Using the same assumption set in the column (2) of this subject, social insurance taxes for a calendar year are estimated as follows;
Annual total compensation ¥8,000,000 (salary ¥6,600,000 / Bonuses ¥1,400,000)
Average Monthly Compensation: ¥550,000 (¥6,600,000 /12 months)
Welfare Pension Insurance Tax:
¥550,000 × 18.3% × 1/2= ¥50,325/month
(A)Welfare Pension Insurance Tax for a year is amounting to ¥603,900 (¥50,325 × 12)
Employment Health Insurance Tax:
¥550,000 × 10% × 1/2 = ¥27,500/month
(B)Employment Health Insurance Tax for a year is amounting to ¥330,000 (¥27,500 × 12)
Unemployment Insurance Tax:
¥550,000 × 1% × 1/2= ¥2,750/month
(C)Unemployment Insurance Tax for a year is amounting to ¥33,000 (¥2,750 × 12)
Total social insurance taxes for a year:
(A) + (B) + (C) =¥966,900
The estimated National/Local income taxes is amounting to ¥940,500 based on the same assumption, so the total income taxes and social insurance taxes for a year is amounting to ¥1,907,400.
The combined effective income taxes/social insurance taxes rate is 23.84% (¥1,907,400/¥8,000,000)
Please be advised that there are maximum social insurance premiums for a month. So, the maximum premiums for a year are amounting to around 1,500,000 yen.
(F) Inheritance/Gift tax
Under the Japanese Inheritance/Gift tax law, heir/donee is subject to Inheritance/Gift tax on assets inherited/gifted. Non-Japanese nationals who are residents in Japan for Japanese tax purposes are subject to Inheritance/Gift tax when they receive assets inherited/gifted even if these are located outside of Japan.
Exception to this rule is for the non-Japanese nationals fall under “short period resident heir/donee” with 10 years or less resident period in 15 years before inheritance/gift, who stay in Japan with qualification of stay listed in the Appendix 1 of Immigration Control Law. The qualifications consist of a university professor, management of a company, medical doctor, researcher, non-Japanese language teacher, and secondee from non-Japanese companies (so-called “Expatriate”), etc.
They are subject to Inheritance/Gift tax on the assets inherited/gifted, which are located only in Japan.
Inheritance tax is calculated as follows;
(a)Total assets of a decedent are divided into each heir based on the legal inheritance rate.
For instance, if heirs are a spouse and two children, the rates are 50% for the spouse and 25% for one child.
(b)Inheritance tax for each heir is calculated based on the divided assets and inheritance tax rate for the assets value. Inheritance tax rates are progressive rates. For instance, if the divided assets value is 50 million yen, the inheritance tax is amounting to 8 million yen (10 million × 10% + 20 million × 15% +20 million × 20%).
(c)Inheritance tax for each heir is aggregated to come up with total inheritance tax.
(d)The total inheritance tax is allocated to each heir based upon the value of assets which the heir actually receives.