Q: The amount of business income is calculated by subtracting necessary expenses from total earnings. When calculating employment income, are necessary expenses subtracted from total salaries and wages, as with business income?
A: No, employment income is calculated by subtracting the deduction for employment income from the gross amount of salaries and wages. The deduction for employment income is determined based on a statutory formula, which varies depending on the gross amount of salaries and wages. Therefore, actual expenses incurred in connection with employment are not deductible from the gross amount of salaries and wages when calculating employment income, as a general rule.
・5,500,000÷4=1,375,000
・1,375,000×3.2−440,000=3,960,000
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 + 1,000,000 551,000 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 Source:NTA website
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