I'm currently going through the interview process for an IT company that hires people from around the world, and they all work from home. I haven't asked how the salary is paid yet, but I'm assuming it'll be a wire transfer to my Japanese bank account. They have about 300 employees, all working from home, and they all get paid regular salaries.
Does anyone have experience with this, or something similar? Is there anything I should be aware of regarding income from foreign banks? I honestly have no idea if this is a risky thing to do or not, but it promises a much higher salary with plenty of real promotion opportunities, something I'll never have in small town Japan. FYI, I'm a permanent resident.
I have a lot of questions, but my main concern is calculating and paying taxes... I'm assuming it can just be claimed as basic income and that there's no extra tax on foreign income, but I have no evidence of that. I'll also have to switch from Shakai Hoken to Koku-Ho, but the 50% bump in starting salary would more than make up for the bump down in benefits. Will I be able to pay employment insurance without being employed by a Japanese company?
Secondarily, I'm wondering if there are any tricks to working from home. Could I claim my home office (I have a house), internet service, etc... as work expenses and reduce my taxes, or anything like that? Would starting a small business make sense for this kind of work?
Any other tips/things to know?
Thanks a lot everyone!
Anyone have experience being paid by a foreign company?
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StockBeard
- Veteran
- Posts: 193
- Joined: Wed Aug 09, 2017 7:36 am
Re: Anyone have experience being paid by a foreign company?
A friend of mine is in a similar situation, so I have stuff I have heard from him:
- for taxes, declare it as basic income, just make sure you calculate things to the value of the yen on the day you received the money. There's no extra tax on foreign income AFAIK (Note that I do personally receive foreign income, have always declared it as "misc" because it's not my main job, and never ran into an issue. Been doing this for about 8 or 9 years)
- (Personal opinion) You should be able to create a small business and declare yourself as a freelancer. But you don't need to own a business in order to declare expenses to reduce your taxes, but my understanding is that declaring expenses is much more difficult than it used to be. Before that, you could do ball park estimates as long as it was reasonable. Nowadays I have been told all income and expenses need to be properly documented (e.g. if you buy a printer for your business, you have to properly document the asset deprecation, etc...). It depends if that's worth the effort for you. My friend is not doing it (but he's lazy with money...)
- You have to subscribe to social security and retirement pension (Nenkin), as you mentioned. These costs can be high depending on your income and your family (can easily go above a million yen a year), you should take that into account when comparing your revenue to the salary from a Japanese company (which will pay for parts of that).
- What is employment insurance?
- for taxes, declare it as basic income, just make sure you calculate things to the value of the yen on the day you received the money. There's no extra tax on foreign income AFAIK (Note that I do personally receive foreign income, have always declared it as "misc" because it's not my main job, and never ran into an issue. Been doing this for about 8 or 9 years)
- (Personal opinion) You should be able to create a small business and declare yourself as a freelancer. But you don't need to own a business in order to declare expenses to reduce your taxes, but my understanding is that declaring expenses is much more difficult than it used to be. Before that, you could do ball park estimates as long as it was reasonable. Nowadays I have been told all income and expenses need to be properly documented (e.g. if you buy a printer for your business, you have to properly document the asset deprecation, etc...). It depends if that's worth the effort for you. My friend is not doing it (but he's lazy with money...)
- You have to subscribe to social security and retirement pension (Nenkin), as you mentioned. These costs can be high depending on your income and your family (can easily go above a million yen a year), you should take that into account when comparing your revenue to the salary from a Japanese company (which will pay for parts of that).
- What is employment insurance?
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captainspoke
- Sensei
- Posts: 1594
- Joined: Tue Aug 15, 2017 9:44 am
Re: Anyone have experience being paid by a foreign company?
You only need to depreciate an asset with a purchase price of ¥100,000 or more. The period depends on the asset there’s an official table for this ‘useful life’ calculation.
Re: Anyone have experience being paid by a foreign company?
Ack! I totally forgot I asked the question here, I just wanted to thank everyone for the replies! The company is checking rates with "Employer of Record" companies. I will be employed by the EoR, and they will "dispatch" me to the international company, so my pay will come from the EoR and will look normal in the sense of taxes.
Ravlen
Ravlen