How Much Do You Get Back from Japan's Medical Expense Deduction? Calculation and Refunds by Income

The formula for the deduction

The medical expense deduction (Article 73 of the Income Tax Act) lets you subtract from your income the part of your medical costs paid from January 1 to December 31 that exceeds a set amount. The deduction is calculated with this formula.

Reimbursed amounts are money received to cover medical costs, such as hospitalization benefits from life insurance and high-cost medical care benefits or childbirth lump-sum allowances from health insurance. Money received in place of pay, such as sickness allowance when you take time off work, isn't subtracted. The 100,000 yen (or 5%) you subtract is called the threshold, and up to that amount nothing is deductible.

What comes back is deduction × tax rate

The medical expense deduction is an income deduction, so the deduction itself doesn't come back. Your taxable income falls by the amount of the deduction, and your tax falls accordingly. Two taxes are reduced.

• Income tax: deduction × income tax rate (5–45%) × 1.021 (special reconstruction income tax). For employees, tax withheld from pay is refunded through a tax return
• Resident tax: deduction × 10%. Your tax return details are sent to your municipality, and resident tax for the following fiscal year (from June) falls. This isn't paid to you. Your deductions from pay or payment amounts go down

For example, take a single employee earning 5 million yen (under 40, no other deductions) who paid 300,000 yen in medical costs in a year. The deduction is 300,000 yen − 100,000 yen = 200,000 yen. At a 10% income tax rate, the income tax refund is 20,420 yen and next year's resident tax falls by 20,000 yen, for a total of 40,420 yen returned or reduced.

Chart by income and medical costs

These are the combined income tax refund and resident tax reduction for a single employee under 40 with no other income deductions (such as spouse or life insurance deductions). Social insurance premiums are calculated from income at the Japan Health Insurance Association (Tokyo) rate.

Higher income means a higher income tax rate, so the same costs return more. But for incomes of 1.5 to 2 million yen, the threshold is less than 100,000 yen (5% of total income), so costs of 150,000 yen return more than at incomes of 3 to 4 million yen. The 1.5 million yen row tops out at 19,800 yen because there's no income tax to begin with, and that's all the resident tax there is to reduce.

No income tax means no refund

The refund is capped at the income tax you've already paid (had withheld). From the 2025 tax year, the minimum employment income deduction rose to 650,000 yen and the income tax basic deduction to a maximum of 950,000 yen. So someone with only employment income and social insurance pays no income tax up to the 1.8 million yen range, and the deduction returns no income tax at all.

Resident tax has a smaller basic deduction (430,000 yen) than income tax, so even with no income tax you often still pay resident tax, and that part falls. If you pay no income-based resident tax either (under the same conditions, up to about 1.26 million yen a year), the deduction returns no tax. It's better for a family member who pays income tax to claim the family's medical costs together.

Tax return steps and deadline

Even for employees, the medical expense deduction isn't available through year-end adjustment and requires a tax return. A return to get a refund (a refund return) can be filed from January 1 of the following year.

1. 1

   Total up your medical costs

   Using receipts and the medical expense notices from your health insurance association, total the amounts by family member and by hospital or pharmacy. If you link to Mynaportal, medical cost information can be filled in automatically in e-Tax.

2. 2

   Prepare the medical expense deduction statement

   Since the 2017 tax year, you submit a statement instead of attaching receipts. For parts covered by a medical expense notice, you can skip filling in the statement. Keep receipts for 5 years.

3. 3

   Prepare your withholding slip and make the return

   In the National Tax Agency's online tax return preparation service, enter your withholding slip figures and medical costs to calculate your refund. If you made furusato nozei donations, enter the donation deduction here too.

4. 4

   File it and wait for the refund

   It's paid into your designated account in about 3 weeks with e-Tax, or about 1 to 1.5 months on paper. The resident tax reduction is reflected from the following June.

Calculate your own refund with the tool

In the "Calculate refund" tab of the Medical Expense Deduction Refund Calculator, enter your medical costs, reimbursed amounts and income to see the threshold, deduction, income tax refund and resident tax reduction with a breakdown. If you have your withholding slip at hand, switch to "From withholding slip / tax return" and enter your income after the employment income deduction and your total income deductions, and the result reflects spouse and life insurance deductions too.

If your costs don't reach 100,000 yen, see using the medical expense deduction under 100,000 yen. Which family member should claim is covered in which spouse should claim the medical expense deduction, and what's eligible in a list of what the medical expense deduction covers. For how income and resident tax rates work, see also how income and resident tax are calculated.

FAQ

How much do I get back with 300,000 yen in medical costs?

The deduction is 200,000 yen, and what comes back depends on your income tax rate. For an employee earning 5 million yen (10% rate), the income tax refund of 20,420 yen and next year's resident tax reduction of 20,000 yen total 40,420 yen. At 7 million yen (20% rate), the total is about 60,840 yen.

When is the medical expense deduction refund paid?

About 3 weeks if you file with e-Tax, or about 1 to 1.5 months on paper. Resident tax isn't paid to you. It's reflected as a reduction in resident tax from the following June.

Can I get the medical expense deduction through year-end adjustment?

No. It's only available through a tax return, so employees also file a refund return from January 1 of the following year. Refund returns can go back 5 years.

Do I really not need to submit my medical receipts?

Since the 2017 tax year, you submit a medical expense deduction statement instead of receipts. Receipts don't need to be submitted, but you have to keep them for 5 years from the filing deadline so you can show them if the tax office asks.