All the different types of tax which is taken out of your pay here is pretty ヤバイ
If you were to get promoted with an increase in pay and more pressure at work, wouldn’t the majority of the money just go to taxes, rendering the pay raise essentially useless, and you’d then have all this pressure at work with barely any extra money going into your pocket?
How many people here have worked hard for a pay rise only to find that there’s barely any difference in your take home pay?
10 comments
Welcome to being an adult. In a nutshell, no. Any increase, assuming that the tax rates don’t change is a salary increase.
That’s not how taxes work. Just because you make more doesn’t mean your entire income is taxed at an increased rate. Just the amount over the thresh hold is taxed at a higher rate. The everything else is taxed as it was. So, yes. You’re still making more after your raise. I got an 8% raise this year and it feels great, especially with costs rising so much recently.
Tax brackets don’t work that way. Only the amount in that bracket is taxed at that rate. A pay raise is a pay raise. Someone making over 1000万 is still going to take home more than someone making 800万円 despite paying a higher rate on the amount over 900万.
There’s only one weird area around 9-10m salary where you suddenly lose a lot of benefits like free daycare, free healthcare for your kids, monthly child allowance etc. It depends on your taxable income and also which prefecture/city you live in, pretty complex stuff. So a small raise in that range could actually lose you a lot of money. Other than, pay raises are great.
You might as well start your own business 😂
OP, say it with me: any increase in income tax from a tax bracket change is only applicable to the portion of your income above that new tax bracket level – it’s not applicable to your entire income. No salary increase will ever make you earn less money due to jumping tax brackets – no society would accept such a system.
I mean OP isn’t wrong in the sense that the increase in pressure and stress is more than the increase in financial benefit.
Just gotta ask yourself if you enjoy stress or not
Tax is inside range. There’s some rare cases that getting promo will make u pay lot more tax but is like going from 90k us to 130k.
I got 8% yesterday but still inside my range so I won’t pay more tax.
It certainly does move you towards a how can you decrease your costs theory of mind.
When you realize that a 60,000 yen cost reduction is actually worth 100,000 yen pay increase etc…
Edit:
If you have crunch time on a project or get a bonus, there is a certain tax calculation here that if you concentrate all that overtime or get that bonus in a 3 month time period, you can actually increase your taxes compared to if you spread it out over the year.
*The Standard monthly remuneration will be notified to company by the “Health Insurance / Employee Pension Standard Insured Persons Notification Form”, which is calculated by the average of wages from April to June*
Marginal tax rates ought to be a class in school. Its so heavily misunderstood by absolutely everyone.
However, your concerns about pay versus stress are valid. I often wonder whether its worth it. Did the maths at my old job in the UK and if I took a promotion to a far more stressful position, I’d be about £40 better off a month. Fuck that! Stayed in my slobby low level position and kept on chugging until I moved here.