🇯🇵 COUNTRY A Japan VS 🇦🇺 COUNTRY B Australia

Japan levies two layers of income tax: national income tax (shotoku-zei) at progressive rates of 5–45%, and residence tax (jumin-zei) at a flat 10% charged by your prefecture and municipality. Unlike Australia which has a single federal rate, every Japanese resident pays this flat 10% on top of national tax. At ¥10M income (~$63K USD): national tax ~20%, municipal tax 10% = 30% combined income tax. At ¥20M (~$127K USD): the national marginal rate is typically 33%, municipal 10% = about 43%. At ¥30M (~$190K USD) the national marginal rate is typically 40%, municipal 10% = about 50%; the 45% national rate applies only to taxable income above ¥40M, so 55% combined is reached only at very high incomes (before the 2.1% reconstruction surtax). The municipal tax is assessed on the prior year’s income and paid the following year: employers normally deduct it from salary in 12 monthly amounts from June to May, while people paid directly (freelancers, those between jobs) are billed in four instalments (June, August, October and January), creating a significant cash-flow obligation when you first earn high income in Japan.

Japan introduced a departure tax in 2015 for individuals holding financial assets exceeding ¥100 million (approximately $634K USD at about ¥157.7 per USD, ECB reference rate of 2 October 2026). If you have lived in Japan for more than five of the previous ten years and leave holding shares, investment trusts, derivatives, or other qualifying financial assets worth ¥100 million or more, those assets are treated as sold at market value on your departure date and the unrealised gains are taxed (national income tax is generally cited at 15.315% including the reconstruction surtax; check with the NTA or an adviser whether local tax also applies). The tax does not apply to real estate, business assets, or life insurance policies. It is designed to prevent high-net-worth individuals from emigrating to avoid Japanese capital gains tax on investment portfolios built up during Japanese residency.

Both systems are compulsory retirement savings vehicles but work very differently. Australia’s superannuation requires employers to contribute 12% of ordinary time earnings (increased from 11.5% from 1 July 2025) into a worker’s individual super fund. Earnings inside super are taxed at 15% (concessional rate) and withdrawals after age 60 are tax-free for most people. Japan’s kosei nenkin (employee pension) is a defined-benefit style system where both employer and employee contribute ~9.15% each; the eventual benefit depends on years of contribution and average salary. Australian superannuation provides more individual ownership and investment choice. Japan’s pension provides more predictable government-backed income. For internationally mobile workers, Australia’s super is generally more portable.