How Japan take-home pay works
Your Japanese payslip deducts three social insurances before tax: health insurance (≈10% of standard remuneration, split with your employer), the employees’ pension (18.3%, also split), and employment insurance. Income tax then uses Japan’s progressive 5–45% brackets plus a 2.1% reconstruction surcharge. Resident tax — roughly 10% — is charged by your city and prefecture on last year’s income, which is why your second year in Japan feels more expensive than your first.
Why is my second year in Japan more expensive?
Resident tax is assessed on the previous calendar year’s income and billed from June. In your first year you had no prior-year Japanese income, so there was nothing to bill. From year 2 the ~10% resident tax appears on top of income tax.
Is Furusato Nozei really “free” gifts?
Almost: donations above ¥2,000 are returned as income- and resident-tax credits up to your personal limit, and municipalities send thank-you gifts worth up to 30% of the donation. Donate above your limit and the excess is a real cost.
Should I claim the pension refund or keep the years?
If you may return to Japan or your country has a totalization agreement, keeping the years can be worth more. If you are leaving for good and have under 10 years of payments (the minimum for a Japanese pension), the lump-sum refund is usually the practical choice.