Why the Japanese Salary System Seems Complex?If you are considering a career as a software or mechanical engineer in Japan, you might find the job offers a bit confusing. Unlike many Western countries, where "Annual Base Salary" is the only figure that matters, Japan uses a unique structure composed of monthly base pay, seasonal bonuses, and various allowances.Understanding this system is crucial not just for your survival, but for negotiating a package that reflects your true worth in one of the world's most advanced tech hubs.What you will learn from this article:The difference between gross salary and "take-home" pay in Japan.How the Japanese bonus system and "Minashi Zangyo" (fixed overtime) work.How to maximize your career value as a foreign engineer using GTalent/GitTap.Gross Salary vs. Net Salary (Take-home Pay)In Japan, your "Gross Salary" (Gakumen) and "Net Salary" (Te-dori) are different. Typically, your take-home pay is about 75% to 85% of your gross monthly salary.What is deducted?Social Insurance (Shakai Hoken): This includes health insurance, welfare pensions, and unemployment insurance.Income Tax (Shotoku-zei): Calculated based on your monthly income.Residence Tax (Jumin-zei): Note that this is usually deducted from your second year in Japan onwards.Source: National Tax Agency - "Taxes in Japan" The Japanese Bonus System (Seasonal Bonuses)Many Japanese companies, including large-scale manufacturers and traditional tech firms, offer bonuses twice a year (Summer and Winter).Monthly Salary vs. Annual Salary: If a job offer states "Annual Salary: 6 Million JPY," it may include bonuses equivalent to 2–4 months of the base salary.The "13th Month Pay" Concept: While not legally mandated, many companies treat bonuses as a significant part of the total compensation.Pro-tip for Engineers: International tech startups in Tokyo often offer a "Total Annual Package" without bonuses, providing a higher monthly cash flow. Knowing which structure fits your lifestyle is key.Understanding "Minashi Zangyo" (Fixed Overtime Pay)One of the most unique aspects of the Japanese salary slip is Fixed Overtime Pay (Minashi Zangyo).The Meaning: The company includes a set number of overtime hours (usually 20–45 hours) into your base monthly salary.The Benefit: Even if you work zero overtime hours, you still receive the full amount.The Catch: If you work more than the fixed hours, the company must pay the difference.For high-performing developers who work efficiently, this can effectively increase your hourly rate.Allowances: Housing, Commuting, and MoreJapanese companies often provide "Allowances" (Teate) that are separate from your base salary:Commuting Allowance: Most companies cover 100% of your train/bus commuting costs (usually up to 50,000 JPY/month). This is tax-free for the employee.Housing Allowance: Some companies provide a stipend to help with Tokyo’s rent, though this is becoming less common in pure "Foreign Capital" (Gaishikei) firms.Reading Your Japanese Pay Slip (Kyuyo Meisai)When you receive your first pay slip, look for these key terms:Kihon-kyu (基本給): Base salary.Teate (手当): Allowances.Kojo (控除): Deductions (Taxes and Insurance).Sashihiki Shikyugaku (差引支給額): The final amount deposited into your bank account.How to Ensure a Fair Salary PackageAs a foreign engineer, navigating these terms during an interview can be daunting. Are you being offered a fair rate for your Java or Robotics expertise?The most effective way to secure a high-paying role is through a specialized recruitment agent. At GTalent, we specialize in connecting international IT and mechanical engineers with top-tier companies in Japan. We don't just find you a job; we negotiate your "Minashi Zangyo," sign-on bonuses, and relocation packages on your behalf.Don't leave your salary to chance. > Register with GTalent to access English-friendly, high-salary positions in JapanEssential Tools for Your Job SearchTo succeed in the Japanese market, you need the right documentation. Traditional Japanese resumes (Rirekisho) are very different from CVs in the US or Europe.Learn more: How to Write a Japanese Resume (Rirekisho) & CV for Engineers>[Free Template] Complete Guide to Japanese Resumes for IT Engineers>[Free Template]Japanese CV Guide for Engineers: How to Write a Shokumu KeirekishoPlatform for Engineers: If you want to be scouted directly by tech companies without the hassle of traditional applications, use GitTap. It’s a platform designed specifically for engineers to find modern work environments in Japan.>Sign up for GitTap and let companies come to youConclusionThe Japanese salary system is designed for stability and long-term rewards. While the deductions and "Minashi Zangyo" might seem strange at first, the total compensation—including health security and professional growth in a world-leading economy—makes Japan an incredible destination for engineers.Ready to start your journey? Let GTalent guide you through the complexities of the Japanese market.

Companies recruiting foreign IT engineers are increasing due to the labor shortage in Japan.On the other hand, there are considerable differences between companies in terms of salary and treatment that can be provided that match the needs of foreigners.So, first of all, we will explain the results of a survey on IT engineers to find out what level of salary is satisfactory and what is the standard salary market trend in Japan. In addition, we will introduce the points you should be careful with in terms of treatment and to who consult when you are in doubt.１．1. Why is the salary market trend important? Isn’t your visa issued unless your salary is at least equal to the Japanese salary?What do you think is the motivation for companies to hire a foreigner?There are two main patterns.・ They wants to recruit talent that is not available in Japan・ They wants to recruit talent equivalent to JapanFirst one is those who have a great skills which Japanese don’t have and get enough treatment to cover everything from housing, meals and maids, all this as company expenses. However, there are few talents in reality.If you see this article and have a rare skill that can be useful in Japan, be bullish on salary and treatment. When negotiating, one of the tips is to negotiate through agents.On the other hand, the latter is the engineer whose salary market is a problem. However, in addition to economic benefits, knowing the Japanese market from the residency system is the key to changing jobs.Foreigners need a residence permit and work permit. So-called visa. In the case of Japan, a work permit will not be granted unless the salary is equivalent to that of a Japanese by a Ministry of Justice ordinance. Therefore, when you work in Japan, you should consider the “salary market of Japanese engineers” and “treatment unique to foreigners”.In addition, in order for foreign IT engineers to work in Japan, it is normal to work with a “technical” status of residence = workable visa. These visas are usually obtained with support from the company. Don’t take visa support as granted, and in case there is support available, ask your company how much support you can get from them.２．What is the salary market trend for foreign IT engineers? Let’s get to know the Japanese IT engineer’s salary market.Since salary is an important part for obtaining the status of residence, then what is the salary market for Japanese IT engineers? What we’ll say from now shows the average salary by occupational type, as surveyed by DODA who is one of the largest HR company in Japan and published on January 20, 2020.As the survey, it can be said that the income of IT engineers in the upstream process is higher and that the downstream is lower.However, considering the age, experienced IT engineers can expect an annual income of over 6 million yen downstream even after the age of 50, and it exceeds the 4.41 million yen which is the average salary of workers in Japan (FY2018, according to the National Tax Agency).In addition, the market of annual income for IT engineer is not only by occupation but also by industry or area.For example, as shown in the survey at this link (Heikinnensyu.jp), if you compare the same SE position, the industry with high technical requirements and high economic conditions, such as those found in financial SE and information and communication, has higher annual income.The average annual SE income by industry exceeds 16.6 million yen in the highest finance and insurance industries and 11.8 million yen in the information and communications industry, while the lowest in the transportation and postal industries has a wide range of 4.80 million yen.In our opinion, the finance and insurance industry and the information and communication industry are too high on the website, there might be some bias for the data. However, depending on which industry you choose and on your level of technological skills, these can be said that salary is likely to change greatly even for the same SE position.By the way, “The wall of 6 million yen” is often said for the annual salary of IT engineers. Because it is difficult to work with an annual income exceeding 6 million yen and salary satisfaction increases when it exceeds 6 million yen.Looking at the whole occupations in Japan, the occupations with an average annual income of more than 6 million yen are a small number of occupations in the upstream according to the survey results through all ages.However, as the age increases, the number of occupations whose average annual income exceeds 6 million yen will increase slightly. Beyond the age of 50, the average annual income for most occupations is over 6 million yen.For example, the debug tester’s annual income has also risen, with an average annual income of 6.61 million yen, far exceeding the average annual income of all office workers. It is a job that is said to be simple and steady, but considering that you will work for a long time in Japan, it will be considered as one of the more attractive jobs.In this way, it is necessary to consider whether the salary is an acceptable one, considering age and experience.3.What should foreign IT Engineers be aware of other than salary?It is not recommended to only consider salary market when considering the salary.For example, if you are wondering which company is better with the same 5.5-million-yen salary, it is important to consider the following factors.・ Overtime working hours・ Welfare・ Systems such as company training and mentors・ Support for family visa acquisitionIt is important to get to know the actual working style, such as whether the workplace is too hard together with overtime hours, judging from salary alone may even damage your health. So it is important to be careful with.Among benefits, other than special holidays, there are systems and health examinations that fit the sense of IT engineers who work hard, such as subsidized food and meals provided by the company, and that are economically beneficial. It is a good idea to pay particular attention to items that require a large amount of expenditure, such as whether they will bear the burden or reduce the burden at their own expense.As a foreigner living in Japan, the Japanese language is always needed to be improved. It would be better if the company has an educational program.Also, if you have family visa support, you can reduce your out-of-pocket expenses. It is important to make sure if your family will be supported.4.G Talent is the service that supports Foreign IT engineer decisions.For that reason, the salary of foreign IT engineers is also required when obtaining a visa, so let’s negotiate with the company to aim for a salary with the same market price as the Japanese occupation and industry.However, there are many other factors that actually affect salary, such as visa support, benefits and educational training programs, and negotiating these one by one is a difficult task. And, in the end, you’ll often find yourself worried about some of the several companies you’ve narrowed it down.In this regard, it is considered that using recruitment service agents specializing in foreigners has a great advantage.For example, with our G Talent’s service, you can get bilingual support expert on IT talent with free. It will help you bridge the gap between individuals and companies during negotiations. And you don’t need to worry about words.In addition, G Talent is a long-established English conversation school. The company also has know-how in training programs and is well-versed in the education and training programs of recruiting companies, providing objective advice and insights.Therefore, G Talent is well aware of the recruitment performance of bilingual global talent at each company. We have a lot of projects with companies with a proven track record, so if you are a candidate for a foreign IT engineer, your options will be expanded after receiving the GTalent service.G Talent – Professional IT Recruitmenthttps://www.gtalent.jp/ConlclusionThe salary market of foreign IT engineers is considered the same as the salary of Japanese IT engineers. Visa requirements also require a salary equivalent to Japanese by Japanese government.In general, the salary level of IT engineers is considered to be higher than the general office workers, but it does not seem to be an attractive salary for some young people in the downstream process.However, it is difficult for foreign engineers to understand the actual total amount of salary if they don’t look at the benefits, like training from the company, visa support, etc. We recommend you to seek the help of a professional advisor like G Talent and be sure to change jobs with a reasonable salary.

When foreign workers start working in Japan, they will pay “Japanese taxes”. If you don’t have knowledge about Japanese taxes, you may pay extra even when you can reduce them, or you may forget to pay them and get a high bill for late tax payment. First of all, let’s know the basics of Japanese taxes and Japanese taxes on foreigners to avoid losing money.Types of Japanese TaxesNot only foreign workers living in Japan must pay taxes, but also foreigners who came to Japan to work for a short period of time and earn an income. Japanese taxes are divided into “national taxes” paid to the country and “local taxes” paid to prefectures and municipalities. The table below lists the main taxes in Japan.As you can see, there are many taxes in Japan, but you don’t need to understand everything. For example, “consumption taxes” such as consumption tax and liquor tax are included in the money you pay when you shop, so you won’t forget to pay or overpay. In addition, “taxes on property” such as automobile tax and property tax are simply paid by people who have property such as cars and land.There are three things that foreign workers living in Japan should understand: “income tax”, “resident tax” and “inheritance tax”.Income Tax for Foreign WorkersWhat kind of tax is income tax?Income tax is the tax you pay when you earn money. In Japan, people with income are obliged to pay income tax, and as a general rule, they are taxed on the income earned in the year from January 1st.Foreign workers should check their classification!Japan’s income tax law divides individuals according to their “style of residence”, and the taxable range varies depending on the classification. Foreign workers need to know which of the following categories they belong to:Standards and ranges for foreign workers to pay income taxThe taxable income tax that needs to be paid by foreign workers living in Japan depends on the following three categories.What is “Income Tax Deduction” and how it allows foreign workers to reduce taxes?The formula for calculating the income tax amount is as follows.Income tax amount = Income amount × Tax rateThis formula works as a base only and does not consider other deductions (a system that reduces taxes). There are various deductions for Japanese income tax. The deduction methods are divided into “income deduction” and “tax deduction”. Income deduction subtracts a certain amount from the income amount, and tax deduction subtracts a certain amount from the income tax amount. If both deductions apply, modify the formula as follows:Income tax amount = (Income Amount － -Income Deduction Amount） × Tax Rate – Tax Deduction AmountAlso, there are different types of income deductions and tax deductions.Resident foreign workers can receive all deductions in the same way as Japanese if they meet the requirements for each deduction. Non-residents, on the other hand, can only receive three deductions: miscellaneous loss deduction, donation deduction, and basic deduction.Among the many deductions, the deduction that foreign workers living in Japan should know is the “foreign tax deduction”.What is foreign tax reduction?There is a problem of “double tax payment”, which is whether foreign workers (residents) who have income tax on overseas income must pay taxes to both their home country and Japan. In order to prevent this double tax payment, the “Tax Treaty” was established between the countries.Let’s suppose you have a foreign worker from a country that has a tax treaty with Japan. If the person paid income tax in his / her home country for income earned in his / her home country, if he / she reports to Japan, the income tax paid in his / her home country will be deducted from the Japanese income tax. This deduction is called “foreign tax deduction”.However, foreigners from countries that do not have a tax treaty with Japan, must pay double tax. In addition, even if you have a tax treaty, you should be aware that the scope of foreign tax credits may vary depending on the signing country.>> Check here for countries that have signed tax treaties (Check out Japan’s tax treaty network)Resident Tax for Foreign WorkersWhat kind of tax is resident tax?Resident tax is a tax paid to the municipality where you live. It consists of two types, prefectural and municipal taxes.The formula for calculating the residence tax is as follows.Municipal Tax Amount = Income Rate+ Per Capita Rate※ What is income rate?The amount to be paid according to the amount of income. Basically, the income amount of the previous year × 10% (6% municipal tax + 4% prefectural tax).※ What is per capita rate?Amount paid by people living in the same local government regardless of their income. There are regional differences, but is around 5,000 yen.Standards and ranges for foreign workers to pay municipal taxResident tax applies to individuals with addresses in local governments regardless of nationality. Whether there is an address is determined based on January 1 of that year. For example, foreign workers who have been working in Japan since February 1, 2019 but did not have an address in Japan as of January 1, 2019 will not be subject to 2019 residence tax.In addition, the income rate for municipal tax is applied on all income earned in the year from January 1 of the previous year. In other words, foreign workers who have no previous year’s income, it won’t apply.Inheritance Tax for Foreign WorkersWhat kind of tax is inheritance tax?Inheritance tax is tax that may be paid when you inherit the property of a deceased person (real estate, securities, savings, etc.).The formula for calculating the inheritance tax is as follows.Inheritance Tax = Inheritance-Standard Deduction x Tax Rate-DeductionThere are various deductions for inheritance tax. The tax rate varies from 10% to 55% depending on the amount of inherited property.Standards and ranges for foreign workers to pay inheritance taxWhether foreign workers bear the inheritance tax depends on whether the address of the heir (inheritor) or bequeather (the person who died) is in the country or outside the country, and if the inherited property is in the country or abroad.Inheritance tax may occur in Japan when inheriting overseas property, but in this case, double payment will occur. However, as with inheritance tax, “foreign tax credits” are applied in the same way as income tax, so foreign workers from countries with tax treaties can avoid double payments.ConclusionYou will receive a reminder when you are behind with taxes in Japan. If you do not pay even if you receive a reminder, the arrears tax will increase, and eventually you will be subject to administrative sanctions and your salary and property will be seized.If a foreign worker works in Japan as a company employee, income tax and resident tax will be deducted from the salary, so you do not have to pay it yourself, but if you work as a business owner or a freelancer you must pay them yourself . Get basic knowledge to avoid forgetting to pay or overpaying.Japanese inheritance tax is very complex and has a deadline of 10 months. In the unlikely event that inheritance occurs, it is better to consult an expert promptly.