Residence tax (jūmin-zei, 住民税) is a local tax paid to your prefecture and municipality. Many foreigners are caught off guard by it — especially in their second year in Japan when the bill suddenly arrives. Here’s everything you need to know.

What Is Residence Tax?

Residence tax funds local government services — roads, schools, public facilities. Every resident of Japan is required to pay it, regardless of nationality.

It’s separate from income tax:

  • Income tax (所得税) — national tax, paid year-round via payroll or tax return
  • Residence tax (住民税) — local tax, billed based on prior year’s income

How Much Is It?

Residence tax = 10% of your previous year’s income (approximately), split as:

  • 4% to prefecture
  • 6% to municipality

Plus a flat per-person fee of around ¥5,000/year.

Example: If you earned ¥4,000,000 last year, your residence tax is roughly ¥400,000, paid over 4 installments = about ¥100,000/quarter.

When Does It Start?

This is the key thing foreigners miss:

  • Residence tax is based on prior year’s income
  • If you arrived in Japan in 2024, your first residence tax bill arrives in June 2025
  • Your first full year in Japan, you pay zero residence tax (because you had no prior-year Japan income)
  • It hits in year two — and it can be a significant amount

Plan for this. In your first year, set aside approximately 10% of your income each month so the year-two bill doesn’t surprise you.

How Is It Billed?

If You’re an Employee

Your company withholds residence tax from your paycheck in monthly installments — June through May. You don’t receive a separate bill.

When you join a company mid-year, residence tax is usually not withheld until the following June (for the prior year’s income).

If You’re Self-Employed or Left a Job

You’ll receive a tax bill (futsū chōshū) from your municipality in June. Pay in 4 installments:

  • 1st installment: June
  • 2nd installment: August
  • 3rd installment: October
  • 4th installment: January (following year)

How to Pay

Options:

  • Bank transfer auto-pay (口座振替) — most convenient, set up at your bank or city hall
  • Convenience store — bring the payment slip to any konbini
  • At city hall — in person, cash or credit card
  • Online (PayPay, credit card) — available in many municipalities now

What If You Can’t Pay?

Contact your municipal tax office (shizei-ka) immediately. Japan has a formal process for requesting installment plans (bunkatsu nōfu) if you’re facing financial hardship. Do not ignore the bill — late penalties and collection enforcement apply.

Leaving Japan Mid-Year

If you move out of Japan during the year:

  • You must pay all outstanding residence tax before leaving, OR
  • Designate a tax representative in Japan (納税管理人) to pay on your behalf
  • Inform your city hall of your departure date when submitting your move-out notification

Unpaid taxes can cause issues if you try to return to Japan on a new visa.

Exemptions and Reductions

If your income is low, you may qualify for a residence tax reduction or exemption. Apply at your city hall. Income thresholds vary by municipality and number of dependents.

Checking Your Residence Tax Amount

In May/June each year, you receive a Notice of Residence Tax (住民税決定通知書). This shows your taxable income, deductions applied, and total tax for the year.

If you think the amount is wrong (e.g., deductions weren’t applied correctly), contact your city hall tax department.

Bottom Line

Residence tax hits in year two at around 10% of your prior-year income. If you’re an employee, it comes out of your paycheck automatically from June. If you’re self-employed, you’ll receive a bill. Start saving for it in your first year so it doesn’t come as a shock.