Are wage earners allowed to subtract necessary expenses incurred for their work from the amount of employment income?

The amount of employment income is calculated by subtracting the amount of deduction for employment income from the gross amount of salaries and wages.

The amount of deduction for employment income is determined by using statutory formula that varies according to the gross amount of salaries and wages. Therefore, the amount of actual expenses incurred in connection with employment is not deductible from the gross amount of salaries and wages when calculating the amount of employment income in principle.

In general, the amount of employment income is directly calculated by using either of the following tables, depending on the year concerned.

For example, if the gross amount of salaries and wages that you earn during the year 2023 is 5,000,000 yen, the amount of employment income will be calculated as follows:

  1. (1) 5,000,000 yen / 4 = 1,250,000 yen
  2. (2) 1,250,000 yen × 3.2 – 440,000 yen = 3,560,000 yen
  3. (3) The amount equal to 3,560,000 yen is the amount of employment income . The difference between 5,000,000 yen and 3,560,000 yen means the amount of deduction for employment income.
Calculation of the amount of employment income (for the year 2020 and after)
Total
earnings (A)
Amount of
employment income
Total
earnings (A)
Amount of employment income
Up to
550,999
0 yen 1,628,000 to
1,799,999
A / 4 = B
(round down fractions less than 1,000)
B × 2.4+100,000
551,000 to
1,618,999
A − 550,000 1,800,000 to
3,599,999
B × 2.8 − 80,000
1,619,000 to
1,619,999
1,069,000 yen 3,600,000 to
6,599,999
B × 3.2 − 440,000
1,620,000 to
1,621,999
1,070,000 yen 6,600,000 to
8,499,999
A × 0.9 − 1,100,000
1,622,000 to
1,623,999
1,072,000 yen 8,500,000
or more
A −1,950,000
1,624,000 to
1,627,999
1,074,000 yen
(note1) When the amount of salaries and wages exceeds 8,500,000 yen, and if any of you, your spouse or dependent living in the same household as you and whose total amount of income for the year concerned is 480,000 yen or less is a person with special disabilities, or if you have a dependent under the age of 23, there is an exemption from the amount of employment income as follows:
10% of the difference between the gross amount of salaries and wages (up to 10,000,000 yen) and 8,500,000 yen
(note2) When you have employment income and miscellaneous income pertaining to public pensions, etc., and if the total amount of employment income (up to 100,000 yen) and miscellaneous income pertaining to public pensions, etc. (up to 100,000 yen) exceeds 100,000 yen, the excess amount is additionally deductible from the amount of employment income.
Calculation of the amount of employment income (for the year 2017 through 2019)
Total
earnings (A)
Amount of
employment income
Total
earnings (A)
Amount of employment income
Up to
650,999
0 yen 1,628,000 to
1,799,999
A / 4 = B
(round down fractions less than 1,000)
B × 2.4
651,000 to
1,618,999
A − 650,000 1,800,000 to
3,599,999
B × 2.8 − 180,000
1,619,000 to
1,619,999
969,000 yen 3,600,000 to
6,599,999
B × 3.2 − 540,000
1,620,000 to
1,621,999
970,000 yen 6,600,000 to
9,999,999
A × 0.9 − 1,200,000
1,622,000 to
1,623,999
972,000 yen 10,000,000
or more
A − 2,200,000
1,624,000 to
1,627,999
974,000 yen