Can You Claim Japan's Medical Expense Deduction Under 100,000 Yen? The 5% Rule Below 2 Million Yen

100,000 yen or 5% of income

With the medical expense deduction, a set amount is subtracted from the medical costs you paid (after amounts covered by insurance and the like), and what remains is the deduction. This subtracted amount (the threshold) is the lesser of 100,000 yen and 5% of your total income.

At a total income of 2 million yen, 5% is exactly 100,000 yen. So with total income of 2 million yen or more, the threshold is 100,000 yen. Below that, it's smaller, and you may be able to claim the deduction even with medical costs of 100,000 yen or less.

The threshold by salary

These thresholds are for people with salary income only, using the employment income deduction for 2025 onward. Employment income reaches 2 million yen at a salary of about 2.97 million yen, so employees and part-timers earning less than that have a threshold below 100,000 yen.

For people 65 or older with only pension income, the public pension deduction is 1.1 million yen (with pension income of 3.3 million yen or less). So a pension of 2 million yen means miscellaneous income of 900,000 yen and a threshold of 45,000 yen. If you have other income, such as from a side job or real estate, it's 5% of the combined total.

How much actually comes back

A lower threshold means nothing if there's no tax to return. These examples are for a single employee under 40 with no other deductions.

Someone earning 1.5 million yen pays no income tax to begin with, so there's no income tax refund, only a lower resident tax the next fiscal year. If the income-based portion of resident tax doesn't apply either, as with a salary of 1.2 million yen, nothing comes back even if a deduction arises. Lower incomes have lower thresholds but also lower tax rates, so expect the amount returned to often be just a few thousand yen.

Options when you don't reach 100,000 yen

• Combine family medical costs: one person can total the costs of family members who share living expenses. Even if your own costs fall short of 100,000 yen, adding a spouse's or child's may take you past it
• Have a lower-income family member file: in a dual-income household where one earns little, the threshold is lower if that person files. But they only get money back if they're paying income tax or resident tax
• Consider the self-medication tax system: if you bought over 12,000 yen of over-the-counter medicine, this system's smaller threshold may work out better
• Look back at past years: if costs were high in a year with childbirth or hospitalization, you can file for up to 5 years back

Which family member gets the most back depends on both income tax rate and threshold. See which spouse should file the medical expense deduction for how to compare, and the self-medication tax system vs the medical expense deduction for the over-the-counter medicine option.

If you pay no income tax, a resident tax filing also works

People with low incomes who have no income tax withheld have no income tax to be refunded even if they file a tax return. In this case, instead of filing a tax return with the tax office, you can file a resident tax declaration with your city, ward, town or village and include the medical expense deduction. Forms and filing periods differ by municipality, so check your local government's website.

• If you file a tax return, the information is sent to your municipality, so there's no need for a separate resident tax declaration
• Including the deduction in a resident tax declaration doesn't return income tax. If income tax is withheld from your pay, file a tax return
• The resident tax reduction applies to the next fiscal year (from June). Part-timers who don't have resident tax deducted from their pay will see lower amounts on the payment slips they receive
• Many municipalities calculate the income-based portion of National Health Insurance premiums from total income minus the basic deduction (430,000 yen), so the medical expense deduction generally doesn't lower them

Check your threshold with the tool

In the Calculate refund tab of the Medical Expense Deduction Refund Calculator, enter your salary and medical costs. It automatically determines whether your threshold is 100,000 yen or 5% of income, and it also shows how much more in medical costs you'd need before a deduction arises. If you have income other than salary, such as from a side job or pension, switch to From withholding slip / tax return and enter your total income directly.

How the refund is calculated from the deduction is covered in how much the medical expense deduction returns.

FAQ

Can I get the deduction with medical costs of 100,000 yen or less?

You may be able to if your total income is under 2 million yen. The threshold is 5% of total income rather than 100,000 yen, so someone with a 1.5 million yen salary (850,000 yen of employment income) can deduct the part of their medical costs above 42,500 yen.

What salary does income under 2 million yen mean?

With salary income only, it means a salary under about 2.97 million yen. Income of 2 million yen is the amount after the employment income deduction, so it isn't a 2 million yen salary. You can check the "amount after employment income deduction" on your withholding slip.

I work part-time and earn 1 million yen a year. Will the deduction help me?

At 1 million yen, you often pay neither income tax nor resident tax, so the deduction returns nothing. If a family member pays income tax, it's better for that person to file for everyone.

Is the 5% calculated on income after income deductions?

It's calculated on total income before them, not on taxable income after deductions such as social insurance premiums or the basic deduction.