Family life in Japan: schools, health insurance and tax for assignees

Statuses: one per person

An assignee's family does not share the assignee's status. A spouse and children usually hold Dependant (家族滞在), which permits daily life and study and, with the comprehensive permission for activities outside the status, paid work within 28 hours a week. Households headed by a Highly Skilled Professional have more: the spouse may work in professional categories under Designated Activities without the usual degree or experience tests, a parent may accompany where there is a child under seven or a pregnancy and household income is JPY8 million or more, and a domestic worker may be employed where household income is JPY10 million or more and the other conditions are met. A spouse of a Japanese national holds a status with no activity restriction.

Each person has a residence card with its own expiry and their own notification duties. A change of the principal's employer, a divorce or the end of the principal's status affects every dependant and must be handled within the statutory periods. The household's compliance record, including a dependant's working hours and contributions, is examined as one when the principal later applies for permanent residence.

The first fortnight

Within 14 days of settling at an address, each mid- to long-term resident registers at the municipal office and the address is written on the residence card. The municipality issues a My Number (Individual Number) notification for each person; the number is used for tax, social insurance and increasingly for banking and healthcare, and the My Number Card serves as identification and as the health-insurance card. Children of school age are enrolled through the municipal board of education for public schools, or directly with an international school.

The principal's employer enrols the employee in Employees' Health Insurance and Employees' Pension Insurance; dependants are covered under the employee's health insurance on application through the employer. Where the principal is not an employee, for example the head of a small company who is not on its payroll in the ordinary way or a self-employed professional, the whole family enrols in National Health Insurance and National Pension at the municipality. A Dependant who will work part-time applies for the comprehensive permission, ideally on landing.

Schools

Public elementary and junior high schools are free of tuition and open to resident children regardless of nationality; they teach in Japanese and are the fastest route to the language. Many municipalities provide Japanese-language support for new arrivals, and the Ministry of Education publishes guidance for foreign families. The school year begins in April. Children arriving mid-year are placed according to age.

International schools in Tokyo, Yokohama, Osaka, Kobe, Nagoya and other cities teach in English and other languages, follow international curricula and charge fees set by each school. Places at well-known schools are applied for well in advance, and admissions calendars vary. Assignee families commonly combine the two: younger children in the public system for language and integration, older children in an international school for curriculum continuity. School fees paid by an employer are generally taxable as income to the employee; take advice on the structure.

Health insurance and pension

Japan's public health insurance covers residents enrolled through an employer or a municipality, with the insured paying a share of treatment costs at the point of care and a monthly cap on out-of-pocket expense under the high-cost medical care scheme. Contributions through an employer are deducted from salary and shared with the employer; National Health Insurance premiums are assessed by the municipality on the previous year's income and household size. Private insurance supplements rather than replaces the public scheme.

Pension enrolment is compulsory. Employees pay Employees' Pension Insurance through payroll; others pay National Pension contributions directly. A non-working spouse of an employee is enrolled as a category 3 insured person without a separate contribution; a spouse of a non-employee must pay National Pension contributions, and unpaid contributions are a common reason for a later permanent-residence refusal. On leaving Japan permanently, a lump-sum withdrawal payment of up to 60 months of contributions can be claimed within two years of departure; nationals of countries with a social-security agreement may instead totalise periods. Check the Japan Pension Service for the current rules.

Tax: residence tax, income tax and the first-year trap

Income tax is withheld by the employer and reconciled at year end, with a return required in defined cases, including for those with income above the employer-adjustment threshold or with foreign income to declare. A resident without Japanese nationality who has lived in Japan for five years or less in the past ten is a non-permanent resident, taxed on Japan-source income and on foreign-source income paid in or remitted to Japan; after five years, worldwide income is taxed. Treaties may modify the position; confirm with the National Tax Agency's guidance and take advice.

Residence tax is levied by the municipality and prefecture on persons with an address on 1 January, on the previous year's income. An assignee who arrives in, say, August pays no residence tax that year or the next until June, when the bill for the first calendar year's income arrives. The year of departure can therefore carry a full residence-tax bill on the previous year's income, due after the person has left; a tax representative should be appointed and the amount settled before departure. Employer-paid housing, school fees and home-leave are generally taxable benefits, and assignment packages should be structured with Japanese tax advice.

Exit-tax rules apply to long-term residents with financial assets above a threshold; inheritance and gift tax can reach a foreign national's worldwide assets after a period of residence. These are structural points; the figures and thresholds should be checked with the National Tax Agency before relying on them.

The household calendar

A family that runs this calendar well is doing more than staying compliant. It is building the household record that the principal's Highly Skilled Professional extension, the spouse's own work status and the family's permanent-residence application will all be read against. In Japan, family life and immigration compliance are the same set of documents.