What Is the Real Cost of Living in Tokyo?

How much does it cost to live in japan?

A job offer is on the table and you’re considering moving to Japan for a change of perspective.

But you're having a hard time figuring out the cost of living in the Land of the Rising Sun? We can help.

We've analyzed the data and put together an overview to help you weigh the financial pros and cons. Here's what you need to know.

Where To Live

According to this year’s Mercer’s Cost of Living Survey Tokyo is the fourth most expensive city in the world.

So clearly it's not a cheap city. Still, rankings aren't everything. And Tokyo was also ranked the fourth most livable city in the world in 2021 so there's good news too. And even if you're on a budget, there might be ways to reduce the costs and make living there a reality.

By the way, we'll focus primarily on Tokyo in this article. But Osaka came down to #23 on the list above, and Nagoya's at #34. So those can be good options if Tokyo's out of your price range!

Now let’s dive into a more detailed breakdown of the costs for living in Tokyo.

1) Housing and utilities
2) Groceries and shopping
3) Communications and Internet
4) Transportation
5) Gym
6) Leisure and eating out
7) Taxes

Housing and Utilities

Moving to Japan and renting an apartment for the first time requires some financial investment – and a lot of patience. There are many aspects to take into consideration but expect to pay from three to five times the monthly rent of your desired property to kickstart your new experience in Japan.

Rent varies greatly depending on different factors:

• Metropolitan areas are usually much more expensive than the countryside, and, even within Tokyo, there is quite a difference depending on the area you decide to move to.
• The closer to the station, the higher the rent. If we consider the number of cars per household, the capital comes at the bottom of the list nationally, with just 0.45 cars. Since all companies provide reimbursement for transportation from house to office to their employees, many decide to move further away from the workplace to save some money, despite having to spend more time on crammed train carriages.
• Size and layout matter. In Tokyo, people are used to living in smaller spaces because rent gets high pretty quickly.
• Amenities, year built, construction materials also influence prices, so it's worth considering these less obvious components when looking for a place to live.

The average monthly rent for a one-room studio apartment of around 20-25 sqm costs around 80,000 yen ($727) in Tokyo. An apartment of the same size in Osaka will be just a little bit over 50,000 yen ($454).

Within the 23 districts that make up Tokyo's metropolitan area, the northern districts of Edogawa, Adachi, Nerima and Suginami are the cheapest in terms of rent (one-room apartment costs roughly 60,000 yen ($545) per month), while if you choose upscale Minato ward (that includes trendy Omotesando, Roppongi and Azabujuban) expect the rent to bump up significantly (average one-room apartment is about 110,000 ($1,000) yen).

If you can, avoid moving in late March. The Japanese fiscal year starts on April 1st and many contracts will also finish on the 31st of March, meaning that a high volume of people are moving at the same time, fighting for the same good apartments. Not to mention that moving companies raise their fees due to higher demand.

If you want to know more in detail about renting in Japan – the good, the bad, and the ugly – check out this blog post.

Moving to a new country and getting to furnish your new house from scratch is fun, but it still accounts for a major expenditure during the first month in Japan.

Electrical appliances are not expensive, and you can easily find a vast range of products that fit your budget in many common electronics retailer chains such as BicCamera and Yodobashi Camera. Many places also offer a “living alone starter pack” that includes one-person-size appliances combos such as a fridge, microwave or rice cooker, and washing machine.

Furniture-wise, bigger cities have a couple of straight-forward one-size-fit-all furniture and home accessories shops such as big chain Ikea and the local favorite Nitori. Japan has also a solid backbone of recycle shops and you can even find groups on Facebook where you can buy used items for a fraction of the original price or find even free stuff and swaps.

Utilities are determined by the size of your household – if you’re living alone or with your family – and by the dimension of your apartment, but generally speaking, the average expenditure is between 10,000 and 15,000 yen ($91 - $136) per month for one person. Electricity is the highest one of all utilities, at a monthly average of 5000-6000 yen ($45.4 - $54.5), followed by gas at around 3000 yen ($27), water and sewage charges at 2000 yen. ($18)

Here are some useful resources you can check to estimate more accurately the amount of your bills.

Public Utility Prices in Japan (Electricity, Gas, Water)

TEPCO: Calculating Your Electricity Bill in Japan

Groceries and Shopping

Groceries expenses vary widely depending on your lifestyle. The price of items ranges considerably depending on the supermarket and brands.

The average monthly expenditure for groceries is around 38,000 yen ($345.4) for one person. Note that, in particular, prices for fruit and vegetables are relatively higher than in Europe or the US, which is an element to take into consideration if you consume a lot of greens and fruit on a daily basis. Stick to Japanese products and seasonal foods to cut down the expenses and catch the deals at the end of the day in the ready-to-eat foods section at supermarkets.

A wide variety of shops also offer imported foods, which you might have to rely on when you start missing home, but they are usually 2 or 3 times more expensive than what you are used to in your home country.

For clothing, Uniqlo and Muji offer a good compromise between price and quality. Toiletries and snacks are available in the overwhelming number of drug stores and convenience stores open 24 hours. Toiletries are a little bit more expensive than what I was personally used to in Europe and many expats suggest coming to Japan stocked on toothpaste and deodorant.

Communications and Internet

Phone plans used to be very expensive in Japan but luckily in the last few years the government has been pushing carriers to cut down their costs. From April 2021 a myriad of new budget-friendly plans, that average at around 3000 yen ($27) for 20GB and different voicing options, has finally become available.

Setting up a reliable fast connection in your newly rented apartment will cost between 4000 to 8000 yen ($36 - $73) a month, depending on what service (ADSL, optic fiber, pocket wifi) and providers you choose. If you have to install a mobile router, installing and setting up the line will require an additional fee, which depends on the company, but be prepared to cough up at least 3,000 or 4,000 ($27 - $36) yen.

Leisure and Eating Out

Now, let’s talk about the fun stuff.

Eating and drinking out really comes down to where and what you eat. From high-end restaurants in Minato to budget-friendly family-owned local restaurants, the expenses are difficult to estimate. A meal at an average restaurant or izakaya (Japanese pub) is around 2000-4000 yen ($18 - $36) per person. Japan is renowned for all-you-can-eat-and-drink feasts, which are especially recommended if you end up eating in larger groups. Asking for separate checks is not very common in Japan, and a simple night out with coworkers can become expensive if you’re trying to save money

In a country where most of the people live far from their workplace and eat lunch out, almost all restaurants offer very convenient and cheap lunch sets at around 1,000 yen ($9) –if you’re not the meal-prepping type. You can also opt for a delicious bento, aka lunch box, sold at convenience stores and department stores for around 600 yen ($5.4).

Another nice thing about eating out in Japan is that you don't have to tip. This combined with the availability of cheap options makes eating out a great way to save money compared to other countries.

Transportation

Japan is one of the countries with the best transportation system in the world. Fast, 100% reliable, and also quite cheap. The cost of a ticket depends on distance and train line, and for an average 20-minutes ride it will cost you a couple of hundred yen ($1-3).

Employers cover employees’ traveling expenses, so most people buy commuter passes for unlimited travel between office and home or school.

The most comfortable way to travel inside Japan is to use bullet trains (shinkansen), for a pleasant and hassle/free ride. Shinkansen tickets, though, are very expensive: for instance, the cost of a round-trip from Tokyo to Kyoto costs roughly 25,000 yen ($227), that's why many people still prefer buses and "overnight buses", which take much longer but are still comfortable and reliable – we’re in Japan after all!

Owning a car in Japan is pretty expensive, mostly due to high parking fees within cities, mandatory inspections (called shaken), and car insurance. The transportation system in Tokyo is great should be sufficient in your daily life, and it is a better option to rent a car for some casual trips out of town. It is more reasonable to invest in a good bicycle to move around your neighborhood. Bike parking is cheap and can be found near every train station.

But with the myriad of public transportation options, most people don't miss having a car. And seeing as employers will cover your transportation to work, this can actually cut transportation costs quite a lot.

Gym

Gym membership in a fully equipped gym open 24 hours costs around 10,000 yen ($91) per month. A cheaper option is to look for a public gymnasium around your area, which will cost just a few hundred yen per entry. The downside is that they have shorter business hours and limited equipment and facilities.

Taxes

Consumption Tax

Consumption tax in Japan rose from 8% to 10% from October 1st, 2019. For food, beverages, and other daily necessities, a reduced tax rate of 8% is applied. From April 1st, 2021, in order to safeguard consumers, all price tags have to clearly show the final price comprehensive of consumption tax, while until now priority in size and font was given to the price before tax, giving the illusion of cheaper prices.

Income tax

Income tax starts at 10% for an income between 1.95-3.3 million yen ($17,727-30,000) per year and it is proportionate to wages. You can easily refer to the ward or city office you’re living in to know how taxation works in your particular case (some offices provide free Japanese to English interpretation services).

Social Insurance and Health Care

Employers must register all their employees in the national social insurance system (or shakai hoken in Japanese) which means that the employer will provide half of the premium. The national social insurance includes (employees’) health insurance, unemployment insurance, labor insurance, and the contribution to the national pension system as well, and it is comprehensive of a whole range of elements you should be taking into consideration if you wish to live in Japan long term. The premium is proportionate to salary, but it is roughly 10% for health insurance (it goes up for people over 40 years old), 18% for pension, and 0.5% for employment-related insurance.

Resident tax

Resident tax, also known as juminzei in Japanese, is another big financial element of your life in Japan that you need to consider. Foreigners residing in Japan have to pay resident tax after their first year in Japan. It amounts to 10 % of your previous year's income and it is deducted directly from monthly wage starting June of the current year. Juminzei comprises two parts: one part is paid to the local municipality and the other to the prefecture you live in. It can therefore change considerably depending on how much money you earn and where you live.

You get the general picture: depending on where you live and on the frugality of your lifestyle the monthly budget for living in Japan can go from as little as 150,000 yen ($1,363) to 300,000/400,000 yen ($2,727-$3,636) a month easily. But I can't emphasize enough how easy is to live in Tokyo: green areas; delicious and filling Japanese food for incredible prices; bars, cafes, and entertainment for every taste; easy access for a day trip to the seaside or a long weekend in the mountains. Did I also mention that Tokyo is one of the safest cities in the world? So do not be discouraged: Tokyo is so big it offers something for every budget!