Specified expenses deduction for salaried workers: covers amounts over half of the employment income deductionWhen a company employee can have money they paid for work counted in their taxes
A salaried worker who pays any of seven kinds of specified expenses (commuting, business trips, relocation, training, qualification acquisition, return-home travel, and work-related expenses) and whose total for the year exceeds half of the employment income deduction can, through a tax return filing (kakutei shinkoku), subtract the excess from income after the employment income deduction.
- ○Applies: Cost of obtaining a qualification directly necessary for your duties (with certification)
- ○Applies: Cost of books related to your duties (book costs under work-related expenses)
- ○Applies: Usual necessary spending for relocating because of a transfer
- ×Does not apply: Spending fully reimbursed tax-free by your employer
Key points
- Seven kinds are covered: commuting costs, business trip costs for duties (from 2020, Reiwa 2), relocation costs, training costs, qualification acquisition costs, return-home travel costs, and work-related expenses.
- Work-related expenses are book costs, clothing costs, entertainment expenses and the like, and are limited to a total of JPY 650,000.
- In every case, the expense must be directly necessary for performing duties and be certified by the payer of the salary or a career consultant (a career consultant's certification applies to the education and training part of training and qualification costs from 2023, Reiwa 5).
- Amounts reimbursed tax-free by the payer of the salary and amounts paid as education and training benefits are not included in specified expenses.
- A tax return filing is required. Attach the statement and certificate for specified expenses, and attach or show documents proving the fact and amount of the expenses.
What to do in practice
- For expenses that may qualify, consult your employer in advance about whether the payer's certification can be obtained.
- Keep receipts and other documents showing the fact and amount of the expenses.
Even company employees sometimes pay out of their own pocket for study or qualifications needed for work. When that money goes over a certain amount set by the government, there is a system that lets it be taken into account when taxes are calculated. However, you need your company or similar party to certify that "it is necessary for work."
- 1. PayPay the work-related cost yourself
- 2. CertificationHave your company or similar party certify that it is necessary
- 3. Tax return filingSend in your tax return with the documents attached
Points
- It covers seven set kinds, such as commuting, training, qualifications, books, uniforms and moving.
- The condition is that your company or similar party certifies that it is "necessary for work."
- Money your company paid for you does not count.
What the words mean
- Employment income deduction (給与所得控除)
- A system that automatically subtracts a set amount from a company employee's pay
- Certification (証明)
- Your company or similar party confirming in a document that "it is indeed necessary for work"
- National Tax Agency (NTA): NTA: No. 1415 Specified expenses deduction for salaried workers
Tax-saving information introduces systems permitted by law. Each has conditions for application, and this is not encouragement of tax avoidance. Please consult a tax accountant or other professional before applying.
This article summarizes and explains materials published by government agencies and is not advice on any individual case. Rules can change, so for actual procedures and decisions always check the latest original materials and consult professionals such as tax accountants or labor and social security attorneys. English, Simplified Chinese and Traditional Chinese versions are translations prepared from the Japanese articles for convenience. If anything differs, the Japanese text and the original source take precedence.