Japanese withholding tax (源泉徴収) is a system where payers deduct tax under the Income Tax Act and remit to the NTA on the payee's behalf.
Covered income and rates
- **Wages**: monthly table (0–45%) - **Fees** (writing, lecture, design, interpretation): 10.21% (20.42% over ¥1M) - **Contract fees**: case-by-case - **Interest**: 15.315% + 5% local - **Dividends**: 15.315%
Filing/remittance
- Monthly or quarterly (depends on size) - By 10th of following month, or January/July (special deferral) - Annual payment report (源泉徴収票) by end of January
Connection to Invoice System
From October 2023, if payee isn't a qualified issuer: - No input VAT credit - Effectively, the freelancer bears the tax → pressure to cut rates or become taxable
HR SaaS automation
- SmartHR, freee, jinjer auto-calculate withholding - freee / MF Cloud auto-generate 支払調書 when paying freelancer fees