Will resident tax expose my side-business income to Co-workers? How do I pay separate Juminzei for business income?

When you start your second job or business while working, your Juminzei(住民税) as Resident Tax will increase, which may reveal you have another job to your co-workers.

In this issue, we will tell you how to pay only the Juminzei(住民税) on profits earned from your business and other taxes separately.

The danger of your side business being discovered through Juminzei(住民税)

Tax Service Related to Japanese Laws

There are many possibilities that your side business will be found out from the Juminzei.
This is what it looks like (the numbers are appropriate).

Suppose your annual income is 3 million yen(300万円).
Your Juminzei would be about 120,000 yen.

Most of you pay your Juminzei through your company.
The company in charge of general affairs understands that your Juminzei is 120,000 yen.

Suppose that your salary is still 3 million yen in the following year.
However, your Juminzei bill would be about 180,000 yen.
Hypothetically, this 180,000 yen Juminzei bill would mean your assumed annual income would be 4 million yen.

In most cases, the general affairs department will check the Juminzei for the previous year before making payment.
The PIC will notice that the Juminzei has changed even though your annual income has not changed.

This is where the company or people at your workplace get the possibility that you have earned about 1 million yen outside the company.

If your boss calls you in, he or she will ask you how you got the money and may tell you to stop your side business even though it is acceptable to society.

The danger of workplace jealousy.

Tax Service Related to Japanese Laws

If your workplace is understanding, that may be fine.
However, there are many chains in the workplace.
There may be jealousy, and not everyone may look at you in a good light.

You want to lower your risk at the workplace as much as possible.
Just because you are planning to start a second job or business doesn’t mean you want to turn against the company.
Most people want to go quietly.

However, from the standpoint of running an organization, it may be challenging to look good because of information leaks or employee fairness in Japan.

This is why paying separately the Juminzei on income at the workplace via the workplace and the Juminzei on your business is better.

Leave the payment via the workplace, but pay the extra by yourself.

Perhaps in response to many requests for a countermeasure against this kind of side job exposure, paying Juminzei on the amount you earn separately from the company’s Juminzei is possible.
The above was an example of a side job, but a similar situation can also occur in stock trading. Let’s take a look at the specific method.

Specific Methods

Tax Service Related to Japanese Laws

When filing your income tax return, you can split your tax with your company’s Juminzei.

The criteria for splitting are as follows

  • Salary and public pension
  • Others

So, the company’s salary is paid through the company as usual (it is called Tokubetsu Choushu[特別徴収]).
If you wish, you can take measures to prevent your workplace from knowing how much you earned by yourself by selecting “Pay by myself(Zibun de Noufu[自分で納付])” as shown below.

Aki Japan Tax Consultant Office -Simplify Japan Tax- | Will resident tax expose my side-business income to Co-workers? How do I pay separate Juminzei for business income?

It is straightforward; all you have to do is put a “◯” on the box.
If you are concerned about this, please select “pay by myself(Zibun de Noufu[自分で納付])” for residential tax, business income, etc.

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