Goodbye ¥1.03 Million Wall? The New 2025 Tax Rules Explained
The government has raised the exemption limit. Find out how this frees you to earn more without losing benefits.
For years, the "1.03 million yen wall" limited how much dependents and part-time workers could earn without paying income tax. In 2025, to combat inflation and labor shortages, the government raised this ceiling (reaching ¥1.23 million or more in some cases).
What Changed in Your Paycheck?
This means you can work more hours without being penalized by taxes or losing your spouse's dependent deduction. This is excellent news for those doing arubaito or overtime. However, earning more requires more control.
Where Does the Extra Money Go?
It is common that as income rises, spending rises proportionally (so-called "lifestyle creep"). Without realizing it, the extra money from additional hours vanishes into small daily expenses, and you still end up saving nothing.
The AI Kakeibo Solution
AI Kakeibo helps you visualize exactly the impact of this income boost. Instead of letting the extra cash dissolve into daily life, the tool suggests categorizing this surplus as "Investment" or "Savings".
Use the new tax rule to build wealth, not just to spend more.