A Japanese employee can claim family members as dependants in two different systems, and the rules do not match. The first is tax. A spouse or relative whose own income is low enough gives the taxpayer a spouse or dependant deduction, which reduces income and inhabitant tax. For 2026 the income test for the main deductions is 620,000 yen of total income, equivalent to a salary of 1.36 million yen, up from 580,000 yen in 2025. Above that, a reduced spouse deduction phases out more gradually.
The second is health insurance. A dependant in the employee's health insurance is covered without any extra premium, and a dependent spouse also counts as a Category 3 member of the National Pension without paying. Here the test is annual income below 1.3 million yen, or 1.8 million yen for those aged 60 and over or with a disability, and income lower than half of the employee's. The dependant must normally live in Japan, a requirement added in April 2020, with exceptions for students abroad and family accompanying an overseas assignment.
Overseas family are treated more strictly for tax too. Since 2023, relatives living abroad aged 30 to 69 count as dependants only if they are students, disabled, or received at least 380,000 yen a year from the taxpayer, with documents to prove it.
What it means for a foreign employer
- Foreign staff often claim family abroad. Payroll must collect proof of relationship and remittance for overseas dependants, or the deduction is disallowed.
- Family abroad cannot join Japanese health insurance. A spouse or child living overseas is generally outside cover, so international medical insurance may be needed.
- A working spouse changes the numbers. When a dependent spouse takes a job, both the tax deduction and free health cover can be lost. Candidates sometimes raise this when discussing relocation.
Sources
- Income Tax Act, Articles 2, 83, 83-2 and 84, as amended by the fiscal 2023, 2025 and 2026 tax reforms.
- Health Insurance Act, Article 3(7), as amended April 2020; Ministry of Health, Labour and Welfare, dependant recognition standards.
- National Tax Agency, guidance on deductions for relatives living abroad.