You need to know how to accurately read your Japanese payslip to ensure you understand exactly how much you’re earning and how much you’ve spent.
In Japan, when payday comes, you’ll receive a detailed list of your net earnings. In addition, companies also inform you of the amount you’ve paid in taxes and other expenses. However, differences in work culture can make this process difficult.
In today’s article, Nhat Huy Khang will help you learn how to read and calculate your payslip in the simplest way possible. Let’s follow along!
1. How to Read a Japanese Payslip
How to read a Japanese payslip consists of three main parts:
Most detailed payslips in Japan typically include the following three main sections:
Amounts paid by the company for a month of work (支給).
Deductions (控除) such as insurance, taxes, etc.
Detailed list of working days, hours, and days off (勤怠).
The details of each section are presented below to help you understand how to read a Japanese payslip:
See also the article: Japanese intern salary
1.1. Amounts paid by the company
In this section, you will see what amounts the company has declared paid you for a month of work. The total of all amounts will be your salary received via bank transfer. You can refer to each section to see if it matches the prior agreement between the two parties.
The payments made by Japanese companies to their employees include:
Basic salary: This is the fixed salary you have contracted with the Japanese company. It is paid in full monthly and serves as the basis for calculating overtime pay, severance pay, maternity benefits, and other allowances.
Your position allowance within the company, if applicable.
Allowance for employees with families.
Overtime allowance.
Overtime allowance for night shifts (with higher pay).
Allowance for working on holidays.
1.2. Deductions
In addition to the salary and allowances you receive from the company, you also have to pay back. This is considered a mandatory obligation and also a benefit for you later when working in Japan. In Japanese companies and businesses, this is called deductions, and it usually includes the following:
Social insurance deductions, including: health insurance, pension insurance, and labor insurance. Typically, the company will pay 50% for you, and the remaining 50% will be paid by you. This insurance amount is based on your basic salary; the higher your salary, the higher the insurance.
Personal income tax deductions corresponding to the amount received that month. This includes: Income tax and city tax. City tax is a tax paid to the city, based on your total annual income.
1.3. Number of Working Days, Days Off, and Working Hours
This section summarizes the number of working days and days off you’ve had in a month. Even your exact working hours are listed. This is to ensure you can compare your work with reality and understand how to calculate your salary more clearly. Specifically, this section includes:
A list of all working days according to the company’s regulations.
The number of days you are entitled to and whether you took any leave.
The number of remaining leave days for the year, for your convenience in tracking and considering future leave.
The number of unauthorized leave days is also listed for calculation purposes.
Total overtime hours.
Overtime hours worked at night will have separate bonuses and higher pay.
Late arrival times will also be recorded, indicating supervision and resulting in deductions.
Even leaving work earlier than the scheduled working hours will be recorded.
In addition, Japanese companies sometimes include a monthly bonus. This amount is not fixed and is detailed separately on the overall payslip. Specifically, regarding how to read a Japanese payslip, the bonus is the amount you receive after deductions as mentioned above.
2. Formula for calculating net salary
The formula for calculating net wages for workers in Japan is very simple and easy to understand.
The formula for calculating net wages for Japanese workers is not overly complicated, specifically:
Total wage = Basic salary + Allowances + Bonuses (if any)
Then you calculate net wages = Total wage – Deductions such as insurance and taxes.
Knowing how to read a Japanese payslip will help you better understand your income and benefits at the company.
Thus, the above article has helped you understand how to calculate salary and how to effectively read a payslip in Japan.
Hopefully, this article will provide you with many interesting insights, helping you better understand salary issues in a foreign country. Not to mention, it can also help you recover a significant amount of money if you lose money or if the reality doesn’t match the information on your payslip.
