I have shifted positions this July to another department of my workplace, which length to an extension of my contract by an extra two years, and I have some confusion in understanding my finances, and even the English language information seems to be very confusing online.
Basically, to my surprise my income tax 所得税 decreased to 27970 JPY from 106184 JPY, despite getting a gross increase of 50000 JPY (from a gross salary of 520000 to 570000). After consulting at my workplace, they told me this is due to switching from being a non-resident to a resident, switching from 20.42% tax rate to 20%. I was confused about this explanation as this is 0.42% difference, but after trying a few calculators, I also see that this one (https://jp.icalculator.com/income-tax-rates/2024.html) ends up with a similar wage in net difference. As far as I understand, the reason being the higher standard deduction applied in case of a non-permanent resident tax payer.
As this leads to quite a significant difference in the net salary, I would be interested in checking a few things.
In my understanding of the criteria, I should have been classified as a non-permanent resident from the point of entry (as my work requires exactly one year). Am I eligible for some tax refund based on this?
Is there any rationale between this level of difference apart from the fact that it is expected as a short-term resident that I have more foreign income resources?
Why was my new position the "threshold" for being considered as a non-permanent resident, rather than my time being here?
by boomkin94