How furusato nozei works
Furusato nozei (ふるさと納税, “hometown tax”) is a donation to a Japanese municipality that the tax system treats almost like a prepayment of your own tax. You donate, your tax goes down by the donation minus ¥2,000, and the municipality sends you a gift.
What actually happens to your money
Take a single employee earning ¥6,000,000 who donates ¥77,000 across a few towns in 2026.
| Amount | |
|---|---|
| Paid to the towns in 2026 | ¥77,000 |
| Taken off tax afterwards | ¥75,000 |
| Real cost | ¥2,000 |
| Gifts received (up to 30% of donations) | up to ¥23,100 |
You do not pay less tax overall. You pay ¥2,000 more, and in exchange you receive gifts worth far more than ¥2,000. The towns you chose receive tax revenue that would otherwise have gone to the city where you live.
The ¥2,000
The ¥2,000 is charged once per year, not once per donation. Donating to one town or to five costs the same ¥2,000.
The gift
Municipalities may send a gift worth up to 30% of the donation, and it has to be a local product or service. Typical gifts are rice, beef, seafood, fruit, beer, everyday paper goods, and accommodation vouchers. Delivery takes anywhere from a few days to several months, and seasonal fruit ships when it is ripe.
The limit
You can donate any amount, but only donations up to your limit are refunded in full (minus the ¥2,000). The limit grows with your income because it is tied to the resident tax you pay. Rough guide for a single person:
| Annual salary | Limit (estimate) |
|---|---|
| ¥4,000,000 | ¥42,000 |
| ¥6,000,000 | ¥77,000 |
| ¥8,000,000 | ¥129,000 |
| ¥10,000,000 | ¥179,000 |
Use the calculator for your own number.
How the limit is calculated
The deduction has three parts: an income tax deduction, a basic resident tax deduction, and a special resident tax deduction that covers the remainder. The special part is capped at 20% of your resident tax income levy (所得割額), and that cap is what sets your limit:
limit ≈ resident tax income levy × 20% ÷ (90% − your income tax rate × 1.021) + ¥2,000
The income levy is 10% of your taxable income for resident tax: salary, minus the employment income deduction, minus social insurance, minus personal deductions such as the basic, spouse and dependant deductions. Anything that lowers taxable income, such as iDeCo contributions or a medical expense deduction, lowers the limit too.
There is also a rule that donations deductible from income tax cannot exceed 40% of your total income. Salaried workers practically never reach it.
Our calculator follows this formula. For a salary between ¥3M and ¥9M with standard deductions, its results match the guideline table published by the Ministry of Internal Affairs and Communications.
When the tax comes back
- One-stop exception: the whole deduction is taken from next year’s resident tax. Your monthly resident tax from June to the following May is lower. You do not receive a refund in cash.
- Tax return: part comes back as an income tax refund, usually four to six weeks after filing, and the rest lowers next year’s resident tax.
The total is the same either way. See one-stop exception vs tax return.
What you need
- Income taxed in Japan this year.
- A residence registration in Japan on January 1 of next year.
- A card (or other payment method) in your own name. The donor name must be the taxpayer’s name as written on the residence record.
- Your My Number, for the one-stop form.
Common mistakes
- Donating in a spouse’s name. The deduction belongs to the person named as donor. If you earn the income, the donation must be in your name, from your account.
- Paying after December 31. The payment date decides the tax year.
- Forgetting the one-stop forms. No form and no tax return means no deduction.
- Filing a tax return after sending one-stop forms without listing the donations. A tax return cancels every one-stop application for that year.
- Using last year’s limit after a pay cut or a long leave. The limit follows this year’s income.