Housing Allowance vs Company Housing in Japan

Last updated: 19 October 2026 · the National Tax Agency’s and the Japan Pension Service’s pages · figures for the 2026 tax year

In Japan a housing allowance (住宅手当) paid in cash is salary: it is taxed and carries social insurance like the rest of your pay. Company housing (社宅), including a flat the company leases and lets to you, is not taxed at all if you pay the company at least 50% of its rent value (賃貸料相当額), a figure the National Tax Agency’s rules set far below the market rent. On ¥400,000 a month, an allowance of ¥110,000 adds ¥994,848 a year to take-home, not ¥1,320,000. To see your own salary with an allowance, use the take-home calculator.

This is a general explanation for an employee (not a director) in Japan. How your employer sets up housing, and what its payroll treats as taxable, is for them and the tax office to settle.

A housing allowance is pay

The National Tax Agency is explicit that a housing allowance paid in cash, and rent the company pays on a lease you signed yourself, are not company housing but salary. So every yen of it goes through income tax, resident tax and social insurance. In Tokyo, under 40 and single, ¥110,000 a month on top of ¥400,000:

Company housing: the rent value

When the company provides the home, whether it owns it or leases it from a landlord, the taxable benefit is measured against a monthly rent value (賃貸料相当額) worked out from the fixed asset tax assessments, not from the rent anybody pays. For an employee it is the total of:

• the building’s fixed asset tax assessment (固定資産税の課税標準額) for the year × 0.2%;
• ¥12 × the floor area in square metres ÷ 3.3;
• the land’s fixed asset tax assessment for the year × 0.22%.

Then:

• You pay at least 50% of the rent value: nothing is taxed.
• You pay less than 50%: the difference between what you pay and the full rent value is taxed as salary.
• You pay nothing: the whole rent value is taxed as salary.

Take a 33 m² flat whose building is assessed at ¥5,000,000 and its share of the land at ¥4,000,000. The rent value is ¥10,000 + ¥120 + ¥8,800 = ¥18,920 a month. If the company leases it for ¥110,000 and you pay it ¥9,460 a month or more, none of the ¥110,000 is taxed. Pay ¥5,000 instead and ¥13,920 a month is taxed as salary — not the ¥105,000 the company is really paying for you.

The figures for a director (役員) are different and higher; the National Tax Agency gives them separately.

Social insurance sees it differently

Health insurance and pension do count company housing as pay, at a value the Ministry of Health, Labour and Welfare sets for each prefecture by floor area, less the rent you pay; if your rent is at least that value, nothing counts. That value is usually far below the market rent too, so company housing is still worth more than the same money in cash, but not free of every deduction.

What to ask

• Is it a cash allowance, or company housing that the company leases and lets to you?
• For company housing, what is the rent you pay, and is it at least half of the rent value?
• Does the company cap the rent or the area, and what happens to the lease if you leave?

Comparing offers more broadly — bonuses, commuting, overtime — is in negotiating a salary in Japan.

Questions people ask

Is a housing allowance taxed in Japan?

Yes. A housing allowance paid in cash, or rent the company pays on a lease in your own name, is salary: income tax, resident tax and social insurance all apply to it.

How do I find the rent value of my company flat?

Ask payroll. It is worked out from the fixed asset tax assessments of the building and the land and from the floor area, which the employer has to get from the owner when it leases the flat, so most employees never see the figures.

Is company housing free of social insurance too?

No. For social insurance it counts as pay at a value set for each prefecture by floor area, less the rent you pay, and only if your rent is below that value.

Sources

• National Tax Agency — No.2597 使用人に社宅や寮などを貸したとき (the rent value and its three parts, the same for a leased flat; 50% or more is not taxed; below that the difference is; a cash allowance or a lease in your own name is salary; the worked example). Japanese, opened 19 October 2026.
• National Tax Agency — No.2600 役員に社宅などを貸したとき (directors). Japanese.
• Japan Pension Service — 全国現物給与価額一覧表（厚生労働大臣が定める現物給与の価額） (company housing counts for social insurance at the prefecture’s value less the rent paid). Japanese, opened 19 October 2026.
• Japan Pension Service — 標準報酬月額・標準賞与額とは？ (a housing allowance is part of the pay social insurance is charged on). Japanese.

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