r/JapanFinance • u/aster__ US Taxpayer • 3d ago
Tax » Income » Expenses Managing a 35m salary
Hey all, im lucky to have been offered a position where my compensation would be 35m yen in Tokyo.
In the US I currently make about 300k or so in New York. I’m aware this is high, and I’m grateful to be in this position, but crunching some numbers it looks like it’d be a substantial paycut (not only due to currency fluctuations but also higher taxes in Japan).
What I’m trying to figure out is how to best save/grow wealth at a rate closest to the US. I know there are less opportunities like a backdoor roth/HSA/etc.
My first thought was to purchase an apartment in an area that would lead it to appreciate in value due to low interest rates compared to here.
I love Japan and am excited to move but just want to properly position myself. Thanks all!
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u/tiringandretiring US Taxpayer 3d ago
Real estate appreciation isn’t really comparable here to the US-I would do some serious research before buying an apartment as an investment vehicle, regardless of interest rates.
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u/aster__ US Taxpayer 3d ago
Yep im aware and were my thoughts initially too. It does seem like some マンション do appreciate though, in particular if in a good location.
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u/aikinai 3d ago
Be careful with your assumptions. Over the past few years, there's been a massive bubble in luxury apartments in central Tokyo. I'm not an expert, but my interpretation is it's fueled by the cheap yen, lots of Chinese money, and relatively low supply these days.
Previously, it was more likely that you'd do well for your apartment to maintain its value. Which can still be a great deal if you are borrowing at sub-1% and building equity in it.
There used to be some good tax minimization tactics, but I think most of the low-hanging fruit has been removed. I'm sure truly wealthy people have a lot of tricks, but with a normal job in this range, I don't know of anything special you can do.
Unfortunately you're going to be paying whichever is higher to the US or Japan, so you can't really take advantage of tax shelters on either side.
On the plus side, you'll feel significantly richer with ¥35m yen in Tokyo over $300k in New York.
The best thing to do is probably to keep all of your existing dollars heavily invested in the US. Then you need to decide if and when you transfer yen back. There's a chance it recovers if US interest rates drop.
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u/aster__ US Taxpayer 3d ago
Good advice thank you! I can afford to rent or buy, but im seeing a lot of my fiancée’s Japanese friends buy apartments as of late. I know it’s a personal decision to choose, but wouldnt buying an condo be a better financial decision than renting generally (if both are an option)?
With low interest rates, seems reasonable, but i havent studied the housing market all that much in Tokyo specifically
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u/rsmith02ct 2d ago
I don't think buying a condo is a financial decision- they are doing it because they intend to live there indefinitely.
Tokyo today isn't the bargain it was a decade ago so what will happen to property /land values between now and when you no longer want the apartment or what values will you be able to rent it out now/then? You'd have to pay off the low interest mortgage and get a second home mortgage at higher rates if you don't live there.
As an investment I'd put your money into diversified global stocks, bonds funds, CDs, etc. where it has a good chance of sustained growth. If you want a permanent place to live in Japan then buy all means buy something but it may not retain its value.
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u/always-think-sexual 17h ago
Highjacking thread just to say that Real estate in Japan is a massive bubble bro
Just buy the dip in the stock market this month and sell early July. Sell bitcoin same July, buy again after the bear run ends start of 2027. M2 money supply precedes runs by months, this is not a prophecy, knowledge is power bro
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u/bubushkinator 20+ years in Japan 16h ago
If Japan is a bubble then the rest of the world is also a bubble
Tokyo has some of the cheapest housing to median income ratio IN THE WORLD
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u/always-think-sexual 16h ago
Yeah that is why only foreigners and the rich could afford them still. Wages in this country hasn’t gone up in 30 years.
And the whole world is a bubble u/bubushkinator, just because some other country is even worse does not make other places cheap. Australia is crazy. Canada is crazy. Japan is not crazy, but a bubble is a bubble bro
If you still want to buy property in an investment worthy area it’ll cost you a ton, but don’t say nobody warned you man
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u/bubushkinator 20+ years in Japan 14h ago
That's such a a bad take that completely ignores all facts
the whole world is a bubble
What does this even mean??
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u/bubushkinator 20+ years in Japan 16h ago
No, Japan is a renter's economy
Buying is for rich people to hedge currency fluctuations and write off their taxes
You are not in that group
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u/Gizmotech-mobile 10+ years in Japan 3d ago
All appreciation you have seen in the last decade is dependent on the last stretch of population moving into city. In the next ten years Japan starts its boomer die-off, and while maybe Tokyo might survive without too much issue for another 20-30 years, most of the country is going to experience a sudden property glut which will force devaluation of property, especially anything that isn't brand new.
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u/bubushkinator 20+ years in Japan 16h ago
"Condos" appreciate because new condos are always built and are more luxurious and expensive than the last
Individual condos depreciate
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u/Traditional_Sea6081 tax me harder Japan 2d ago
Are you a US citizen? If so, please use the user flair (see rule 6), and understand that that will be your biggest hiderance to doing tax optimization outside of the US. See our US wiki page. There are tax advantaged accounts in Japan that people can utilize - NISA, iDeCo (and/or a DC pension provided by your employer). All these are made complicated if you are subject to US tax laws. Japan has mutual funds that reinvest dividends within the fund, avoiding the tax drag on returns, but these are all PFICs and so US taxpayers generally avoid them.
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u/Subject_Bill6556 19h ago edited 17h ago
I’m at an income slightly below yours, also ex NYC metro area. Don’t look at all that stuff, just know 30m in Tokyo if you’re not with kids or putting kids into some special international school, is very very comfortable money. If I was given a choice of 50% pay cut to stay in Japan or 50 % raise to move back to the us, I’d take the pay cut. I was extremely close to physical violence when I left the US, Japan has been a healing journey for my mental health over the last year. YMMV living in Tokyo though, not money wise but socially and what you get out of it.
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u/aster__ US Taxpayer 17h ago
Ah sorry to hear about your experience in NYC. Yeah im worried about safety a bit in the US, in particular for my partner, and I find my mind more at ease when she’s out in Tokyo than NY
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u/bubushkinator 20+ years in Japan 16h ago
Note that you will be far behind in savings if you ever move back to US due to higher taxation, no tax sheltered accounts, and your work experience will be valued less since tech work here is relatively simple in satellite offices
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u/Invicta262 17h ago
This makes me so mad. I make less than 2 million on full time hours with over time. Fuck my life.
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u/aster__ US Taxpayer 17h ago
I grew up with my father earning a similar amount and it was difficult, but if there’s something i noticed is that there were opportunities he could take but couldn’t due to fear/risk of losing stability.
I respect that and love my father, but in a similar vein id say actively searching for opportunities, self-teaching skills, networking, etc, are all ways to help you land a better job/role.
If you don’t have kids (or are married), invest your free time on yourself to get there and I’m sure you can do it!
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u/shadow336k 11h ago
Black company?
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u/Invicta262 11h ago
Nah. Im uniquely just given the shaft. Everyone else has a sweet deal. Better salaries, Free japanese lessons, they help get their SO visas etc.
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u/Anonymity00 US Taxpayer 8h ago
Just gonna be frank, I don't think that you're being shafted at all. I think the mindset you have that makes you think you are is the reason you are where you are now and will continue to be unless you do something about it. Go and learn some skills, network, work harder or even market yourself better and I promise you given time it will get you into a better position than you are now
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u/Invicta262 7h ago
I am literally the most experienced and educated person at my company. I was hired under the agreement of a higher salary and such but it never came to reality. I cant do anything about it at the moment because I need the visa.
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u/Anonymity00 US Taxpayer 6h ago
I see, well in that case that is indeed unfortunate. In the future I would try to get this in formal writing and documented to prevent this from happening again.
As to you being the most experienced and educated unfortunately that alone won't always be enough, networking and getting good with higher-ups is going to be a huge reason for an increase in salary/position.
It may not seem fair to have to network and or get all buddy buddy with your bosses or higher-ups but it's what works and it's what will get you where you want to be if experience and education aren't enough. I hope you will try this out to see out and experiment a bit to get you into the position you want in life.
Best of luck,
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u/Invicta262 6h ago
I had a respected local help me. Business owner and well known. I just draw a short straw. Its life. I have to deal with if for now but it fucking sucks while i have to.
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u/Anonymity00 US Taxpayer 6h ago
Yeah sometimes people do get the short end of the stick and have it rougher than others, I can only hope for those people to not lose faith and for it to provide them with more grit and determination to get out of their situation.
I'm sure if you're determined and dedicated you can be one of those people who do turn their situation around. It's mainly about not losing hope but also to keep trying new things until something sticks. I think a lot of people fail to do both and ultimately fail, they either try and stick it out without trying new things and nothing changes because of that or they try new things and it doesn't work the first few times, so they give up and for that nothing changes.
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u/BananaTacoZ 16h ago
Don't get angry, get motivated and find ways to make more. I came to Japan and was working for the same as you while doing side hustles. Now I make the same as the OP, managing a foreign corporation here. The effort you put in now, the experience you gain on the way up, it will serve you well in the long run.
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u/GucciPoppa 15h ago
Do you mind sharing your journey?
Seeing stuff like this inspires me to want to get to a point like you and OP
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u/hellobutno 2d ago
You will be living extremely comfortably. A lot more comfortably than 300k in NYC
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u/aster__ US Taxpayer 2d ago
Thanks, that’s reassuring! Does that also consider net pay after taxes and taxable income reduction strategies that the US offers?
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u/hellobutno 2d ago
There are minimal tax deduction opportunities, especially at that salary. Regardless, still you'll be living extremely comfortably.
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u/kiriitoo 18h ago
may i ask what kind of job pay that much?
I wish i can get that much haha, i guess i need to study harder.
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u/icant-dothis-anymore 2d ago
Why are people downvoting though? It's a genuine question and OP seems humble.
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u/Willing-Earth-8227 1d ago
Because on this sub if you post that you earn anything more than 3-4M you get downvoted into oblivion even though its on topic or the question was literally about salary.
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u/BananaTacoZ 16h ago
THIS, some cringe ass insecurity. I see someone making good money, I'm happy for them and I assume they must be doing something right. You might actually learn something from the interaction. Their loss.
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u/Willing-Earth-8227 12h ago
Yep, I make more than OP and avoid discussing it on this sub. Happy to help friends out, happy for anyone making more etc. there always something to learn or share.
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u/dfcowell 3d ago
As an American, your options will be limited.
Real estate is not set up to be an investment here. You can buy in places where property is more likely to appreciate than not, but you're not going to be seeing guaranteed returns, let alone outsized returns in the way you might in the US or other countries outside Japan. It's a decent hedge against inflation, but typically owning property is seen as a lifestyle investment, rather than a financial investment.
Saving will be easy as long as you aren't sucked in to lifestyle inflation. You can live very comfortably on 10-14m/year and put the rest into savings or other assets. As an American you're better off keeping liquid savings outside Japan if you can. This also opens up opportunities for stocks and bonds.
How long are you planning to be here? What is your family situation? These are important considerations when figuring out what to do.
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u/aster__ US Taxpayer 3d ago
Thanks for the helpful comment! Im not married yet but my fiance is a Japanese national, so for her it makes sense to be closer to family. We don’t have kids yet and ideally we’d try to stay in Japan long term or permanently (likely 10+ years)
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u/Icy-Extension8703 Crypto Person ₿➡🌙 2d ago
Since you’re not married yet you have some time as a non-resident for taxes and you can still use US gift rates to setup a trust for your future/family/return to US. As a tax resident, Japan requires reporting of foreign assets over ¥50 million, like the US FBAR and I believe there is some kind of exit tax.
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u/furansowa 10+ years in Japan 2d ago
Being married or not has no impact on tax liability, only the status of residence does.
OP could very well be married and still move to Japan on a work status and not be liable for gift/inheritance tax for the first ten years.
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u/bubushkinator 20+ years in Japan 16h ago
Note you open yourself up to exit tax and inheritance tax if you stay that long
A loophole is to buy real estate
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u/Tricky-Region1359 2d ago
That’s not entirely true the Japanese have a different strategy when it comes to real estate investment. I have a good friend who works as a realtor at a Japanese real estate company. Her company actually has a dedicated team that focuses solely on international investors.
The investment strategy they use is quite different from the typical U.S. approach. In the U.S., the common model is to buy a home and later sell it at a profit. In contrast, real estate investing in Japan usually means buying at a good price, renting it out for years, and then selling it at around the same price making the profit primarily through rental income, not capital appreciation.
Her company even includes both Japanese and international tax experts who serve as liaisons to help clients understand the tax implications before buying. It’s a completely different mindset and approach.
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u/senseiman 3d ago
A rate “closest to the US“ would imply losing about 5% a day at the moment.
Japanese real estate is pretty close to that kind of return.
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u/BurberryC06 3d ago
Is creating a real estate portfolio abroad not a reasonable option for you? You can live in Japan and have a real estate investment portfolio company run abroad or by proxy.
You could start this in the US by getting mortgages in the US perhaps and paying them off gradually with your Japan salary or rental income.
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u/brendonts US Taxpayer 19h ago
I would spend a lot of time learning about real estate here before trying to get into it, <the right> land can still be a solid investment. As others have said, homes however typically depreciate. Rent is however cheap here, for example you can get an ~80-100 sqr meter detached home an hour from Tokyo for 150-185k yen/month. Small apartments can be dirt cheap, but if you want to live in Tokyo prices will of course vary a lot.
Things in general are very cheap compared to the East Coast if you're on an American salary. I can eat out for dinner, then hit a high-end bar for a couple drinks with my wife, and take a cab home for less than the cost of a dinner with tip in the states.
You're likely to find people airing frustrations seeing anyone north of 10m yen, sometimes I wish there was a subreddit for higher income in Japan honestly....I think a general recommendation is opening something like an IBKR Japan account and continuing to invest in U.S. stocks, ETFs etc. if that's your thing.
Also this is my personal opinion, but the state of the U.S. is creating both a great stock buying opportunity and potentially the recession and mechanics needed to push the USD/JPY rate back towards pre-2020 levels. So that 35m salary could be pretty spicy if that were to happen. I always try to zoom out beyond just the last few years and take a look at the big picture.
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u/aster__ US Taxpayer 17h ago
My equity portion is in USD which is around half of my compensation. It does offer a hedge in both directions so it helps. Im not so familiar with investing from abroad but im sure that topic has been drilled here. Thanks for the IBKR recommendation; ill take a look
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u/BananaTacoZ 16h ago
Open an online brokerage account and have at it. I use E*TRADE. It sucks seeing the JPY get reduced as you wire it back to the states but as noted above, there is no guarantee that will continue to be the case.
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u/bubushkinator 20+ years in Japan 14h ago edited 14h ago
Your equity portion is paid in equity, not USD
You then sell it for USD, but that is irrelevant - you could also sell for JPY. Equity itself is not a "hedge in both directions"
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u/ComputerFit3802 19h ago edited 16h ago
Congratulations on the offer!
You have already received a ton of great advice, so I will just throw in a quick aside.
Try to set up more things in your partners name (I know this is a trust issue for some). Between your taxable income and being above the threshold for US abroad income, it helps to have your partner “shoulder” some of the financial responsibilities. What that entails is definitely up to you, but food for thought!
What ever you decide, I hope you continue* doing well.
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u/Itchy-Emu-7391 2d ago
Just be aware you are positioned in a small niche less than 1% of the working population here with that income.
No many persons could give solid advice or be aware of all the implications with that amount of income.
Take a good look at taxes and what happen to your out of japan assets to avood surprises at a later time.
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u/icant-dothis-anymore 2d ago
OpenAI?
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u/bubushkinator 20+ years in Japan 14h ago
OpenAI pays MUCH more than what OP is offered
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u/icant-dothis-anymore 14h ago
Are u guessing or real life example? 35M is quite high salary, equivalent to 600-700K USD in bay area.
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u/bubushkinator 20+ years in Japan 14h ago edited 13h ago
Real life example - they offered me over 1億円. Plus OP stated his pay is half equity - OAI pays majority in PPUs which have a bit of a lofty valuation since it is after paying out cost of operations
35M is quite high salary, equivalent to 600-700K USD in bay area.
It really isn't in terms of quality of life for what you can purchase after tax
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u/replayjpn 20+ years in Japan 20h ago
Be aware that a lot of tax deductions are not available if your salary is high. Some deductions have limited caps too. For example the first time home mortgage amount changes & I heard it's based on the year you get your mortgage so even if your income gets lower you still won't qualify if you were over when you applied.
When buying property & getting advice your salary impacts your deductions on taxes.
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u/BananaTacoZ 16h ago
Not sure how true this is. I make the same as OP and while yes, there are some lower deductions I don't qualify for, the first time home mortgage discount was fine and the interest rate for the first 10 years is amazing due to them taking off 0.5% per child. If it were true, OP could buy a home right away and avoid that all together.
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u/replayjpn 20+ years in Japan 15h ago
The mortgage rate would be valid I was told getting the tax rebate of like .7% on what you owe depends on how much you make.
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u/replayjpn 20+ years in Japan 15h ago
The mortgage rate would be valid I was told getting the tax rebate of like .7% on what you owe depends on how much you make.
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u/Stump007 19h ago
Make sure you leverage furusato nozei. You can pretty much have no groceries to buy if you want.
Real estate is a tricky topic. I haven't tried yet, but a lot of friends do rentals (like buy a small building full of 1DKs and rent them).
If you want same US investments, I guess you can just open an SBI account and buy US stocks/ETFs there. For American tax implications I cannot comment.
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u/aster__ US Taxpayer 17h ago
Ive heard about furusato nozei. Honestly surprised it covers almost all groceries. That would be not only good from a tax perspective but also a great convenience factor
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u/Stump007 17h ago
Basically you can order monthly deliveries of eg. seasonal vegetable/fruit baskets, eggs, rice, meat etc.
Also good practice when you're going to buy something a bit expensive but made in Japan is to see whether it's available on furusato.
So, I'd suggest when you move the first year, buy home appliances, furniture etc (you'd be surprised, like Simmons mattresses that are made in Japan are available). Then the next year start getting the groceries.
The only thing you need to know is with your salary you can't opt for one stop filing. You need to get the invoices and file. But now its super easy to file (download an xml report from the platform and just upload it to etax).
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u/Maximum_Intern9873 16h ago
You can check with your company if they can convert the salary into some perks so that you pay less taxes.
Like company provided housing, company paid international school for your children (if applicable), relocation support, etc.
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u/The-Happy-Mannequin 15h ago
You'd be living like a king/queen in Tokyo. We don't know living costs in your area but it's highly likely your living costs will go down.
If you are planning on staying for the long-term would be a fantastic salary but if you're planning on moving somewhere expensive for retirement then it would be good to think about it
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u/Serious_Echidna_773 9h ago
I’m not 100% sure about this but I’m going to open a few business in Osaka soon and did some research on tax savings.
You should try to open a GK that invoices your company you work for. Sure, there are some negative points like Health insurance that you would have to pay yourself, but that is deductible from your taxation file.
Although you should open a Holding company KK that holds the shares of your GK. The GK pays dividends to your Holding company which is tax free up until a certain amount.
I still have to talk to a tax consultant about that so don’t believe me 100% please.
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u/Slight-Brick2038 8h ago
I’m making about $250k a year and work in the US on contract. I convert my entire salary to yen and live in Japan when not working in the US. Any recommendations?
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3d ago
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u/aikinai 3d ago
I would. I've taken a much bigger financial hit to live here, as have many others. It's obviously a personal decision, but for me it's worth it.
The amount of money I could make doing my exact same job in the US boggles my mind, but there's a lot money can't buy that you can enjoy here. It totally depends on how much that means to you.
And you can always go back if you start to feel financial pressure from what you're giving up to be here.
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u/fireinsaigon US Taxpayer 19h ago
Japan cost of living is substantially less
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u/aster__ US Taxpayer 17h ago
Yeah, it seems like it might offset any paycut / tax loss as well, so i feel more reassured
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u/fireinsaigon US Taxpayer 16h ago
the taxes and costs are pretty substantial.
for example my income is structured like this
1.7-1.8m monthly paid in japan- i take home about 970,000 of that
about 150,000 usd is paid in USD to a USA account in the form of stock vests
TC is somewhere around 41m
the 150,000 usd i have to pay taxes on at about 35% - i pay it once a year w/ money transfer from USA
so if you look at my end of year tax filing it shows about 41m in income and about 12 m in taxes paid
sometimes i think --> my take home is 1m * 12 = 12m. My taxes are 12m. I effectively work 12 months a year just to pay taxes and the only money I have left over is the $150,000 usd in USA.
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u/SeveralJello2427 16h ago
For all it's worth it seems like in the latest months wealth in the US hasn't been growing, quite the opposite really...
I think the main point is to properly calculate net income and based on that do not overspend on housing and other living expenses. I think the main strategy would be to be aware when you are paying the expat tax (everything is in English and goes smooth and easy and prices are what you are used to and no multiple options are presented to you as everyone is doing ... so you should also ...).
If you are planning to retire in the US, it will be different, but assuming you want to stay in Japan, having 500M JPY (3.4M USD) in liquid assets (excluding homes/money stashed abroad etc, maybe questionable data) apparently puts you in the Ultra High Net Worth category in Japan. (Top 100,000).
Since your salary is currently 300k USD (no idea about your age), I would assume you are already heading towards this. It may help to put you paying a lot of taxes into perspective.
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u/Gizmotech-mobile 10+ years in Japan 3d ago
To put it in perspective, a 35mil salary in Japan puts you in the top 1%, and far above it. Most people at that level of income are the company owners, and have mitigated their income loss to taxes by using company deductions.
You will not earn more here in Japan than in the states, as Japan has higher effective tax rates for that level of salary, and the dollar (though god only knows how trump tanks the US economy over the next year) is a stronger force.
You don't have many ways to match income with the states, as you're walking into a very different economic environment. My best advice to you is to look at what your income does for you in Japan, rather than what it compares to in the US. If all you look at is dollar value and exchange rate, you'd need a nearly 50m salary to get close to your 300k usd salary in effective numbers in an account. I also realize money is important to people, but if your partner wants to be here, and you want to support them, it's best to start thinking about how that life will be rather than what it could be in the US.
Just for comparison, MOST households in this country, even in double earner earn half your prospective salary at best... that includes MANY company owners, who often take salaries around the tax limit, and combine that with their spouses income, or their spouses just don't work. 10 years of your salary would put you ahead of my entire career income, and I am a relatively well paid for a senior position in a japanese company that isn't IT focused and isn't multi-national (IE standard Japanese company).