Will the company pay for your residence? Housing and Rent Subsidy Programs in Japan


For foreigners, finding a place to live in a foreign country or region where they do not know the conditions for renting and are not familiar with the area can be a challenge. In Japan, some companies have a program to support the housing of their employees, which can be a great help for foreign employees. Particularly in many IT companies, which are facing a shortage of human resources, are focusing on a program to support housing and rent as part of their benefit package for employees. In this article, we will explain how this program, which reduces the burden of housing costs from an economic point of view.

Contents


Each company can have its own housing and rent subsidy program

The housing and rent subsidy programs are set up by each company to help employees with their housing expenses, and are not legally set in a uniform manner. The conditions differ from company to company, and of course some companies do not have a program.

According to the Ministry of Health, Labor and Welfare (MHLW), 45.8% of all companies provide some form of housing benefit. However, a higher percentage (56.0%) of companies in IT-related and telecommunications industries provide housing benefits.

When you compare terms and conditions for choosing a company, you need to consider not only the salary amount, but also whether the company has a good housing subsidy program. If you are a foreign IT engineer who would like to change jobs in Japan using the housing subsidy program, register with GitTap, a job site for foreign IT professionals. Start by signing up.

Examples of housing and rent subsidy programs


There are several patterns of housing and rent subsidy programs in Japanese companies. We will discuss and explain some of the most typical cases of these housing subsidy programs.

1.Rent subsidy (housing benefit)

Rent subsidy (housing benefit) is the most common type of housing subsidy program in which the company provides a portion of the employee’s housing cost as a benefit. For example, if an employee is living in a rented house, the company will subsidize a percentage of the rent, or subsidize the mortgage of the house the employee owns. The conditions and amount of the subsidy will vary by company, so be sure to check the conditions carefully when signing the labor contract.

Payment conditions and amount

For example, there are many cases where the company provides rent subsidies with conditions such as “X yen per month will be paid to the employee who lives within X kilometers of the company,” “the employee must live in a place where they can commute to the company within X minutes,” or “the employee must live within X stations of the nearest station to the company.” There are also companies that require a certain number of years of continued service, such as “X number of years of service with the company” as a condition for payment.

In some cases, you must be the contractor or head of household of the rental property. For example, if you are living with your girlfriend or sharing a room with a friend, and you are not the contractor or head of the household, you should check beforehand if you are eligible for the benefit.

The amount to be paid varies by company. For example, in many cases, the company will set a percentage of the rent to be paid, such as “50% of the rent”, and then the maximum amount is set.

Overall, the amount paid is decreasing, but the amount paid in the IT sector is higher than the average.

According to the Comprehensive Survey on Working Conditions (FY2015) by the Ministry of Health, Labor and Welfare, the average monthly housing benefit per person is 17,000 yen. Overall, the amount of housing-related benefits is on a downward trend in the cost of benefits provided by companies (results of the Japan Business Federation’s FY2018 survey on employee benefit costs), but in the IT-related and other telecommunications industries, the amount is 25,312 yen per month, much higher than the average. This reflects the recent trend of a shortage of human resources in the IT industry, and shows that more companies are increasing the benefits of housing benefits in order to bring in talented people.

2.Rented company housing

Rented company housing is a program in which the company rents a property and the employees live in the rented housing. The employee pays a portion of the rent, but the company subsidizes a certain percentage of the rent, so the employee can live in the housing at a lower cost than renting on their own. Also, since the company signs the lease contract, employees do not have to sign the contract themselves. This is also a great advantage for foreign employees, as it saves them the trouble of searching for a room.

In the past, it was common for companies to rent out entire apartments or condominiums on a large scale and then rent each unit to employees, but recently, there are more cases where employees themselves search for a property that meets their requirements and rent it under the company’s name.

3.Employee dormitory

An employee dormitory is a facility or building provided by a company for employees to live in. In some cases, the rooms are equipped with furniture and appliances, and meals are provided. In most cases, the rent is reasonable and includes food and other expenses, allowing you to save on living expenses.

However, due to the difficulty of maintaining privacy among employees, employee dormitories have tended to be shunned in recent years. In addition, many employee dormitories were built during the period of rapid economic growth and have become decrepit, so the number of companies with employee dormitories is on the decline.

The size and layout of the housing to be provided

In most cases, the size and layout of rented company housing and employee dormitories are provided according to the number of people in the household, whether they are single or married with a family.

For example, rented company housing/employee dormitory provided for single employees are usually single-room, 1K, or 1DK layouts with room sizes ranging from 6 to 8 tatami mats (10m2 to 14m2). On the other hand, rented company housing/employee dormitory for a married employee and their families of three to four people generally have floor plans of around 2DK to 3LDK (19.4㎡ to 23.4㎡).

Comparing the above-mentioned benefits from 1 to 3, it should be noted that in the case of 1, rent subsidies are provided in addition to the monthly salary and are subject to taxation due to the increase in total income, which also increases the tax and insurance cost for employees. On the other hand, in the case of 2 (rented company housing) and 3 (employee dormitory), a certain amount of rent is deducted from the salary and paid to the company, so there is no increase in the employee’s own tax payment or insurance cost.

Summary

Especially when you start working in a new place, you will want to keep your expenses as low as possible until your job is on track and your life is stable. By using subsidies such as rent subsidies (housing benefits), rented company housing, and employee dormitories, you may be able to reduce your rent burden and successfully keep the cost of living in Japan down.

When researching employment in Japan, be sure to check whether there is a housing subsidy system. Also, since the criteria vary from company to company, check with your personnel officer for details on the conditions of those subsidies.

The post Will the company pay for your residence? Housing and Rent Subsidy Programs in Japan first appeared on GitTap BLOG.

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This section explains what procedures and visas are required in order to work as an IT engineer in Japan. These procedures are very complicated and are divided into two categories: those to be completed before entering Japan and those to be completed after entering Japan. In addition, it takes time from the moment you apply to the moment you receive the results of your application, so you need to allow plenty of time for the process. In this article, I will introduce the smoothest and most common procedure. For exceptions and details, please refer to the links provided. What you can learn from this article Required Procedures First, you need a passport and a visa to enter Japan. Then, in order to work in Japan, you need to obtain a residence card that proves your status of residence. We will explain the definitions of visa and residence status (= residence card). About Visa A visa proves validity of your passport that you present at the airport to prove that you can enter Japan. It must be issued by the Japanese embassy or consulate in your home country (or the country in which the applicant is staying). The issued visa will be affixed to the passport. In principle, the visa is valid for one entry only. It is valid for a period of three months from the date of issue. And the applicant must pass an immigration inspection in Japan within this period.Reference link: Ministry of Foreign Affairs of Japan – Variety of Visa Apply for a working visa In order to work as an IT engineer, you will need a “working visa” for the purpose of long-term stay and employment. In the case of IT engineers, the “Technical, Humanities, and International Services” category of working visa is applicable. Step 1: Apply for Authorization of Resident Eligibility In order to apply for a working visa, one of the required documents is an “Authorization of Resident Eligibility“. 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2024/6/6

Job seeker (IT engineer)

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However, Japan’s consumption tax rate is not particularly low, as it is 10% or lower in other Asian countries that are members of ASEAN. Income Tax Income tax is a tax on personal income. The higher the income, the higher the tax rate (progressive tax rate), and depending on whether you are a resident or a non-resident, the different taxes and deductions you are entitled to. The definitions of resident and non-resident are as follows. How to calculate income tax Total income (the sum of all income earned) ↓Subtract 15 types of income deductions ↓Multiply taxable income (minus deductions) by the tax rate ↓Income tax The first item, total income, is different for residents and non-residents. In the case of residents, a foreign tax credit is applied to prevent double taxation of income earned abroad and income earned in Japan. This credit is available mainly in OECD countries.Reference link: Ministry of Finance website (*in Japanese) The taxable income tax that needs to be paid by foreign workers living in Japan depends on the following three categories. Income deduction for non-residents is different A deduction is a reduction in the amount of tax you pay. For residents, there are 15 different deductions. Here are three deductions as examples. Medical expenses deduction Subtract 100,000 yen from the amount you paid as medical expenses, and you will receive an income tax deduction for that amount. Casualty loss deduction In case of loss due to fire, theft, etc., a certain amount of income tax can be deducted. Spousal deduction If a taxpayer has a spouse who is eligible for exemption under the Income Tax Act, the taxpayer is entitled to a certain amount of income tax deduction. Residents are entitled to 15 different deductions, while non-residents are limited to three deductions. For non-residents, there are only three deductions: basic deduction, contribution deduction, and casualty loss deduction. Basic exemptions An income tax deduction that can be deducted based on the taxpayer’s total income. Contribution deduction An income tax deduction allowed when taxpayers make donations to the national government, local governments, specified public service promotion corporations, etc.Reference link: National Tax Office (*in Japanese) Income Tax Table (2021) This is a tax table for determining your income tax. Since Japan has a progressive taxation system, the higher the salary, the higher the tax rate. If your total taxable income is 8 million yen, the tax amount will be as follows.8,000,000 yen × 0.23 – 636,000 yen = 1,204,000 yen How to pay income tax If you work in a companyIncome tax will be subtracted from your salary beforehand, and the company will pay the tax to the tax office on your behalf. This is called tax withholding. If you do your own businessYou are required to calculate your income and tax amount for the year by yourself and report it to the tax office. This is called final tax return. Inhabitant Tax Regardless of your nationality, if you earn more than a certain amount of income, you are required to pay this tax to the prefecture or municipality where you live. If the inhabitant tax is not paid, your application for extension of stay may not be approved. As with income tax, there are two ways to pay the tax: special collection, in which the company deducts the amount of tax in advance and pays it, and ordinary collection, in which you pay the amount written on the payment slip at a financial institution. How to calculate inhabitant tax The inhabitant tax rate is 10% of taxable income in a single uniform manner. There are two types of inhabitant tax: municipal inhabitant tax and prefectural inhabitant tax. The municipal inhabitant tax is a uniform 6%, and the prefectural inhabitant tax (based on income) is a uniform 4%, for a total of 10%. In addition to this, the inhabitant tax is the sum of the per capita tax. The inhabitant tax on per capita basis is 3,500 yen for municipal tax and 1,500 yen for prefectural tax, for a total of 5,000 yen. About Furusato (hometown) Taxation Hometown taxation is one of the income tax deductions mentioned above, which allows you to donate to the local government you want to support. In return for your donation, you will receive local specialties. There are various types of gifts such as meat, rice, fruits, seafood, etc. Advantages of Furusato (Hometown) Taxation The biggest advantage is that when you make a donation, you can deduct 2,000 yen from the donation amount and have that amount deducted from your inhabitant tax for the following year. In other words, you can pay next year’s inhabitant tax in advance, and in addition, you can purchase special products from the municipality you donated to. For example, if you donate 50,000 yen, you are paying 2,000 yen out of your own pocket and paying 48,000 yen of inhabitant tax in advance. Note・Please note that the maximum amount of deduction will differ depending on your total income and family members. Run a simulation on a portal site or the like to know the amount within the range of tax deductions.・In order to receive a tax deduction, you need to file a tax return. Let’s start using the one-stop system If you are a salaried employee and donate to less than five municipalities, you do not need to file a tax return. First, choose the one-stop special system when you make your donation. Then, submit an application for the one-stop special system, and the local government will file your tax return on your behalf. When you submit the application form, you will need to submit identification documents such as a copy of your driver’s license. In other words, Furusato Taxation is a system that allows you to pay taxes in advance through donations, and in addition, receive gifts from local governments. It is a great way to learn about the charms of various regions in Japan through local specialties. Please find a region you would like to visit in the future, or a special product you are interested in, and try to use it.Reference link: About One-Stop Special System Summary In this article, I explained the basic types of taxes, how to determine the amount, and hometown taxes. If you forget to pay taxes, such as the inhabitant tax, it may affect your period of stay in Japan. If you work for a company, the tax is deducted from your salary, so you won’t have to pay it by yourself, but it is important to understand and be aware of it. In addition, there are mechanisms such as hometown taxation that allow you to learn about the charms of various regions while paying taxes, so please make use of them to enhance your life in Japan.The post 【For foreigners】Let’s learn about taxes and hometown tax donation program to fully enjoy Japan! first appeared on GitTap BLOG.