Hello,
Does anyone know how is income tax and NI calculated in Japan compared to the UK? In the UK there is a PAYE system for income tax (allowance and bands are distributed equally throughout the year to make potential overpayment / underpayment minimal) but tax is still calculated on an annual basis. The only non-obvious part might be reduction of personal allowance for income over £100,000. NI on the over hand is straightforward, paid on monthly basis, with easy income bands and no overpayment returns / underpayments / reductions of allowances etc.
For example: £5,000 gross per month / £60,000 gross per year (same salary in all months to simplify calculation)
NI:
Exempt: 1048 → £0.00
Lower band: (4189 − 1048) × 8% = £251.28
Higher band: (5000 − 4189) × 2% = £16.22 (UK's lower rate at higher income )
TOTAL: £267.50
Income Tax:
Exempt: 12570 → £0.00
Lower band: (50270 − 12570) × 20% = £7540.00
Higher band: (60000 − 50270) × 40% = £3892.00
TOTAL: £11,432.00 (per month: ~£952.67)
Net per month: 5000.00 − 267.50 − 952.67 = £3779.83
I was looking for a japanese calculator online, but all of them give different net salary result for the same gross salary. I am interested in the topic as within 12 months I might ask my manager if it is possible to be relocated to japanese office of my company. I will probably learn if my salary will stay the same or be reduced as japanese salaries tend to be lower, but they will tell me gross value and I have to calculate net myself and determine how it will compare to the current UK net salary.
Does anyone know how is income tax and NI calculated in Japan compared to the UK? In the UK there is a PAYE system for income tax (allowance and bands are distributed equally throughout the year to make potential overpayment / underpayment minimal) but tax is still calculated on an annual basis. The only non-obvious part might be reduction of personal allowance for income over £100,000. NI on the over hand is straightforward, paid on monthly basis, with easy income bands and no overpayment returns / underpayments / reductions of allowances etc.
For example: £5,000 gross per month / £60,000 gross per year (same salary in all months to simplify calculation)
NI:
Exempt: 1048 → £0.00
Lower band: (4189 − 1048) × 8% = £251.28
Higher band: (5000 − 4189) × 2% = £16.22 (UK's lower rate at higher income )
TOTAL: £267.50
Income Tax:
Exempt: 12570 → £0.00
Lower band: (50270 − 12570) × 20% = £7540.00
Higher band: (60000 − 50270) × 40% = £3892.00
TOTAL: £11,432.00 (per month: ~£952.67)
Net per month: 5000.00 − 267.50 − 952.67 = £3779.83
I was looking for a japanese calculator online, but all of them give different net salary result for the same gross salary. I am interested in the topic as within 12 months I might ask my manager if it is possible to be relocated to japanese office of my company. I will probably learn if my salary will stay the same or be reduced as japanese salaries tend to be lower, but they will tell me gross value and I have to calculate net myself and determine how it will compare to the current UK net salary.