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Payroll in Japan Calculator - Company Housing

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The Company Housing Calculator shows the amount of benefit for both the employee and the company when housing is provided to the employee.

Company Housing in Japan gives tax and social insurance costs savings to both the employee and company when housing is provided to the employee. The lease agreement is made between the employer and property owner and the employer bears the cost of the rent.

When calculating the savings, the percentage method is commonly used to get an approximate. A legal rent rate of 10% is applied. The valuation method follows a formula decided by the National Tax Agency: [(0.20%)*Allocated Taxable Base of House]+[(0.22%)*Allocated Taxable Base of Land]+[12/(3.3)*Floor Space]. In Japan, tsubo is used for measurement of floor space. 1 tsubo = 3.3m2

HTM's payroll service includes an employee housing system which tracks employee apartment leases held by the company, including fees, deposits, monthly rent payments, and payments required by the employee.
For percentage method the employee amount is 10% and for director it is generally 50%. If a director uses his home as an office the amount is 35%. Valuation method is more accurate but requires exact amounts of the fields below.
House, land and floor space valuation rates are different between employee and director
Commuting via train/bus is non-taxable up to a limit of JPY100,000. Commuting via car/bicycle has a non-taxable limit of allowance which varies with the commuting distance
Different prefectures have different health insurance rates
These numbers can be obtained from the annual fixed asset tax invoice or at municipal offices
Type of industry affects long-term care insurance and employment insurance rates. Insurance rates are higher in a work industry that entails higher risk
Specification of industry with higher risk will command a higher accident insurance rate
The greater the number of dependents, the lesser the national tax withholding and inhabitant tax amount
Employees aged 39 or below are not applicable for long-term insurance. Employees aged 65 or older are not applicable for long-term care insurance and employment insurance
Useful life of house is applicable for directors only. The amount is determined by the tax office and differs by type of house
Pension insurance is paid in lieu of pensions paid to people aged 65 and above. The rate is 18.3% and it is borne 50/50 by the employee and the company
Health insurance entitles employees to only 30% of the payment of usage of medical facilities in Japan. The rate varies slightly with prefecture and is approximately 10%. Costs are borne 50/50 by the employee and the company
Long-term care insurance is necessary for the support of the independent lives of citizens who require living assistance due to aging-related diseases. The rate is 1.58% as of April 2015 and it is borne 50/50 by the employee and the company
Employment insurance provides benefits to employees if they become unemployed. It varies with the type of industry and is borne by both the employee and company
Earned income deduction is a deduction from employment income when calculating income and local taxes. It is based on the total income amount
Child care insurance is the contribution to the government child care program and borne only by the company
Accident insurance for work related inury is borne only by the company
Asbestos insurance is the contribution to the government program for asbestos victims and borne only by the company

These payroll calculators are not intended nor are they a substitute for professional advice. These payroll calculations are complex and qualified professional payroll advice should be obtained prior to taking any action.

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