How to calculate amount of Corporation tax, income tax of representative director, social insurance premium

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In the case you operate a company in Japan, your company needs to pay several kinds of tax in Japan.

Corporation tax
Corporation resident tax
Corporation business tax etc..

And if you (representative director) receive salary or bonus, you need to pay income tax, resident tax etc..

It needs to submit tax filing within two months from end of each fiscal year and pay tax.

Assumed that
Sales amount of your company is 7 million yen
Rental fee 1 million yen
Your salary 5 million yen
Profit of your company 1 million yen

①Amount of corporation tax (hojin zei) = Profit of corporation × corporation tax rate.
1 million yen × 15% = 150000 yen….(1).

②Local corporation tax (chiho hojinzei. national tax) = 150000 yen × 4.4% = 6600 yen…(2)

③Corporate resident tax (hojin jumin zei)

In the case your company is located in Tokyo prefecture, rate of corporate resident tax is 12.9%.

150000 yen (amount of corporation tax)× 12.9% = 19350 yen……..(3)

And your company also need to pay fixed amount of 70,000 yen….(4)

As for this amount, even if there is not profit on your company, it needs to pay (4).

④Corporate business tax (hojin jigyo zei).

1 million yen × 3.4% = 34000 yen (corporate business tax (local tax))….(5)

⑤34,000 yen × 43.2% = 14688 yen………local corporation special tax (chiho hojin tokubetsu zei. national tax)……(6)

⑥Regarding your personal tax

⑦5 million yen (salary) × 20% + 540,000 yen = 1540000 yen (salaried income deduction)

5 million yen (salary) – 1540000 yen (salaried income deduction) = 3460000 yen ( taxable income = kazei shotoku )

3460000 yen – 380000 yen (basic deduction) = 3,080,000 yen…….(7)

⑧Resident tax (juminzei) for individual

Fixed amount 4000 yen…….(8)

⑨Rate of your resident tax…10%

⑩5 million yen (salary) – 1540000 yen (salaried income deduction) = 3460000 yen ( taxable income = kazei shotoku )

⑪3,460,000 yen ( taxable income = kazei shotoku ) – 330000 yen (basic deduction for resident tax)=3130000….(10)

⑫Regarding social insurance premium ( shakai hoken ryou)

⑬As for employee’s Health insurance(Kenkou hoken. Not Kokumin kenko hoken)

⑭Average monthly salary is 416,000 yen (5 million yen ÷ 12 months)

416000 yen × 9.97% = 41475 yen……….(12)

Your company and you (employee) divide this amount even.

⑮41475 yen ÷ 2 = 20737 yen(company)
41475 yen ÷ 2 = 20737 yen(employee)

⑯As for employee’s pension (kosei nenkin)

⑰Average monthly salary is 416,000 yen
So, 416000 yen × 18.3% = 76128 yen……….(14)

Your company and you (employee) divide this amount even.

76128 yen yen ÷ 2 = 38064 yen(company)
76128 yen yen ÷ 2 = 38064 yen(employee)

⑲As for labor insurance (koyo hoken), director can not enroll.

⑳Now, you have found out amount of social insurance premium and you can deduct this amount from your taxable income.

㉑Regarding income tax:3,080,000 yen (7) – ((20737 + 38064)× 12) = 2374388 yen….(17)

(17)×10%(income tax rate) – 97,500 yen ( statutory amount ) = 139938 yen…..(18)
This is your income tax amount.

㉓Regarding resident tax for individual

㉔3130000 yen(10) – ((20737 + 38064)× 12) = 2424388 yen …….(21)

(21) × 10% = 242438 yen
This is amount of your resident tax.

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