Revision of employment income deductions Increased burden on company employees with annual income exceeding 8.5 million yen

Review of deductions for salary income Employees with annual income of more than 8.5 million yen increase burden December 30 15:01

From the 1st of next month, the amount of income tax calculation, such as “deduction for employment income” will be reviewed. For employees with an annual income of over 8.5 million yen, the tax burden will be heavier, except for child-raising households, while self-employed workers, such as freelancers, will be reduced in tax.

This review of income tax deductions is based on the tax reform last year, and will reduce the amount of "salary income deduction", which deducts a certain amount from the salary of company employees and public servants as necessary expenses, by 100,000 yen.

On top of that, the maximum deduction for those whose annual income exceeds 8.5 million yen is reduced to 1.95 million yen, excluding those who have children under the age of 23 or those who share a living with people with severe disabilities. Increase tax burden.

In addition, the deduction of public pensions, which is deducted from the pension income of the elderly, is also reduced by 100,000 yen in the same way as the deduction of employment income, and the deduction for persons whose pension income exceeds 10 million yen is In addition to setting an upper limit of 15,000 yen, those with non-pension income exceeding 10 million yen will further reduce the deduction.

On the other hand, all taxpayers, including self-employed workers who do the same work as company employees, undertaking work from companies, raise the `` basic deduction '' by 100,000 yen to 480,000 yen And ensure that there is no gap due to diversifying working styles. This review will take effect on the 1st of next month.

Three deduction reviews at the same time

In this amendment, the three deductions of "deduction for employment income", "deduction for public pensions", and "basic deduction" will be reviewed at the same time.

"Deduction" is a mechanism that reduces the burden of tax when calculating income tax. If the deduction increases, the tax to be paid decreases, and if the deduction decreases, the tax increases.

The amendments will reduce the "salary income deduction" and "public pension deduction" applied to specific income, such as salary and pension income for company employees, while reducing the "basic deduction" for all taxpayers. ".

This is intended to support a variety of working styles, such as self-employed workers who work under contract from companies and work in the same way as company employees, or who work at home while raising children.

In employment income deduction

The `` wage income deduction '' is a system in which a certain amount of salary is deemed to be necessary expenses and is deducted from the income when calculating the income tax of those who have earned income such as office workers and government employees. Self-employed persons are not eligible for the “salary deduction”.

In this revision, the salary deduction is reduced by 100,000 yen to reduce the difference in deductions depending on the way of working, and instead, the `` basic deduction '' for all taxpayers is reduced from 380,000 yen Increase by 100,000 yen to 480,000 yen.

Then we reduce the maximum amount of the deduction, assuming that the amount of the "deduction of employment income" is higher than the actual cost.

Until now, there was an upper limit of 2.2 million yen for those whose annual income exceeds 10 million yen, but with this revision, the deduction amount is 250,000 yen, including a uniform reduction of 100,000 yen. We will revise it so that people with annual income exceeding 8.5 million yen will be subject to the upper limit of 1.95 million yen.

As a result, for example, a person with an annual income of 9 million yen will increase the tax burden by about 15,000 yen per year, 9.5 million yen about 30,000 yen per year, 10 million yen about 45,000 yen per year. Become.

However, this reduction should not be applied to those who have children under the age of 23 or who are living with severely disabled people.

According to the Ministry of Finance, the burden will be increased by about 2.3 million wage earners, or about 4%.

In public pension deduction

We will also review the “public pension deductions” that are deducted from the elderly's pension income. In the same way as the "salary income deduction", the price is reduced by 100,000 yen, and instead, the "basic deduction" is raised from 380,000 yen by 100,000 yen to 480,000 yen.

If you get a "salary" and also have a "pension income", make sure that the deduction is not doubled. On top of that, we will set an upper limit of 1,955,000 yen on the deduction for those whose pension income exceeds 10 million yen.

Furthermore, if the non-pension income, such as the remuneration of company officers, exceeds 10 million yen, the deduction will be reduced by 100,000 yen, and if it exceeds 20 million yen, 200,000 yen. This will increase the tax burden for those whose pension income exceeds 10 million yen and those whose non-pension income exceeds 10 million yen.

According to the Ministry of Finance, about 3,000 people have a pension income of more than 10 million yen, and about 200,000 of pensioners have a non-pension income of more than 10 million yen, which increases the tax burden That's about 0.5% of the approximately 40 million pensioners.

In basic deduction

The "basic deduction" for all taxpayers will be raised by 100,000 yen to 480,000 yen, but it is not necessary to reduce the burden on high-income people. When the amount exceeds 24 million yen, the deduction starts to decrease, and when it exceeds 25 million yen, the deduction is gradually reduced to zero.

Specifically, those who earn more than 24 million yen and up to 24.5 million yen will receive a deduction of 320,000 yen, those who exceed 24.5 million yen and up to 25 million will earn 160,000 yen, and more than 25 million yen Who will be zero.

In this way, by reviewing the three deductions at the same time, the type of deduction that is applied only to specific income is reviewed, and high-income employees and senior citizens are generally tax-enhanced, while freelance self-employed For example, we will reduce taxes so that diversification in working styles does not create disparities.

According to the Ministry of Finance, this revision will ultimately increase tax revenues by over 86 billion yen in both the national and local governments.

Experts: responding to diversification of work styles

Regarding the review of this income tax deduction, Yasuji Yajima, chief economist at Nissay Basic Research Institute, said, "What is needed in Japan now is how society responds to diversification of work styles. The tax system has not yet caught up with the diversification of families and working styles, and further radical discussions are needed in the future. I think it's a good time. "

He added, "The tax system is a very strong policy, and there are people who have benefits and those who do not, so it is important to always be interested in what happens to the tax system related to your life and income." Is.