Category: Budgeting & Expense Management

Say you need a new refrigerator, rice cooker, toilet, or air conditioner. This could be because the old one broke, because you are moving into a new house, or just because it’s time for an upgrade. There are various ways to save money without sacrificing much, and we will go into them here.

1. Buy Used or “unused” – This is something many Japanese people don’t like to do, but you can turn their reluctance into your treasure. Used products are referred to as “Chuko” in Japanese. If you don’t want to buy something used, ask yourself if there is an actual logical reason, or it’s just a “feeling”. I know someone who tried snowboarding once, decided he likes it, and them immediately went out and bought a ton of snowboarding gear. I suggested he at least buy his first set used, but he scoffed, saying he wanted that new snowboard smell. “Sekaku dakara!” was a phrase he used, which means something like “since we’ve come this far…” or “If you’re going to do it, you may as well do it right”, but in this context, it’s really just an excuse. Predictably, he got bored of it, and the stuff sits unused at his house after just a few uses. When he does sell it, he would be very lucky to get half price – and then someone like myself can pick it up very cheap. Used stuff can be bought from individuals on places like Yahoo Auctions and Merucari, but also from stores that will clean, test, and warrant the items. If you need something small buy expensive like a camera, laptop or phone, this may be a very good option. Larger appliances such as washing machines and refrigerators are usually not a good deal, as when you buy new, you can typically have the old item disposed of quickly and cheaply. When you buy used, then you normally have to deal with the old item yourself – which can be expensive and time consuming. There are even “Mishiyo” (unused) items, which are new, but re-sold. This often happens if someone gets something as a gift but doesn’t want it. They sell it to a shop, who will then resell it to you.
2. Buy “kata-ochi shouhin” – aka last year’s model. Almost all items have a new version released by the manufacturer each year. The new version often costs the same as the old one, and so stores lower the price of the old one to make sure they sell out. Sometimes they will put it on deep discount just to get it out of the store. It’s simpler to manage fewer products, after all. Let’s say you are looking to buy a rice cooker – is the 2025 model that much different than the 2024 model? Probably not. It might have a new color, or an extra feature that you will never use – but it will be 99% the same. What won’t be the same, however, is the cost. Last year’s model will often be discounted 30% or more. The longer it sticks around, the more discounted it will be. It’s still new, and still carries a warranty.
3. Buy “teijihin”, or Display Models. Often stores have display models that they change out whenever a new product arrives. When the 2026 lineup of refrigerators is released, the 2025 one becomes old and they will sell those display models. Typically these might be moved to an outlet for sale, f.e. the Bic Camera Outlet store in Ikebukuro. Again, many Japanese people don’t like the idea of buying something that a lot of people have touched, but again this is more feeling than anything concrete. There is nothing wrong with a display model refrigerator or washing machine that a bit of alcohol spray can’t fix.
4. Shop around. Stores that offer points, such as Bic and Yodobashi, often don’t have the best prices. The items that they offer fewer points on are the ones they are making less profit on, which means they are typically a better deal. Accepting various payment methods such as credit cards also means they need to pay fees to the payment processors. You can buy from a store that only accepts bank transfers, and they will almost always have the exact same product for less. You can search for almost anything at kakaku.com or Hikaku.com, or other similar sites.
5. Consider installation & disposal cost. Larger items such as refrigerators can be difficult to dispose of, and some items such as air conditioners need special installation by a professional. Disposing of an item on your own can sometimes mean waiting for weeks, whereas if they pick up the old item as part of the service when you buy a new one, it will likely be very fast and fairly cheap by comparison. A used refrigerator might be cheaper than a new one, but when you factor in the time and money needed for disposal, buying from a place like Yodobashi is probably the way to go for larger appliances if you are replacing a broken unit. Likewise if you got an air conditioner dirt cheap but it simply arrives in a box, then you need to search for someone to install it for you. If you saved 10,000 on the AC unit compared to a major retailer, but the installer charges you 20,000 to install it, then you’ve gained nothing and lost time.
6. Ask about government rebated and discounts. Local governments often will pay you to upgrade to a more energy efficient appliance. You can typically file by yourself after the fact, but stores like Bic and Yodobashi will actually do it for you and give you the discount on the spot if you provide photos of the old appliance.

Personal Experience

This last year has been an unlucky year in that a lot of things have started breaking, and also I bought an investment property that I had to renovate. Hence I have bought a lot of appliances.

• A friend had a lemon of a bike that kept breaking. Everything she fixed something, a different part would break. I told her that her dedication to that bike was admirable, but perhaps it was time to buy a new one. When we went to the store to look at new bikes, we mentioned to the sales person that we would be willing to look at last year’s model if it was cheaper, and he happily led the way. He was happy to get rid of it, and my friend was happy to save the money. (about 20% savings).
• The refrigerator I currently use was a display model from Bic Outlet (About 30% savings).
• In renovating the new property, I specified the maker and features I wanted for the air conditioner, toilets, windows, etc. I told them “It should be 2022 model or newer”, and the contractor sought out 2024 models that were available at a discount. This saved at least 20% – multiply that by 5 air conditioners 2 sinks, and 2 washlets.
• Also as part of the renovation, I needed to replace the old refrigerator. I asked Yodobashi staff, and they told me that I could get a 20,000 rebate from Tokyo for upgrading, so I saved about 33% on the new 60,000 JPY refrigerator. In addition to that, I saved a lot of money and time on the disposal of the old refrigerator, because Yodobashi picked it up the very next day for 5,000 JPY, whereas it would have cost a lot more and taken weeks with the “normal” process.
• Finally, I needed to replace all of the lights as part of the renovation project. Again there was a rebate of 4,000 yen each, for all of the incandescent and florescent lights I replaced. A helpful staff member at Bic Camera told me about this once I mentioned I was replacing old lights.
• For all of the appliances like microwaves, rice cookers, etc., I found last year’s models on sale and looked on kakaku and other sites to find the best deals.

Here’s the thing. Everything I bought was brand new, and all of it was Japanese brands, under warranty. I didn’t have to buy suspicious stuff from brands I’ve never heard of on Ali Express or Wish, I didn’t need to really lower my standards at all. Nobody renting my house is going to complain “Hey, this is a 2024 model air conditioner!”, or “I think this refrigerator might have been a display model!” Nobody, including me, will notice the difference, and yet I saved hundreds of thousands of yen (Thousands of dollars) in outfitting a small house.

There are three main categories that get deducted from the paycheck of the average worker in Japan:

1. [National] Income tax (所得税)
2. Local [Income] Tax（住民税）
3. Social Insurance (Including Health insurance and other types of insurance)（社会保険）

We’ll call the sum of these three categories “Tax” in a broad sense, since they all get paid to the government in one way or another.

If you have a family where only one person works, they can claim other people sigh as a spouse or children as dependents. This can both lower and raise the overall tax burden. Basically speaking, claiming a person as a dependent will lower tax burden of the primary earner, while raising the fees for social insurance.

Basically, National Income tax ranges from 5% to 45%, depending on your level of income and deductions. Many people make the mistake of thinking that national income tax is charged against their salary, but it is actually charged against their taxable income (課税所得), which can be reduced through various means.

Local taxes are normally fixed at 10% of taxable income, but this can vary slightly in some locations.

Simply Speaking: Taxable Income = Gross Income (Salary) – Deductions.

This means if you want to lower your taxes, you need to lower your taxable income.

Of course you could lower your taxable income (and taxes) by lower your salary, but the amount of money you keep would also be lower!

The other option is to reduce your taxable income by increasing the amount of deductions. If you do it this way, you get to keep more of your income for yourself.

Deductions

1. The most basic Deduction is the “basic deduction” (基礎控除) – in principle, this available to everyone. At present, this is 48 man yen – but the rule is scheduled to change to 58 man yen in December of 2025. The amount will likely change.
2. If you earn a salary at a company, then you also get the “Salaryman Deduction” (給与所得控除) – Which is meant to cover minor expenses of working at a company such as buying suits, shoes, etc., rather than itemizing them as you might do if you ran your own business. This deduction is 65 man yen.
3. Souse Deduction (配偶者控除) – If you have a spouse that has a very low pay (less than 45 man yen per year) or doesn’t work at all, then this deduction can be applied.
4. Special Spouse Deduction （配偶者特別控除）- For those with spouses who earn less than 133 man/year.
5. Family Deduction （扶養控除）- For those with dependent parents or children who earn less than 48 man yen. (The exact amount of this deduction depends on the situation of the family member. More information cab be found here).
6. Disability Deduction (障害者控除) – If the earner or a dependent family member is a disabled person, then this deduction can be applied.
7. Survivor Deduction（寡婦控除）- Currently applicable for surviving wives in situations where the husband has died. This is usually 27 man yen, but there is a also a special deduction of 35 man in some cases. You can find more details here. This looks set to be changed in the near future for gender equality.
8. Single Parent Deduction （ひとり親控除）- This deduction is for single parents. Both males and females can make us of this deduction)
9. Working Student Deduction (働労学生控除) – For working students with low income.
10. Social Insurance Deduction （社会保険料控除）- Basically for people who are paying for company sponsored health insurance.
11. Small Company Pension Deduction （小規模企業共済等掛金控除）- This is for those with an iDeco account. Unlike other deductions, this one can only be used by the earner themselves.
12. Life Insurance Premium Deduction （生命保険料控除）- This has a maximum of 4 man yen per contract for a combined maximum total of 12 man yen / year. It’s important to note that this doesn’t mean your taxes could be reduced by up to 12 man yen per year, as they can be reduced by at most 12 man x your tax rate. More information can be found here.
13. Earthquake Insurance （地震保険料控除）- As the name states, but most earthquake insurance isn’t easy to pay out, so this may not be a very good deal. More info here.
14. Donation Deduction （寄附金控除）- For people who have donated. See here for hometown tax, and here for other donations.
15. Medical Fee Deduction （医療費控除） – For those who have paid a substantial amount of medical fees during the year. more details can be found here.
16. Disaster Deduction （雑損控除）- For those who have experienced a natural disaster or other major loss. More information can be found here.
17. Housing Loan Deduction （住宅ローン控除）- This can be used to claim the interest on housing loans, etc. – but given that if you choose a home with poor resale value your loss will be major compared to the small amount of this deduction it deserves careful thought. (Especially any new homes will almost certainly be sold at a loss eventually).

Basically all of these deductions are designed to lower the tax burden for people who have tough situations or have already paid a lot elsewhere.

There are two main ways that taxes can be filed for most people.

1. Year End Adjustment (年末調整) – This is where the company files your taxes for you at the end of the year based on the information they have.
2. Tax Return （確定申告）- This is when you fill out a tax return and send it to the tax agency on your own.

For most people working at a company as an employee, it isn’t necessary to file a tax return.

Situations where you need to file a return include:

1. When you have multiple sources of income.
2. When you have income over 2000 man yen per year
3. When you want to claim deductions that aren’t within the scope of the year end adjustment.

So what kind of things do you need to claim yourself?

1. Hometown tax – This is handled as a donation. (Though you can use the one stop site instead of filing taxes if you are donating to 3 or fewer locations).
2. Medical Expense Deductions – You can claim medical expenses you had to pay over 10 man yen in the year. You can apply for expenses incurred up to 5 years ago. This always requires filing a tax return.
3. Spouse & Family Deductions – This can be applied when there is a dependent spouse, elderly parents, or young children, etc. Note that the key word here is dependent. If the person is working and earning a significant amount, then it may be better not to claim them as a dependent. The intent of this deduction is to allow for at least a minimal level of income per person. Note that this deduction is also scheduled for a major revision in December of 2025. Even though this is something you must apply for, you can do it via your company instead of filing a tax return.

While many of these deductions only apply in special cases, some apply to nearly everyone. In addition to that, almost everyone can use the hometown tax system. You can also use the 401k at your company if they have one, or iDeco if they don’t have one. The more you increase deductions, the lower your taxable income, and therefore taxes will be – This will leave more money in your paycheck, or at least your retirement account.

Who benefits from Spouse & Family Deductions?

First, the people who will lose out if they use these deductions are those who don’t use the deductions to their fullest, those who those who stay registered as dependents when they shouldn’t, and those who earn too much money for it to be worth while.

People will win out are those who will use the deductions they can, those who will make money even if they are not dependents, and those who will pass a minimum level of income.

Obviously, you should use any deductions that are available to you. If you are the breadwinner and you have a dependent family member who lives with you and earns a low income, then you should claim them as a dependent. This normally means you need to fill out a form so that the HR department at your company knows the situation and will adjust payroll accordingly. If for some reason you don’t want to share this information with your company, then you will need to file a tax return with this information.

It’s important to remember that the purpose of spouse & family deductions is to maintain an absolute minimum standard of living, not to enrich people who don’t work. Therefore, it does not make sense to try to limit your income to keep your status as a dependent. If you earn too much to be counted as a dependent, then you are earning enough to file for taxes on your own and receive your own deductions. The idea of “If my wife earns more than 103 man per year then I won’t be able to keep the spouse deduction” isn’t wrong, but the conclusion that this is a bad thing is just not right. The husband will pay more taxes in this case, but the wife will pay less taxes. Even though there is a grey area where the total net income will be less from working more hours, this grey area is constantly changing, well past 103 man, and anyway will quickly be passed through by most people (more details below).

Therefore, the correct way of thinking is for everyone in the family to earn as much as possible – but also use whatever deductions make sense given your current situation. If a family member you could claim as a dependent starts earning more, then even if they are removed as a dependent, and both taxes and social insurance increase – the total net income of the family will generally increase – and isn’t that a good thing?

One other thing that bears mentioning is that the tax rate only applies to the amount above each level. For example, the highest tax rate is 45%, but not only does that 45% not apply to the person’s gross income – it also doesn’t even apply to their entire taxable income. The 45% only applies to the income after 4000 man yen. This means there is no sense in fearing earning enough to put yourself into the next tax bracket. Entering the next tax bracket only means income above that amount will be taxed at a higher rate. You will still always end up with more in your pocket if you earn more, even if the tax rate and the tax paid increases.

While the above is 100% true for a primary earner, there is indeed a grey zone for spouses where the total net income can actually go down from working more. This is basically the area between 130 man to 150 man per year for most spouses. This “wall” will move each year as minor changes to the law take place, so rather than trying to manage your income to stay below a certain limit, it makes more sense to earn as much as you can, and then apply whatever deductions you can. In short, if you can earn 130 man, you can probably earn 150 man and be out of the valley anyway.

If your only goal in life is to avoid paying taxes, then you will severely limit your chances of income for your and your family.

The last thing to mention is that adding someone as your dependent for taxes will lower your tax bill and save you money, but adding them as your dependent for health insurance will raise your insurance premiums and cost your money. Because of this, you may want to go to HR and ask them about the total combined effects of any changes you are considering before adding or removing a dependent.