Salary Negotiation in Japan: Gross vs Take-Home

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

A salary offer in Japan is quoted gross (額面, gakumen), and the take-home (手取り, tedori) is noticeably less: ¥6,000,000 a year, paid in twelve equal months in Tokyo, leaves ¥4,662,100 once social insurance, income tax and resident tax are off — 77.7% of the offer. Two offers with the same headline can also differ, depending on how the bonus is paid and whether commuting and housing come on top. Ask the questions below, then put each offer into the take-home calculator.

This is a general explanation for somebody employed full-time in Japan. It is not advice on what to accept; the contract and your employer’s payroll are the authority on your own pay.

Where a gross salary goes

For an employee in Tokyo, under 40, single, in a full year (resident tax included), paid ¥6,000,000 in twelve equal months:

The insurance lines grow with pay until their caps, and the taxes are progressive, so the share you keep falls as the salary rises — the income tax brackets explain why.

What to ask before you compare

Is the figure twelve months, or does it include bonuses?

An annual figure (年収, nenshū) usually includes bonuses (賞与, shōyo), and many employers pay part of the year that way. The same ¥6,000,000 in two shapes:

Over the year the two are within ¥7,014 of each other. The difference is in timing and in certainty: the second pays a quarter less every month, and the bonus part is only as firm as the contract makes it. Ask how many months of bonus the figure assumes, and whether they are fixed or depend on results.

Is commuting paid on top?

A commuting allowance (通勤手当, tsūkin teate) is usually separate from the salary. By train or bus it is income-tax free up to ¥150,000 a month, but it still counts as pay for social insurance, which the Japan Pension Service lists by name. So ¥20,000 a month on top of ¥6,000,000 adds ¥198,216 a year to take-home, not ¥240,000: the premiums rise with it.

Is housing an allowance or company housing?

• A housing allowance in cash (住宅手当, jūtaku teate) is taxed like salary and counts for social insurance. The same ¥20,000 a month paid this way adds ¥159,416 a year to take-home.
• Company housing (社宅, shataku), including a flat the company rents for you, is not taxed if you pay the company at least 50% of the rent value the National Tax Agency’s rules set (賃貸料相当額). Social insurance works differently: the value set for your prefecture and the size of the home, less the rent you pay, counts as pay for the premiums, and nothing counts if your rent is at least that value.

The same yen can be worth different amounts in the two forms, so if an offer mentions housing, ask which it is and what you would pay.

How much overtime is already in it?

Some offers include a fixed overtime payment (固定残業代, kotei zangyōdai) covering a set number of hours. Ask how many hours, and how much of the figure it is, so that you compare base pay with base pay.

Comparing two offers in the calculator

1. Put in the monthly salary, not the annual figure, and the bonuses as the employer described them.
2. Add the commuting allowance in its own field. Add a housing allowance to the salary, because it is taxed like salary.
3. Set your age, prefecture and family. Each changes the answer: the long-term care premium starts at 40, health insurance rates differ by prefecture, and a dependent spouse lowers the tax.
4. Read the take-home for a full year, not your first year in Japan. Resident tax is charged on the previous year’s income, so the first year in Japan has little or none of it — why your first payslips have no resident tax.

Questions people ask

Is a Japanese salary offer before or after tax?

Before. Both the annual figure (年収, nenshū) and the monthly one (月給, gekkyū) are gross (額面, gakumen). Social insurance, income tax and resident tax all come off it.

Should I negotiate in gross or in take-home?

In gross, because that is what the employer controls and writes into the contract. Take-home depends on your age, your family, where you live and how long you have been in Japan, so work it out yourself for each offer.

Why is my take-home higher in my first year?

Because resident tax is charged by the city you live in on 1 January, on the previous calendar year’s income. Somebody who arrives during a year pays none in that year, and the bill starts the following June, on the months they worked. Compare offers on a full year’s figures, not the first year’s.

Sources

• National Tax Agency — No.2582 電車・バスだけを利用して通勤している場合 (the commuting allowance is tax free up to ¥150,000 a month). Japanese, opened 19 October 2026.
• National Tax Agency — No.2597 使用人に社宅や寮などを貸したとき (company housing is not taxed if the employee pays at least 50% of the rent value; a cash housing allowance is taxed as salary). Japanese, opened 19 October 2026.
• Japan Pension Service — 標準報酬月額・標準賞与額とは？ (the pay social insurance is charged on includes the commuting allowance, the housing allowance and housing provided in kind). Japanese, opened 19 October 2026.
• 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 is valued for social insurance by prefecture and floor area, less what the employee pays). Japanese, opened 19 October 2026.

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