[Latest version 2025] What is the optimal amount for a self-employed barber shop owner to save on taxes on "full-time employee salary"?

Who is this article for?

This article explains in an easy-to-understand way how much salary you should pay to your spouse to save the most on taxes if you are running a barber shop as a sole proprietor in Japan and your spouse is working as a "blue tax-exclusive employee" or is planning to work for you in the future.

For example, if your wife helps you with reception, reservations, cleaning, updating your social media accounts, etc., you can expect to save a lot on taxes by paying her a salary and recording it as an expense. However, depending on the amount you pay, your taxes and social insurance premiums may actually go up.

So, in this article, we will carefully explain how much you should pay to get the best deal based on the latest system in 2025.

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What is a full-time employee's salary?

"Blue-form business dependent salary" refers to the salary paid by a sole proprietor who files a blue-form tax return to his or her spouse or relatives aged 15 or older as compensation for working in the business .

This salary is a powerful tax-saving measure that allows you to claim the entire amount as a necessary expense if you notify the tax office in advance. However, the amount of the salary must be "commensurate with the content of the work."

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Why is salary important?

If your salary is too low, the tax savings will be minimal, but if it is too high, your spouse will have to pay income tax, local taxes, and social insurance premiums, which could reduce the household's overall take-home pay .

The ideal situation is to reduce the employer's income tax, local resident tax, and national health insurance, while minimizing the spouse's tax and insurance burden. To do this, it is necessary to know how much you can pay without losing out.

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"Tax saving line" as of 2025

Salary (annual income)	Spouse's take-home pay (estimate)	Tax and social insurance burden	Amount recognized as an expense by business owners	comment
Up to 1,030,000 JPY	About 1.03 million yen	No income tax or resident tax. Reduced national pension and national health insurance.	1,030,000 JPY	Safest and no tax burden
1.1 million yen	About 1.09 million yen	Resident tax is small (up to 7,000 yen)	1.1 million yen	Almost no tax burden, expenses increase
1.28 million yen	Approx. 1.25 million yen	Income tax + resident tax total about 30,000 yen, national health insurance slightly increased	1.28 million yen	Good handle and balanced
1.5 million yen	About 1.44 million yen	Income tax + resident tax total about 60,000 yen, national health insurance increase	1.5 million yen	Great tax savings and good take-home pay

*National pension (approximately 200,000 yen) is borne by the individual in all amounts.

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Meaning and explanation of each line

◆ The 1.03 million yen wall (the safest tax-free zone)

・The line where neither income tax nor resident tax is levied. Take-home pay = full amount.
- If you spend less than this amount, you won't have to worry about taxes. Modest but safe.

◆ The 1.06 million yen and 1.3 million yen barriers (social insurance points to note)

・If your income exceeds 1.06 million yen, you are required to enroll in social insurance if you are the spouse of a company employee.
- If you are a privately owned business such as a barber shop, there will be no impact unless you are enrolled in social insurance.
・In some cases, if your income exceeds 1.3 million yen, you will no longer be considered a "dependent." However, this is not an issue for those who are National Health Insurance subscribers.

◆ The 1.28 million yen barrier (residents' tax starts in earnest)

- There is a tax burden, but it is minor.
- It has a good balance with the tax savings effect (expenses) for business owners, and is recommended in many cases.

◆ 1.5 million yen line (maximum tax-saving zone)

・Taxes on spouses will increase, but the expense effect for business owners will be even greater.
-If your spouse has a lot of work, there is no harm in paying this much.

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Conclusion: What's the best amount for you?

• I want to prioritize my wife's take-home pay → 1.03 million yen or less

• A good balance between taxes and take-home pay → 1.28 million yen

• I want to expense it and save on taxes → Nearly 1.5 million yen

Full-time employee pay is the most powerful tool to express your gratitude to your family in the form of tax savings. If used correctly, it can be a weapon to greatly improve the cash flow of your barber shop.

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Points to note

• You must submit a "Notification of Blue Business Employee Salary" to the tax office.

• The salary must be "reasonable" for the work content.

• It is important to have a record of actually paying wages by bank transfer, etc.

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summary

If you run a family barbershop, the employee salary system is a "no use, no loss" system. Use this article as a reference to design the optimal salary amount and save on taxes without straining yourself!