Urisen income and tax: income categories, expenses and resident tax in one place

In this industry, pay is often handed over in cash at the end of each day (日払い). Unlike a salary, no tax has been deducted, so everything you receive stays in your hands. The problem comes the following year. When the tax bill arrives, the money to pay it is gone. That is the most common mistake with this way of working.

Tax is tedious, but there is not much to learn. This article uses only information published by the 国税庁 (National Tax Agency) and by local governments, and covers only what you need to make decisions.

1. First, work out which situation you are in

How you are taxed depends on whether you do this work as a side job alongside a company job, or whether it is your only source of income.

If you do this as a side job while employed

If you receive a salary from one employer and all of it is subject to 源泉徴収 (withholding tax), you must file a tax return if the total of your income other than salary income and retirement income exceeds ¥200,000.

The ¥200,000 here is income (所得), not revenue. What counts is whether the pay you received, minus your expenses, comes to more than ¥200,000. If you receive ¥20,000–30,000 a month in back (バック, your share of what the customer pays), assume you will probably exceed it over a year.

If this work is your only income

The 基礎控除 (basic deduction) changed from the 2025 tax year (令和7年分). For total income of ¥1,320,000 or less, it was ¥480,000 up to the 2024 tax year (令和6年分) and is ¥950,000 from 2025 onward. For total income over ¥1,320,000 and up to ¥3,360,000, it is ¥580,000 for 2025 and 2026 (令和7年分・令和8年分). If you go by the old rule, “file once you exceed ¥480,000”, you will get the answer wrong.

The internet is still full of explanations saying you do not need to file unless you exceed ¥480,000, but the threshold changed from the 2025 tax year (令和7年分). If you go by old articles, you may not realise you need to file.

2. Type of income: 事業所得 or 雑所得

The income category you report your pay under decides which systems you can use. The calculation itself is the same for both.

• 事業所得 (business income)｜事業所得 (business income) is calculated as “total revenue − 必要経費 (necessary expenses)”.
• 雑所得 (miscellaneous income, business-related)｜Miscellaneous income from business activities (業務に係る雑所得) is also calculated as “total revenue − necessary expenses”, and the tax is worked out after adding it to salary income and other income. From the 2022 tax year (令和4年分), if your revenue from such miscellaneous income two years earlier exceeded ¥3 million, you must keep records of cash and bank transactions (現金預金取引等関係書類). If it exceeded ¥10 million, you must also attach a statement of income and expenses (収支内訳書) or similar documents.

For miscellaneous income, the record-keeping rules are clearly set out. If your revenue two years earlier exceeded ¥3 million, you must keep records of cash and bank transactions (現金預金取引等関係書類), and above ¥10 million you must also attach a statement of income and expenses (収支内訳書) or similar. If you are paid in cash each day, no record is left behind, so when these rules apply to you, you are the one who will have a problem.

Which category you should file under depends on how you actually work (how continuous it is, its scale, whether you have another main job, and so on). Once the amounts grow, we recommend checking once with the 税務署 (tax office) or a 税理士 (licensed tax accountant). You can ask for advice free of charge.

3. What counts as an expense

You are not taxed on the full amount you receive. Costs you incur for the work can be deducted. These are the ones that can actually arise in this line of work.

• Transport to and from the shop (the part you pay yourself)
• Clothing and grooming bought for work, for the part used for work
• Phone and data costs for work contacts, for the share used for work
• Health costs you can explain as necessary for the work, such as testing for sexually transmitted infections
• Items used only for work

There are two things to watch. The first is that for anything you also use in private life, you can only claim the share used for work (this is called 家事按分, apportionment). You cannot claim your whole phone bill as an expense.

The second is that without receipts you cannot explain anything. This work involves a lot of cash, so unless you make a point of keeping records, you will be left with nothing. Do not throw receipts away, and when you can pay by e-money or card, choose the method that leaves a record. That alone makes a huge difference later.

4. 住民税 (resident tax): think about it separately from income tax

The ¥200,000 rule applies only to income tax. 住民税 (resident tax, the local tax paid to your city and prefecture) has no such exception. Municipalities advise that an employee who has ¥200,000 or less of income other than salary, and who does not file an income tax return, still has to file a resident tax declaration (市県民税の申告).

In other words, “my income is ¥200,000 or less, so I don’t need to do anything” is wrong. Even if you do not need to file an income tax return, you must file a resident tax declaration with the local government where you live. It can all be done at the municipal office counter.

5. If you do not want your main employer to find out

The most common way a side job reaches your main employer is the resident tax notice. Resident tax is deducted from your main salary (a system called 特別徴収, special collection), so if the resident tax on your side income also goes through your main employer, they may notice from the odd amount.

In the section 「住民税に関する事項」 (matters concerning resident tax) on page two (第二表) of the tax return, you can choose 「自分で納付」 (“pay it yourself”, called 普通徴収, ordinary collection) as the way resident tax on income other than salary and public pensions is collected. If you leave it blank, the resident tax on your non-salary income is also collected by 特別徴収 (special collection: deducted from your salary).

6. What to do now if you are paid daily

Assume that daily cash pay has most likely not had tax withheld (源泉徴収). Avoiding the situation where nothing is left when tax is due the next year is simple.

1. Record what you receive the same day. Just the date and amount is fine. A note on your phone is enough.
2. Keep expense receipts in one place. An envelope or a box will do. What matters is not throwing them away.
3. Set aside the tax money in a separate account. The right amount is estimated from your income category and deductions, but until you know, keeping about 20% of what you receive in an account you do not touch will stop you from falling far short.

Whether you do these three things makes all the difference when filing season comes. The actual filing steps are in how to file your tax return.

Where to get advice

The 税務署 (tax office) answers questions about your return free of charge. You will not be turned away because of your occupation. If your income or contract is complicated, consulting a 税理士 (tax accountant) can end up costing less.

For unpaid fees or contract problems, there are separate contact points from tax. Our guide for people working in this industry lists public contact points such as フリーランス・トラブル110番 (the Freelance Trouble Hotline) and the 総合労働相談コーナー (General Labour Consultation Corners).

We are not tax professionals. This article organises information published by the National Tax Agency and local governments. Tax rules change every year. For decisions about your own situation, always check with the sources above, the tax office, or a tax accountant.