughly your marginal rate times the deduction.
Who this is for
- Anyone estimating their tax
- People weighing a raise, bonus, or deduction
What this is not
- Separate-taxation assets like listed shares (different flat rates)
- These are aggregate-income rates; capital gains, listed dividends, and retirement income use separate systems. Reforms can change thresholds — verify the current-year table.
Frequently asked questions
Do I need to file a tax return in Japan?
Many employees do not, because tax is settled by year-end adjustment (年末調整). You generally must file (確定申告) if you have side income over ¥200,000, two or more employers, self-employment income, sizeable investment or crypto gains, or you want to claim deductions like large medical costs or a first-year mortgage credit. Filing season is Feb 16 – Mar 15 via e-Tax. When unsure, check the NTA guidance or ask a 税理士.