Salary, Taxes, and Insurance

Salary
    
tile-yenAs a regular Interac ALT, you will most likely qualify for a gross salary of between 230,000 and 250,000 yen per calendar month. National income tax and employment insurance is automatically deducted each month; however, city tax and health insurance are not. National income tax is less than 10% of your monthly salary.

In line with Japanese business practices, your salary is deposited into your account on the last day of the following month. For example, your April salary is paid at the end of May. When payday falls on a weekend or national holiday, the salary is deposited into the account on the previous business trading day. Depending on the starting date, the first salary will be received approximately six to eight weeks after you start employment.

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You will need to open a Japan Post Bank account when you begin working for Interac. Opening this account is especially important to do when you first arrive as it may take our payroll department some time to register your details in our system. Everything you need to open your bank account will be provided to you during initial orientation and training.


Allowances

Generally, all work-related transport expenses are reimbursed monthly with your salary payment. This does not include flights to or from your home country.

In some cases, depending on where you are living and working, as well as the type of position, an additional allowance may also be paid.


Proration

Salary for the calendar months of August and December is prorated at 50% and 75%, respectively. This is to reflect the fact that, for a portion of these months, you will be either on summer or winter vacation and will not be working. Because of the nature of the pay cycle as explained above, this proration is reflected in the salary payments deposited in September and January.

It is also important to note that, in the first month, usually April or September, and the last month of your contract, usually March, it is unlikely you will be working for the whole month. Therefore, the salary payment is likely to be prorated to reflect this.


Income and Consumption Tax

In Japan, the main types of tax you will have to pay are income and residence tax. A 8% consumption tax is charged on all purchases, although this is usually included in the price shown. If not, companies are required to clearly disclose this. There are also taxes for owning cars and property, but these rarely impact Interac ALTs.

Income tax in Japan is determined by your status of residence, source of income, and total taxable income earned. It will be automatically deducted from your salary on the basis of expected earnings.

For information regarding tax responsibilities in your home country while you are living and working in Japan, please contact the relevant tax authorities.



Residence Tax

You are required to pay residence tax if you have been living or plan to live in Japan for more than one year. Therefore, if you are employed by a company, you will be required to pay. You should pay tax to the municipality in which you were living in on the 1st of January. You are responsible for paying the residence tax, so we do not deduct it from your salary.

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Health Insurance

tile-health-insurance-cardAll people living and working in Japan are required to be enrolled in a Japanese government approved health insurance program. In most cases, you will need to be enrolled in Japan’s National Health Insurance (NHI) system, to which you are responsible for enrolling in and making payment. NHI affords you comprehensive coverage in the event of illness or injury. In most cases, 70% of the medical expenses will be covered by NHI, with the remaining 30% falling to you to cover. In your first year, premiums could be as low as 3,000 yen per calendar month. In the second and subsequent years of employment it is likely that this fee will increase as it is based on your level of income in the previous year. More details about NHI will be made available and explained to you during the recruiting process.

In approximately 10% of cases, an Interac ALT is required to be enrolled in Japan’s Social Insurance (SI), rather than in National Health Insurance. The structure of SI is a little different to NHI and the monthly premium is more. If this is applicable to you, you will be notified of the details when you are offered your placement.


Additional Health Insurance

Interac has available to you an additional health care plan over and above NHI that you can choose to subscribe to. This plan is not a Japanese government approved health insurance program, so it is in addition to NHI. The main difference when compared with NHI is that you must pay 100% of the cost of care in the event of illness or injury. However, 100% of the cost will be reimbursed upon application to and approval of the insurance provider.

This plan also has benefits that are not included in NHI. For example, in the event that you die as a result of an accident or illness in Japan, the cost to prepare and transport your body, mortal remains, or ashes to your home country will be covered up to a certain value.

The cost to subscribe to this plan starts from 6,800 yen per calendar month. Full details, including the policy statement, will be provided to you during the initial orientation and training.


Life Insurance

We strongly advise all new Interac ALTs, prior to arriving in Japan, to consider purchasing a life insurance policy that makes provision in the event you die as a result of an accident or illness in Japan. The cost to prepare and transport your body, mortal remains, or ashes to your home country, as well as a funeral can be in excess of US$50,000 / GB£35,000. If you are uninsured the burden on this cost will fall upon your family.


Employment Insurance

All people working in Japan will automatically be enrolled in the Japanese employment insurance scheme. This affords you insurance cover in the unlikely event you are made unemployed while under contract with Interac. You can expect to have around 1,500 yen per calendar month deducted from your salary to cover this.


Other Insurance

You are encouraged to consider your insurance requirements over and above the insurance types mentioned on this page. Such consideration should be given to insuring household items, such as furnishings and electronics, and travel insurance for your journey to and eventually from Japan as well as any other travel you may do. NHI or additional health insurance purchased in Japan does not routinely cover you if you become ill or have an accident outside of Japan, unless it is clearly stated in the policy document.