You are currently viewing Dependent Deduction and Spouse Deduction in Japan

Dependent Deduction and Spouse Deduction in Japan

Menu

Relatives living outside Japan and dependent deduction (2023)

Dependent Deduction of Japan (2021)

Spouse deduction = Haigusha Kojo of Japan (2021)

Increase of Spouse’s salary and Taxpayer’s income tax

Spouse Special Deduction

Spouse’s Health Insurance 

You can be a dependent of social insurance even if your salary exceeds 1.3 million yen

Relatives living outside Japan and dependent deduction (2023)

Suppose you live in Japan and your family (e.g., your mother) lives outside Japan. And you send money to her to support her livelihood.
In this case, you may be able to use the dependent deduction (扶養控除)depending on the situation.

Here is a simple explanation of the Japanese dependent deduction. This rule regarding dependent deduction is the latest information that has been changed since January 2023.

🗻Key Points

In order for you to use the dependent deduction, you must have an official document proving your kinship to your family member (an official document showing her name, address, and date of birth and that she is your relative, and its Japanese translation. It is OK if the document was issued a few years ago).

And you also need documents showing that you sent her money. And she needs to maintain her living by the money sent from you. But there is no limit to the amount of money you are sending her. So, even if you send her only 100,000 yen, you would still be able to use the dependent deduction (with the exception noted below).

🌲Let me try to explain Dependent deduction in detail and in an easy-to-understand way.

You live in Japan. If you have obtained a status of residence in Japan and are working as an employee in Japan, you are a resident of Japan even if one year has not passed since you have started living in Japan.

Your relative living abroad needs to earn less than 480,000 yen per year(as for taxable income). If her income is only salary, her annual salary income needs to be less than 1,030,000 yen (1,030,000 yen – 550,000 yen).

And her age, in principle, must be at least 16 years old and less than 30 years old (=16~29. at the end of the year). Or, her age must be 70 years old or older.

In other words, if she is 30 years old, you cannot, as a general rule, use the dependent deduction for her.


You do not have to file your own tax return because you are a Japanese company employee. Your employer calculates the tax for you by applying the dependent deduction. But you need to present the following documents to your employer

(You can use the dependent deduction even if you are self-employed.)

(1) Proof that she is your relative.

(2) Documents showing that you remit 100,000 yen or something to HER.
(If you are sending the money to someone else, such as her spouse, you cannot use that document. If you met with her in person and gave her the money, you would not be able to provide this documentation and you would not be able to use this dependent deduction. So, make sure you use the bank to transfer the money to her.)

If you fulfill the above two requirements, you will be able to use the dependent deduction, and you will be lucky to deduct 380,000 yen from your taxable income, even though you only transferred 100,000 yen or 1000 yen or something).

Above, I wrote “As a general rule, you cannot use the dependent deduction if she is between the ages of 30 and 69. If she is between the ages of 30 and 69, she would be able to work, which means she should work without relying on the money sent by you..
(to memorize this requirement)

However, if she (between the ages of 30 and less than 70) is living outside Japan to study abroad, you can use the dependent deduction. If she goes to the Philippines to study language and receives more than ¥1 per year from you, you can use the dependent deduction for her.

Or, if she is between the ages of 30 and 69 and you send her more than ¥380,000 per year, you can use the dependent deduction.

If she is over 16 but under 30 or over 70, you could use the dependent deduction even if the amount you send is small. But if she is between the ages of 30 and 69, you need to send more than 380,000 yen per year.

Dependent Deduction in Japan (2021)

Assumed a resident of Japan ( hereinafter referred to as ” Taxpayer ” ) has income in Japan.
Taxpayer pays money to sustain his dependent relatives ( Fuyo shinzoku = 扶養親族 ).
Taxpayer needs to spend money to support his dependent relatives.
So amount of his tax should be reduced by government.

Dependent relative is defined as:
1 Taxpayer’s relative is aged 16 or over 16 years.
2 Relative who depends on taxpayer’s earnings.
3 If the dependent relative has salaried income, his/her annual salary should be less than 1,030,000 yen.
4 Relative who is not a family employee.
5 Relative who is not a spouse of the taxpayer.

If the taxpayer has relative/s who meets these conditions, taxpayer can deduct specific amount from his taxable income.
In this way, Japanese government tries to support taxpayers who sustain his relatives.

Amount of dependent deduction differs depending on which category they fall.

Relative’s age ( As of end of year ) is 16 or over 16 years old. : 380,000 yen

Relative’s age ( As of end of year ) is 19 or over 19 years and below 23 years old. : 630,000 yen.

Spouse deduction = Haigusha Kojo of Japan (2021)

A spouse is not considered as a dependent relative.

So, you can not use Dependent Deduction for your spouse.

However, there is a system of deduction for spouse deduction ( Haigusha kojo ) .

Age of Spouse ( As of end of year ) is below 70 years. : the amount of deduction is 380,000 yen.

This amount can be deducted from the Taxpayer’s Taxable Income.

Age of Spouse ( As of end of year ) is 70 years or over 70 years. : the amount of deduction is 480,000 yen.

This amount can be deducted from Taxpayer’s Taxable Income.

These deductions are applicable even if the taxpayer’s relative or spouse does not live in Japan.

So, a taxpayer could use this deduction by pretending that taxpayer sustained his / her relative who might be living in a foreign country.

A taxpayer could pretend that he had dependent relatives or spouse outside of Japan.
And if the number of relatives is 10, he could deduct for a total of 3,800,000 yen, (380,000 yen x 10)

So, the taxpayer in Japan could reduce 3,800,000 yen from the taxpayer’s taxable income.

Of course, this is tax evasion.

However, the taxpayer cannot use this method now.

Now, if the taxpayer’s relatives or spouse are non residents of Japan, taxpayer has to provide a proof.

The taxpayer must provide:
1 A certificate issued by the foreign government stating that the person is actually the taxpayer’s dependent or spouse.
2 A document or proof of remittance sent by the taxpayer to his/her dependent or spouse.
(For example, scanned copy of bank book)

Non residents of Japan cannot apply deduction for dependent and spouse.

If a taxpayer in Japan is a non resident (even if a person is a non resident of Japan as long as he has earnings emerged in Japan), he still has to pay income tax.. He cannot use deduction for dependent and spouse.

Non residents can apply basic deduction of 380,000 yen.
( June, 2021 ) 

Increase of Spouse’s salary and Taxpayer’s income tax

If a taxpayer (Breadwinner, Salaried Worker) has an annual salary of less than 11.2 million yen and supports his spouse, on calculation of amount of his income tax of Japan, 380,000 yen can be deducted from his taxable income.

If his rate of income tax is 20%, he can reduce his income tax by 76,000 yen (380,000 yen * 20% = 76,000 yen).

If amount of his salary is high, he cannot apply for spouse deduction of 380,000 yen.

If his salary (Non taxable income) ranges between 11.2 million yen – 11.7 million yen, he can use spouse deduction of 260,000 yen instead of 380, 000 yen.

If his salary (Non taxable income) ranges between 11.7 million yen – 12.20 million yen, he can use spouse deduction of 130,000 yen instead of 380,000 yen.

As mentioned above, in order to apply for Spouse Deduction, his/her annual salary should be less than 1,030,000 yen.

(Amount of basic deduction 480,000 yen + salaried income deduction 550,000 yen = 1,030,000 yen)

Spouse Special Deduction = Haigusha Tokubetsu Kojo

If her annual salary is more than 1,030,000 yen, taxpayer CANNOT apply for this Spouse deduction.

However he may be able to apply for Spouse Special Deduction as long as her annual salary is less than 2,016,000 yen.

In order to apply for Spouse Special Deduction of 380000 yen, amount of Taxpayer’s annual salary should be less than 11.2 million yen and amount of spouse’s salary is more than 1,030,000 and less than 1,500,000 yen.
(if it is less than 1,030,000 yen, he can use Spouse Deduction)

If the taxpayer can meet this requirement, he can apply for Spouse Special Deduction and the amount of deduction is 380,000 yen.
(It is same as Spouse deduction)

So 380,000 yen can be deducted from Taxpayer’s taxable income.

If the taxpayer’s annual salary is less than 12.2 million yen and amount of spouse’s salary is more than 1,030,000 yen but less than 2,016,000 yen, Taxpayer can still apply for Spouse special deduction.

However amount of deduction is not 380,000 yen. It is reduced in stages.

 .

Health insurance and Pension tax and Spouse

If the spouse of the taxpayer’s annual salary is less than 1,300,000 yen (who is a salaried worker), the spouse can be covered by the Taxpayer’s Health Insurance (Kenko Hoken) and employee’s pension (Kosei Nenkin).

So the spouse does not need to pay Health insurance tax and Employee’s Pension by herself.

Therefore, if her annual salary is 2 million yen (It means more than 1,300,000 yen) and taxpayer’s salary is less than 9 million yen, taxpayer can use Spouse Special Deduction though she needs to pay health insurance and employee’s pension by herself.

Spouse deduction for tax wise and Spouse deduction for Social insurance wise are completely different matters.

In the case of Spouse deduction for tax, taxpayer can receive advantage. On the other hand, in the case of Spouse deduction for Social insurance, spouse can receive advantage.

However if she is working in a company where the number of employees is more than 500 and the monthly salary is 88,000 yen, she needs to join health insurance and employee’s pension of her workplace.

88000 yen * 12 months = about 1,060,000 yen of annual salary. It is called the wall of 1,060,000 yen.

There is the wall of 1,030,000 yen, 1,060,000 yen and 1,300,000 yen.

When spouses overcome these barriers (boundaries), spouses need to examine which choice is the right one.

When the spouse receives salary of 1,030,001 yen, she needs to pay income tax by herself.  And her husband can not use dependent deduction for tax purpose.

When the spouse receives salary of 1,060,001 yen yen and works in relatively large company, she needs to pay health insurance and employee’s pension by herself.  

When the spouse receives salary of 1,300,001 yen, she needs to pay health insurance and employee’s pension by herself.  

Spousal deduction and Dependent deduction in Japan

If your taxable income (living in Japan) exceeds 10 million yen, you cannot use the spousal deduction nor the special spousal deduction.

If you have a family member (other than your spouse) who is supported by your income, you may be able to use the dependent deduction.

🍒In the case of dependent deduction, there is no limit of 10 million yen as mentioned above.

But you can’t use the dependent deduction if you send money to a child under the age of 16.
At age 16 she will be a high school student and you will be paying a lot of money for her school fees. Therefore, you can use the dependent deduction. And 380,000 yen can be deducted from your taxable income.

If your daughter is 19 or over 19 but under 23, you can deduct 630,000 yen from your taxable income.

This is because when she turns 19, she will be a college student and you will be paying more school fees for her.💰

You can be a dependent of social insurance even if your salary exceeds 1.3 million yen

Abolition of the Salary limitation (1.3 million yen) in Japan

When housewives and others work part-time, they will be excluded from their spouse’s social insurance coverage if their salary exceeds 1.3 million yen. This 1.3 million yen is called the salary wall. It has been announced that this wall will be abolished.

I will explain with an example to make it easier to understand.

Mr.Tom (company employee, annual salay is 5 million yen) ‘s wife Nancy works at a convenience store three days a week. She really wants to work more, but there will be problems if her salary exceeds 1.3 million yen.

As of now, Nancy is covered by Tom’s social insurance (health insurance + pension). So, Nancy doesn’t have to pay for her own social insurance (health insurance and pension).

Tom pays for the social insurance of his entire family.

However, if Nancy’s salary exceeds 1.3 million yen per year, she will be excluded from Tom’s social insurance coverage. Then Nancy will have to join the national health insurance and national pension on her own. The amount will be about 200,000 yen per year, so the money left in Nancy’s hands will decrease.

There is a difference of about 200,000 yen in the money left in Nancy’s hands between when her salary is 1.29 million yen and when it is 1.3 million yen.

So, Nancy works carefully so that her salary does not exceed 1.3 million yen.

If Nancy’s salary exceeds 1.3 million yen, she has to work enough to get an annual salary of about 1.6 million yen in order to increase the money left in her hands.

Therefore, the government decided to abolish this 1.3 million yen wall.

Even if Nancy’s income exceeds 1.3 million yen, she can stay under Tom’s dependent coverage for up to two consecutive years.

However, it is necessary that Nancy’s salary exceeding 1.3 million yen is temporary. If Nancy’s salary is expected to exceed 1.3 million yen forever, this system cannot be used.

Then, even if Nancy’s salary exceeds 5 million yen, can she remain under Tom’s dependent coverage as long as it is temporary and within two years? It is not clear what kind of documents are necessary to prove that Nancy’s salary exceeding 1.3 million yen is temporary.

And this system will start on October 1, 2023, which means tomorrow.
But detailed information cannot be found.

If you think this page is useful for you, you may buy me a cup of tea.(send == 送信)

PayPal.Me/LawyerinJapan