Please find this month’s topics below. We hope they will be useful to you.
▼Taxation (New Tax Rule for Ultra-High Incomes)
Starting from the 2025 tax year, Japan will introduce a new rule to ensure fair taxation for ultra-high-income earners.
• Applies to: Individuals with total income (including separately taxed income such as investment or real estate gains) over ¥330 million
• Rule: If the tax burden on the portion above ¥330 million is 22.5% or less, extra income tax will be charged
If ①<② below, the tax amount payable is ②-①.
• Tax amount on total income
• {Total income amount – Special deduction amount (330 million yen)} x 22.5%
This will affect only a very limited group, but it is important for wealth management and succession planning.
▼Labor Management (Revision of Regional Minimum Wage Rates for Fiscal Year 2025)
The minimum wage system is a framework established under the Minimum Wage Act, whereby the national government sets a minimum wage rate, and employers are required to pay workers wages at or above this minimum amount. The minimum wage for fiscal year 2025 has been set at a national weighted average of ¥1,121, marking the first time all prefectures have exceeded ¥1,000.
The minimum wage must be applied to wages for work performed on or after the effective date of the minimum wage. Note that the effective date varies by prefecture within the period from October 1, 2025, to March 31, 2026 (planned). If a telework system is in place, the minimum wage applicable to the prefecture where the worker’s workplace is located applies, regardless of the location where the telework is performed.
Source: Ministry of Health, Labor and Welfare Special Minimum Wage Website