The ¥200,000 Side-Income Rule in Japan

Last updated: 6 October 2026 · figures for the 2026 tax year (令和8年分)

If you have one employer and your side income comes to ¥200,000 or less for the year, you do not have to file a final tax return (確定申告) for it. That is the whole of the rule. It is not a tax exemption: resident tax (住民税) still counts the income and your municipality expects to be told about it, and if you file a return for any other reason — a medical-expense claim, say — the side income has to go on it too.

What the rule says

The National Tax Agency lists who has to file even though their employer settles their tax at the year-end adjustment (年末調整). One line covers side income: somebody paid by one employer, with all of the salary subject to withholding, has to file if their income other than salary and retirement income comes to more than ¥200,000. At ¥200,000 or less, the obligation to file does not arise. The same page says anyone whose salary is over ¥20,000,000 has to file regardless, so the rule is for ordinary salaries.

Three details decide whether you are on the right side of it.

• It is income, not takings. For freelance work paid as a fee (miscellaneous income, 雑所得, which is what this page assumes), income is what you were paid minus the expenses of earning it.
• It is the total. Every kind of income other than salary and retirement income is added together: a translation job, a few online sales, rent from a room. Some investment income is left out — listed shares in a withholding account (源泉徴収あり) where you do not file, and bank interest, among others.
• It assumes one employer. A second job on a payroll is salary, not side income, and it has a test of its own (below).

Resident tax has no ¥200,000 rule

Resident tax is calculated by your municipality on the whole of last year’s income. It has no threshold under which side income is left out. Yokohama City puts it plainly: where the total is ¥200,000 or less, an income tax return is in principle not needed, but a resident-tax declaration is. Its English page gives the general rule — everybody living in the city on 1 January declares last year’s income, except those who filed an income tax return and those whose only income is a salary the employer has reported.

The declaration (住民税の申告) goes to the city or ward office, by 15 March. It is shorter than a tax return. If you file an income tax return, you do not file this as well: the return is passed on to the municipality and counts as the declaration.

What it costs, on a real salary

On a ¥5,000,000 salary in Tokyo, the calculator on this site puts the year’s income tax at ¥91,600 and the resident tax at ¥243,000. Add side income and the same engine gives:

Resident tax takes 10% of the extra either way. Below the line no return is required, so no further income tax is asked for; above it, all of it is taxed, not only the part over ¥200,000. That is why one yen makes ¥12,600 of difference between the second and third rows. The ¥300,000 case costs more than 5% because it carries this salary across the ¥1,950,000 band where income tax steps from 5% to 10%.

The line is a filing rule with a cliff at it, not an allowance. If your side income is close to ¥200,000, the expenses you can properly set against it decide which side you land on, so keep the receipts. And a year that goes over is taxed in full, which is worth knowing before the last job of December rather than after it.

Tax already taken off a fee

The table assumes nothing was withheld from the side income. Some kinds of fee — for writing or for giving a lecture, among others — have income tax taken off when they are paid: the National Tax Agency sets it at 10.21% of a payment of up to ¥1,000,000. The ¥200,000 rule does not stop that, and it does not give the money back. Tax withheld at source is refunded only on a return, and a return has to include all of the side income, so work out both before deciding to file.

Two jobs on payroll

A second job paid as salary is covered by a different line of the same National Tax Agency page. Only one employer can do your year-end adjustment; the other withholds at a higher rate and settles nothing. You have to file if the pay from the employer that did not do the adjustment, plus your other income, comes to more than ¥200,000 — with a narrow exception for low total pay. Most people with two payroll jobs end up filing.

When you file anyway

The rule only tells you when you are obliged to file. It does not let you leave the side income off a return you file for another reason. The National Tax Agency answers exactly this: somebody filing to claim the medical-expense deduction (医療費控除) has to report the side income of ¥200,000 or less along with the salary. The same goes for any refund claim. Weigh the deduction against the tax the side income then adds.

Questions people ask

Is side income under ¥200,000 tax-free in Japan?

No. The rule only means you do not have to file an income tax return for it. The income is still part of your resident tax, and a return you file for another reason must include it.

Is the ¥200,000 my sales or my profit?

Profit: what you were paid minus the expenses of earning it. For an employee with one job, it is the total of all income other than salary and retirement income, not each source on its own.

What if my side job is a second part-time job?

Then it is salary, and a different test applies: the pay from the employer that does not do your year-end adjustment, plus any other income, counted against ¥200,000. Two jobs on payroll usually means a return.

This is a general explanation, not legal or tax advice. Whether income is miscellaneous or business income, what counts as an expense, and your visa’s conditions on outside work are all questions for your tax office or a 税理士 (licensed tax accountant). The figures assume one employer, miscellaneous income, and no other deductions.

Sources

• National Tax Agency — No.1900 給与所得者で確定申告が必要な人 [令和8年4月1日現在法令等] (the ¥200,000 line, two employers, the ¥20,000,000 salary, and the investment income that is left out). Japanese.
• National Tax Agency — No.1900 Q&A 確定申告を要しない場合の意義 (a return filed for a medical-expense refund must include side income of ¥200,000 or less). Japanese.
• National Tax Agency — No.2795 原稿料や講演料等を支払ったとき [令和8年4月1日現在法令等] (income tax withheld from writing and lecture fees when they are paid, 10.21% up to ¥1,000,000). Japanese.
• Yokohama City — Municipal tax (who declares income to the city, and who does not need to). English. The Japanese page 市民税・県民税の申告について states the ¥200,000 point and the 15 March deadline.

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