Employer’s duty and Employment in Japan
In the case you ( sole proprietor. Employer without company) hires an employee and pays salary to him, you need to prepare several kinds of documents.
Employer needs to submit some documents to tax office, city office (Other than tax filing papers).
When you pay salary to your employee, you will withhold income tax from his salary.
Assumed that amount of his monthly salary is 200,000 yen (Gross salary. this is called “Gakumen salary”), you will deduct about 4700 yen from 200,000 yen and pay 195,300 yen to him.
This 195,300 yen is take-home pay (Tedori).
When you pay salary to him, you will hand out Withholding tax slip (Gensen choshu hyo).
You are required to make this paper by law and this paper is called “Statutory record =Hotei chosho”.
There are several kinds of statutory record and you need to submit statutory record to tax office and city hall by due date.
Statutory record clarifies amount of gross salary, withholding tax amount, name of employee etc.
In the case you paid salary in 2019, you need to submit statutory record by end of January 2020.
(You can pay income tax by internet and you can file tax return by internet)
❝ Regarding Year end adjustment in 2022, updated information, you can see this page, too.❞
Withholding tax slip should be made by Employer
When you pay salary, bonus to your employee, you will write annual gross salary, withholding tax, social insurance premium etc. in withholding tax slip (Gensen choshu hyo)
You will make Gensen choshu hyo (Witholding tax slip) for each employee.
And according to withholding tax slip, you need to make Total table of statutory record (Hotei chosho gokei hyo).
When you conduct year end adjustment (Nenmatsu chosei )、if annual amount of A employee’s gross salary is 5 million yen or more, you need to make Total table of statutory record.
When you conduct year end adjustment (Nenmatsu chosei )、if annual amount of employee Mr.E ‘s gross salary is 3 million yen and employee Mr. F’s gross salary is 3 million yen, you do not need to make Total table of statutory record.
Please to be advised that you will make withholding tax slip for each employee. And based on withholding tax slip, you need to make total table of statutory record.(Hotei chosho gokei hyo)
This is a sample of total table of statutory record.
Other than withholding tax slip (it is submitted to tax office and your employee), you need to make Report of salary payment (Kyuyo shiharai Hokokusho) and submit it to city hall.
If you are operating your business in Chuo-ku, Tokyo and your employee is living in Shibuya-ku, Tokyo, you need to send the paper to Shibuya ward office.
According to this KyuyoshiharaiHoukokusho, ward office levies Resident tax on your employee.
Even if amount of his salary is 1 yen, you need to submit this Shiharai chosho.
This is a sample of Report of salary payment (to ward office where your employee is living).
Withholding tax slip for payment of retirement income
When you pay retirement income to your employee, you will write amount of retirement payment, amount of retirement income deduction.
When you are operating a company and pay retirement remuneration to other director, this statutory record is necessary.
Payment of Lawyer’s fee and statutory record
When you hire a lawyer etc. and withhold a part of his fee, you need to make this statutory record (Shiharai chosho=支払調書).
You need to write amount of his fee, amount withheld tax, lawyer’s name etc.
When annual amount of his fee is 50,000 yen or more, you need to make this Shiharai chosho.
Payment of rental fee of real estate and statutory record
In the case you pay rental fee,renewal fee of real estate (for your office space), you need to make this Shiharai chosho as far as annual amount of rental fee for a person or company is 150,000 yen or more, you need to make this statutory record.
However in the case land lord is a company, you (renter) need to make this Shiharai chosho (statutory record) only for renewal fee etc.
As for rental fee, you do not need to make this paper.
Employer needs to receive Employee’s My Number
When you submit these statutory record, your “my number” (a kind of social security number) and “my number” of a person who received salary etc. are necessary.
However some persons may hesitate to provide you with his “My number”.