This question comes up in online forums fairly often in different forms. One of the more common forms is something like “Is 250,000 JPY per month salary enough to live in Japan?”.
The answer isn’t so simple.
One way people might try to answer this naively is to simply use an exchange rate converter. There are two main problems with this:
- The cost of living in Japan may be very different than other countries, so a simple number won’t help you understand if an amount is high or low just by comparing it to another number.
- The taxes and social insurance schemes in Japan are also potentially very different than that of other countries you might be used to.
The first thing to do is to try to figure out how much would actually remain from your potential paycheck. You can use the site below to get an estimate:
250,000 per month is fairly low, so not much taxes or social insurance will be taken, and the estimated take-home pay is 194,740 JPY per month.
According to Study in Japan, the average monthly cost is 130,000 JPY in Tokyo.
That means you would have almost 65,000 left right?
Well, but this is an average budget for students. Housing is listed as 41,000 – but assuming you don’t want to live at a dorm, you could easily pay twice that for a one bedroom apartment. In fact, you could pay 4 times that much if you want a swanky apartment right next to a major station.
This budget also assumes 32,000 JPY per month for food. That is 100% doable if you are eating rice and drinking water, but I personally spend over twice that much.
It might be more useful to see how much things cost in relation to other countries. Numbeo is one site that is good for that.
You can see from the numbers on this site that Tokyo is 44% less expensive than NYC, and in particular the rent is 74% less expensive – this is despite Tokyo being a much larger city. What this really means you could live as comfortably in Tokyo as you could in New York on half of the New York salary.
Then there are the non-monetary differences:
- Tokyo generally has nicer and cheaper public transportation than NYC
- Tokyo’s trains and subways do not run 24/7
- Tokyo generally is safer and has less crime than NYC
- There are many cultural differences
- Tokyo has many more colleges and universities than NYC
- Gas and Electricity is more expensive in Japan
- Internet is better and cheaper in Japan
- Tokyo has a many more inhabitants, but has a lower population density since it is larger and more spread out
- Tokyo is in general much quieter than other major cities. For example, honking is only for emergencies, blaring music is not tolerated, etc.
- Rent and property prices are much cheaper in Tokyo
- Tokyo is hot and humid much of the year compared to NYC
- There is much less poverty and homelessness in Japan in general, including Tokyo
- There is much less drug use in Japan
- Interest rates are lower in Japan
- etc.
Most of the above is also true when comparing against other major world cities in developed countries such as Hong Kong, London, Paris, etc.
On the other hand, Tokyo is of course expensive compared with cities in the developing world such as Delhi, Bankok, Manilla, etc. – although salaries are lower in those cities.
One official statistic I could find listed the average salary in Tokyo as 369,304 JPY per month in Tokyo. Assuming no dependents, this would leave roughly 286,719 JPY per month to spend. Assuming you spent 100,000 JPY on Food and sundries and 120,000 JPY on rent and utilities (including cell phone), it would leave you with over 66,000 for savings, going out, etc.
This is a reasonably comfortable existence in a city that is safe and convenient, but by no means “rich” in comparison with the average quality of life in other first world countries.
On the other hand, 10,000,000 JPY is usually what is considered to be “six figures” in Japan. This used to be more than $100k USD, but at current exchange rates it is considerably less when converted to USD – but this doesn’t matter so much if you are spending the money in Japan. If you make this much, you are earning 833,333 JPY per month. Since this puts you in a high earning bracket, your deductions for taxes, pension, and social insurance go up considerably, but you will still net about 600,000 per month.
If 250,000 is tight and 369,304 is average, then 600,000 after taxes and social insurance is huge. Granted, it doesn’t mean you are super wealthy – Tokyo is an easy place to blow a lot of money in a short time buy buying brand goods every month or partying every night – but you can easily live comfortably while still saving and investing a lot of money – or you can have a relatively lavage lifestyle.
All of this has been about Tokyo – but other places in Japan are actually cheaper, of course, and usually with lower salaries as well. Japanese people aren’t in general rich or poor, as income inequality is better in Japan than many places in the world – but the costs of many things are lower, so if you made the same salary as in another major city in a developed country such as NYC, HK, or London, or San Francisco, you might feel rich.
You can enter various city names into the sites below to perform comparisons. What you see might surprise you:
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