New job offer as Gyomu Itaku (currently 契約社員)

8 comments

1. There are a lot of calculators like [this](https://www.mmea.biz/simulation/solo_calculation/) online where you can put in your details and figure out if it works for you.

   – Health insurance will be considerably more, 700,000ish.
   – Pension will be less 16,000ish
   – You will not have unemployment insurance so that will be 0!
   – Income tax will be significantly higher unless you max out your Ideco (800,000ish) and still then it will be more than you pay now. The reason being you will no longer be eligible for the employment income tax deduction. (No, the blue form deduction will not make up for this)

   Additionally if the company insists on you being a qualified invoicer, you will lose an additional 3-4% a year.

   429,000 –> 520,000 seems too low to me.

2. When you say 業務委託, does it mean you will setup a 個人事業 in your name?

3. An accountant can take care of the issues you mention or as many will undoubtedly chime in, pay for free. In many cases, you can reduce your insurance and pension amounts significantly.

4. Sounds like you are a business owner when changing to that. Your tax is no longer salary based. This is what I could gather from the internet. https://scalingyourcompany.com/ultimate-guide-to-corporate-tax-in-japan/#:~:text=The%20national%20rate%20of%20corporate,External%20Trade%20Organization%20(JETRO).

5. > How much more will I have to pay if I change to this new job?

   Most of the differences between being a business operator (gyomu itaku, etc.) and being an employee are not measurable in simple financial terms, because they are hard-to-quantify things like “loss of labour law protections”, “loss of worker’s compensation insurance”, “loss of unemployment insurance” and “liability for professional negligence”. There is some more detailed information in [this section](https://japanfinance.github.io/quick-start/essentials/#employees-vs-service-providers) of the wiki.

   In most cases, it doesn’t make sense to become a business operator unless you are seeking the freedoms that are only available to business operators, such as the ability to control your workload, have multiple clients, choose your workplace, set your own working hours, employ your spouse, etc.

   From a tax perspective, being a business operator means gaining the ability to deduct actual expenses and losing the automatic [employees’ expenses allowance](https://www.nta.go.jp/taxes/shiraberu/taxanswer/shotoku/1410.htm). Whether this means your net income (income after expenses) is higher or lower than it was as an employee depends entirely on the types of expenses associated with your work. If your work involves significant expenditure, then your take-home pay might be higher as a business operator. But if your work involves very little expenditure, your take-home pay would be higher as an employee.

   To make things more complicated, things like the blue-type tax return filing deduction (available to business operators who commit to certain bookkeeping practices) and the ability to employ your spouse can offset the loss of the employees’ expenses allowance, but it’s very much case-by-case.

   As a business operator, you will need to enrol in national health insurance, and national health insurance premiums vary *significantly* between municipalities. So you would need to check your municipality’s premiums to compare your current premiums to the amount charged by your municipality. Though it’s worth noting that business operators can choose to stay enrolled in employees’ health insurance for up to two years after they stop being an employee, which can be a cheaper option than joining national health insurance (search for past threads on this topic).

   Your pension contributions will be lower as a business operator, because they are not determined by your income. However, your accrued pension benefit will also be lower.

   > going through the whole “process” of paying taxes myself every month

   Business operators don’t have to report their income or pay income tax monthly. Business operators pay their annual income tax bill when they file their annual tax return. If their annual income tax bill is more than 150,000 yen, the NTA will ask them to make [prepayments](https://www.nta.go.jp/taxes/shiraberu/taxanswer/shotoku/2040.htm) in July and November of the following year. There is no monthly reporting, though.

6. What would your working hours look like? Would this new place basically expect to get a full-time worker, but without providing you any of the stability or perks you’d normally get as a 契約社員 or 正社員? If so, I personally wouldn’t take the position, even if somehow I got nominally more money per month–they could stop giving you work at any time, and there’s also a chance that 業務委託 would look worse on your resume for any future employers. It’s a better sign if you’re in a more stable role, since it signifies that the company wanted you badly enough to take on more responsibility as an employer.

   Also, is there a chance that in a couple of years at your current job, you’d be able to become a permanent employee (無期契約社員)? That would tip the scales even further in favor of not going for this new position.

7. Redditors seem not to like this opinion, but my understanding is that companies choose gyomu itaku because it’s cheaper for them. They can eliminate the social security cost and effectively fire you when they want by not updating the contract.

   So, while I have a friend who took advantage of this type of work, you should understand that they’re taking advantage of *you*.

   Edit: the fact that you have to ask it on Reddit to gather solid information shows that they’re not keen on informing you. More so given that you are probably a foreign worker who’d be disadvantaged on information gathering. You even don’t know the official term for this contract (likely kojin-jigyou-nushi).

8. If you care about job security at all I wouldn’t take gyomu unless you are paid substantially more (the numbers you indicate no) or there is some specific other reason. I’ve hired all of the above and have ran into 1-2 that would only do gyomu because they own a business.

   Otherwise gyomu or dispatch is bottom of the barrel.