By the HalfKey team
Starting a job in Tokyo: company housing or an allowance?
A housing allowance is extra salary, so part of it goes to tax and insurance before it reaches you. An apartment the company rents for you can cost you far less each month, but it is tied to the job. Find out which one your offer actually describes.
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If your Tokyo job offer mentions housing, find out which of three arrangements it is before you compare it with renting a place yourself. The Japanese names look similar, but the money and the leaving rules are different.
Three arrangements, three sets of rules
社宅 (shataku — company housing) is an apartment or building the company owns. 借り上げ社宅 (kariage shataku — company-leased housing) is an ordinary rental that the company signs for and lets you live in, usually taking part of the rent out of your pay. 住宅手当 (jūtaku teate — housing allowance) is cash added to your salary; you find and sign for the apartment yourself.
| Arrangement | Who signs the lease | What you pay | How the tax office treats it |
|---|---|---|---|
| Company housing | Nobody; the company owns it | A monthly charge set by the company | Not salary, if your charge is at least half the tax office's formula amount |
| Company-leased housing | The company | A share of the rent, deducted from pay | Same rule as company housing |
| Housing allowance | You | The full rent, from your salary | Ordinary salary: income tax, resident tax and social insurance apply |
The first two can be much cheaper for you than the third, even when the allowance looks generous on paper.
Why the allowance shrinks before it reaches you
The National Tax Agency lists a housing allowance among the payments that count as salary, together with overtime pay and family allowances (Tax Answer No. 2508). The Japan Pension Service also counts 住宅手当 in the monthly pay used to set your pension and health insurance premiums (厚生年金保険の保険料). So a ¥30,000 allowance raises your pay by ¥30,000 and your deductions with it.
Housing the company provides works the other way round. Tax Answer No. 2597 says that if you pay the company at least 50 percent of the 賃貸料相当額 (chintairyō sōtōgaku — the formula rent), nothing is added to your taxable salary. The formula uses the property-tax values of the building and land plus the floor area, not the rent the company pays the landlord, so the two figures can be very different. In the agency's own example the formula rent is ¥10,000 a month, and an employee paying ¥6,000 owes no tax on the difference.
Two details in the same answer matter for new arrivals. The rule applies whether the company owns the apartment or rents it from someone else. And if you sign the lease yourself and the company pays or refunds the rent, that money is taxed as salary; the saving only exists when the company is the tenant.
Social insurance uses its own price for housing. The Pension Service values an apartment your employer provides with a table set by the health ministry. For a workplace in Tokyo the figure is ¥1,330 per square metre of total floor area per month from 1 October 2026, so a 40 m² apartment counts as ¥53,200 (現物給与価額一覧表, 令和8年度 PDF). The rent the company takes from your pay is subtracted from that figure. If you pay ¥53,200 or more, nothing is added to the pay your premiums are based on.
An invented example
Take a 40 m² apartment that rents for ¥120,000 a month, and suppose its formula rent is ¥20,000. The numbers below are made up to show the shape of the comparison, and the 30 percent deduction rate is an assumption, not your rate.
| Allowance of ¥30,000 | Company-leased, you pay ¥55,000 | |
|---|---|---|
| Rent paid to the landlord | ¥120,000 by you | ¥120,000 by the company |
| Added to your pay for income tax | ¥30,000 | ¥0 (¥55,000 is more than half of ¥20,000) |
| Added to your pay for social insurance | ¥30,000 | ¥0 (¥55,000 is more than the ¥53,200 valuation) |
| Tax and insurance on the extra pay, at 30 percent | ¥9,000 | ¥0 |
| Your monthly housing cost | ¥99,000 | ¥55,000 |
The allowance line works like this: ¥30,000 arrives, ¥9,000 leaves in tax and insurance, so ¥21,000 helps with the rent, and ¥120,000 minus ¥21,000 is ¥99,000. In the company-leased column you simply pay your ¥55,000 share.
The two rules are checked separately. If the company charged you ¥40,000 instead of ¥55,000, income tax would still be zero because ¥40,000 is above half the formula rent, but ¥13,200 (¥53,200 minus ¥40,000) would be added to the pay your insurance premiums are based on.
The allowance case also leaves you paying the move-in costs yourself: the deposit, any 礼金 (reikin — key money, a payment to the landlord that you don't get back), the agent's fee, and the fee of the 保証会社 (hoshō-gaisha — guarantee company, the firm that promises the landlord your rent will be paid). In company-leased housing the company's housing rules say whether it pays those in full or passes a share to you. Ask which.
What happens when you leave
With company-leased housing the lease belongs to the company, so leaving the company normally means leaving the apartment. The company's 社宅規程 (shataku kitei — housing rules) set the deadline. Ask for the number of days you get after your last working day, and whether the company would let you take the lease over in your own name. A transfer means the landlord and guarantee company screen you again as a private tenant.
With an allowance, the lease is yours and nothing changes except your pay. You keep the apartment, the notice period in your own contract applies, and you lose the allowance from your final salary.
Questions to settle with HR before you fly
Get these answered in writing, ideally by asking for the housing rules themselves.
- Which of the three arrangements is it, and who signs the lease?
- Who pays the move-in costs: deposit, key money, agent fee, guarantee company fee and fire insurance?
- Can you choose the apartment, and is there a rent cap or a list of approved buildings?
- From what date is the apartment available? If it starts after you land, you'll need a hotel or a furnished monthly apartment for the gap, and you should know who pays for it.
- How much is deducted from your pay each month, and how did the company set that figure?
- How many days do you have to move out if you resign or are let go?
- If you rent privately with an allowance, will HR give you a letter stating your start date and salary before your first payslip exists?
UR, the public rental corporation, tells applicants employed for less than a year to submit an income certificate on UR's own form together with a copy of their employee ID (UR 必要書類). Private landlords and guarantee companies set their own lists. Ask the agent whether the guarantee company accepts an employment contract or offer letter in place of payslips before you send anything.
If you decide to rent on your own
Compare the allowance after deductions with the company's offer using your own numbers. Our no-guarantor guide covers the application routes open to someone without a Japanese guarantor, and the documents guide lists what to prepare before you send copies of anything.
If the company offers to reimburse a lease you sign yourself, remember the tax point above: the reimbursement is salary, and part of it goes to tax and insurance. Ask HR whether it can rent the apartment in the company's name and deduct your share from pay instead. Then ask two questions about that monthly payment: does any part of the housing benefit still count as taxable salary, and does any part still count as pay when your insurance premiums are worked out? Ask separately who pays the move-in costs.