Your first Japanese payslip will probably arrive as a folded piece of paper, printed in Japanese, with a column of numbers that does not add up to what you were expecting.
If nobody prepared you for this moment, it can feel like something went wrong. Nothing went wrong. Japan just has a payslip format that requires a decoder ring if you’ve never seen one before — and a gap between gross salary and take-home pay that is larger than most new teachers anticipate.
This guide walks through what each line actually means, which deductions are fixed and which ones change over time, and why your second year in Japan will feel financially different from your first in ways that have nothing to do with your spending habits.
The Number That Matters: Gross vs. Take-Home
Job listings in Japan advertise gross salary (額面給与, gakumen kyūyo). The number you actually receive in your bank account is your take-home pay (手取り, tedori), and the difference between the two is where a lot of first-year teachers get blindsided.
A gross salary of ¥250,000 per month sounds reasonable for Tokyo. After taxes, pension contributions, and health insurance, the actual deposit is typically somewhere between ¥150,000 and ¥170,000 — sometimes less if your employer deducts rent for company-arranged housing.
In companies where the pre-arrival explanation is thorough, teachers arrive already knowing this. In companies where it isn’t, the first visit to the ATM on payday is, to put it plainly, a rough moment. The recruitment brochure said ¥250,000. The ATM screen says something else entirely. That gap — ¥80,000 to ¥100,000 per month — is not a mistake or a scam. It’s Japan’s deduction system working exactly as designed.
The antidote is knowing what each line on the payslip represents before you see it for the first time.
The Deductions: What’s Getting Taken and Why
健康保険 (Kenkō Hoken) — Health Insurance
Japan’s national health insurance system covers 70% of most medical costs. Your contribution is calculated as a percentage of your salary and split between you and your employer. This one is non-negotiable and honestly worth what it costs — a doctor’s visit in Japan with coverage is cheap enough that most teachers stop worrying about medical expenses fairly quickly.
厚生年金 (Kōsei Nenkin) — Employees’ Pension
This is the deduction that generates the most philosophical frustration among foreign teachers. You’re contributing to a Japanese pension fund that you will almost certainly never collect, because you’re not planning to retire in Japan.
The contribution is not small — typically around 9% of your salary, matched by your employer.
Here’s what most teachers don’t know: when you leave Japan permanently, you can apply for a lump-sum withdrawal payment (脱退一時金, dattai ichiji kin) — a partial refund of your pension contributions. It won’t come close to what you paid in, and the application process has a time limit after you leave the country, but it exists. A future guide on this site will cover the process in detail. For now, file the term away: 脱退一時金. You’ll want to know it when the time comes.
雇用保険 (Koyō Hoken) — Employment Insurance
Unemployment insurance. Small deduction — typically less than 1% of salary. If you lose your job in Japan, this is what funds any unemployment benefits you might be entitled to.
所得税 (Shotoku Zei) — Income Tax
National income tax, withheld at source. The amount varies with your salary level. Most teachers find this line less alarming than the pension and health insurance deductions because the percentage is lower.
The Deduction That Appears in Year Two (And Why Nobody Warns You)
This is the one that catches people off guard even after they’ve adjusted to the initial take-home shock.
住民税 (Jūmin Zei) — Resident Tax
Resident tax is calculated based on your income from the previous year. In practical terms, this means your first year in Japan, you pay nothing — because you had no Japanese income the year before. Starting in June of your second year, it kicks in automatically via payroll deduction.
The amount is not trivial. For a typical ALT salary, resident tax adds ¥20,000 to ¥30,000 per month to your deductions — appearing suddenly in June with no warning beyond a letter in Japanese that most teachers set aside without fully reading.
Teachers who knew this was coming adjusted their budget in May. Teachers who didn’t know described opening their June payslip and wondering if their employer had made an error. It is not an error. It is a feature of the Japanese tax calendar that the system does not go out of its way to explain to foreign residents.
If you’re currently in your first year: note June of next year in your calendar now, and treat the difference as a known future expense rather than a surprise.
How to Actually Read the Payslip Layout
Japanese payslips follow a broadly consistent format, even if the exact design varies by company.
The left or upper section typically shows your earnings (支給, shikyū): base salary, any overtime, commuting allowance, and other additions.
The right or lower section shows your deductions (控除, kōjo): health insurance, pension, employment insurance, income tax, and — from year two onward — resident tax.
The final number at the bottom is your net pay (差引支給額, sashihiki shikyū gaku) — what actually hits your account.
If your company provides an English version of the payslip, the mapping is straightforward. If it’s Japanese only, use the kanji above to locate each line. The numbers themselves are in standard Arabic numerals regardless of language.
What to Do If the Numbers Don’t Make Sense
First: check whether your commuting allowance is included in the gross figure or listed separately. Some payslips include it in the total; some break it out. This affects how the deduction percentages look.
Second: if resident tax appears for the first time and you weren’t expecting it, it’s worth confirming the amount with your HR contact. The calculation is standardized, but errors do occasionally appear, and a quick confirmation costs nothing.
Third: if the take-home figure is significantly lower than you expected based on your contract, compare against the deduction breakdown line by line. In most cases the answer is in the numbers — a commuting allowance not yet applied, a first-month proration, or the pension and health insurance combination hitting harder than anticipated.
The ALT salary guide covers the contract structures that affect how these deductions are calculated if you want the full picture on employment versus contractor status.
The Bigger Financial Picture
Understanding your payslip is step one. The next step is making the take-home figure work for you rather than against you.
The save money as an English teacher guide covers the realistic monthly numbers and where most teachers lose ground without realizing it. And if part of your take-home is going overseas every month, the send money home from Japan guide covers how to make sure the exchange rate isn’t quietly taking a cut of every transfer.
Questions about the tax side of your contract — particularly if you’re on an independent contractor arrangement — are covered in the shakai hoken and tax guides under the Finance category.
The practical side of living in Japan is a project in itself. Download the free Japan First 30 Days Checklist to make sure nothing falls through the cracks before or after you land. Enter your email and I will send it to you now.
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