Side Job Tax Rules for Foreign Employees in Japan (2026)

The JPY 200,000 threshold

In Japan, if your annual side income exceeds JPY 200,000, you must file a Final Tax Return (確定申告). Under this threshold, no tax return is required.

However, this is an income tax rule only. For resident tax, you must report all side income regardless of the amount.

Visa restrictions on side work

For Engineer/Humanities visa holders, side work in a different field (e.g., teaching English while your main job is IT) requires a separate permission.

How to file a tax return for side income

1. Gather all income records (invoices, payments received) and expense receipts
2. Get your Gensen Choshu-hyo (withholding certificate) from your day-job employer
3. Use e-Tax (web filing) or paper forms — e-Tax requires a My Number Card
4. File between February 16 and March 15 at the National Tax Agency website
5. Pay any additional tax by March 15, or set up automatic withdrawal

For most side jobs (writing, design, consulting), your income is classified as miscellaneous income (雑所得). If it becomes substantial and ongoing, it may be classified as business income (事業所得), which allows for the Blue Form 650K deduction.

Keeping your employer in the dark

Many companies in Japan technically prohibit side work in their employment rules. If you want to keep your side income discreet:

1. When filing your tax return, mark "自分で納付" (pay by myself) for resident tax on side income
2. This sends the resident tax bill to your address, not your employer's payroll
3. Without this checkbox, your employer's payroll office sees a resident tax adjustment higher than they expect, triggering a question

Common side income types and their treatment

Deductible expenses (be reasonable)

For side income, you can deduct legitimate business expenses:

• Equipment: laptop, software, cameras (proportionally for business use)
• Home office: a percentage of rent/utilities based on workspace
• Internet / phone: business-use percentage
• Subscriptions: design tools, hosting, AI services used for work
• Books / courses: industry-related learning materials
• Travel: only if directly for client meetings or business research

When side income becomes "real business"

If your side activities grow substantial, consider:

• Becoming a sole proprietor (個人事業主): file the Kaigyo Todoke and apply for Blue Form approval for JPY 650K deduction
• Visa change: if your side work is not in your visa's job category, you may need a different visa (e.g., Business Manager)
• Consumption tax registration: required if annual revenue exceeds JPY 10M (2 years before)
• Incorporating: tax-efficient once net income exceeds ~JPY 8-10M, but adds compliance burden

Related guides

• Filing a Japan tax return
• Becoming a freelancer in Japan
• Working in Japan: tax basics
• Japan tax calendar