🇯🇵 COUNTRY A Japan VS 🇨🇳 COUNTRY B China

Japan's inhabitant tax (jūminzei) is a 10% flat tax on income levied by prefectures (4%) and municipalities (6%), in addition to national income tax. It is calculated on the prior year's income and paid in installments the following year — meaning new arrivals pay no inhabitant tax in their first year but face a double payment in year two. At ¥10M salary, inhabitant tax is approximately ¥700,000–¥900,000/year. It applies to all residents registered in Japan on January 1 of the assessment year.

Prior to 2022, foreign professionals in China could claim tax-free allowances for housing, meals, language training, children's education, and home leave — reducing taxable income substantially. The 2019–2022 reform phased out most of these foreigner-specific allowances, bringing foreign nationals under the same individual deduction system as Chinese nationals (standard deduction CNY 60,000/year plus additional deductions for education, housing loan interest, etc.). The transition effectively increased the tax burden for many mid-to-high earning expats. Some allowances for specific visa categories and treaty provisions remain, but the broad foreigner advantage is significantly reduced.

For short-term assignments (under 5 years in Japan, under 6 years in China), both countries' non-resident or limited residency rules can shelter foreign-source income. Japan's non-permanent resident status (under 5 of last 10 years) means foreign-source income not remitted to Japan is untaxed — very valuable for expats with offshore investments. China's 6-year rule is similarly generous for shorter assignments. On pure take-home from local salary: China is marginally cheaper at $80,000–$120,000. Japan offers superior quality of life, stability, and career brand for most Western professionals. For investment banking and tech at high salaries ($150K+), the gap narrows and Japan's non-permanent resident protection becomes more valuable.

Japanese employees contribute to four main social insurance schemes: Kosei Nenkin (employees' pension) at 9.15% of standard monthly remuneration; Kenpo (health insurance) at approximately 5.02% (varies by health association); Koyo Hoken (employment insurance) at 0.6%; and from age 40, Kaigo Hoken (long-term care insurance) at approximately 0.9%. Total employee contributions are approximately 14.4–15.3% of salary. There are contribution ceilings: the pension ceiling is approximately ¥650,000/month standard remuneration; health insurance ceilings vary. At annual salary of ¥15M, the effective social contribution rate falls to approximately 8–10% due to these caps.