Public Employee Side Work: ¥10m Rent, 50 kW Solar From 2026

The short answer: what moved on 1 April 2026, and what did not

The operational notice under National Personnel Authority Rule 14-8 (人事院規則14―8) was amended and took effect on 1 April 2026[NPA press release]. Only the money figure and the output figure went up. The counts of houses, rooms and parking spaces are unchanged.

Source: Operation of National Personnel Authority Rule 14-8[NPA operational notice]. Last amended 19 December 2025 (Shokushin-451). Old and new compared[NPA outline]; the former standard[Q&A collection].

Letting is decided by counts, solar power by output

For property it is the number of units, not the income, that decides. The operational notice treats 5 or more detached houses, 10 or more rooms, or 10 or more land lease contracts as self-employment[NPA operational notice]. Parking is caught at 10 spaces or more, or where there is a building or machinery. A building let to a theatre or hotel is caught whatever its size.

Until March 2026, rent of ¥6,600,000 a year met the old standard and needed approval. The whole band from ¥5,000,000 to just under ¥10,000,000 has moved over to the no-approval side[NPA outline].

Selling solar power is decided by rated output, and from 1 April 2026 the line is 50 kW or more[NPA operational notice]. Household systems under 10 kW were never caught, and the band from the low teens up to 49 kW has moved to the no-approval side.

Two newly approvable businesses, and the notification of commencement of business

This is the centrepiece of the reform. "A business using your knowledge or skills" and "a business serving the public good" can now be approved[NPA outline]. The examples given are selling handmade goods, running a class, local promotion events and shopping errands.

1. It must be a business run under a notification of commencement of business (開業届). Filing the notification under Article 229 of the Income Tax Act is the first of the approval criteria[NPA operational notice].
2. You must draw up a business plan. It states the purpose, the work, the trading days and hours, and the expected annual income.
3. There must be no conflict with your duties. No special interest, or risk of one, between your post and the business.
4. It must be clear that your duties will not suffer. The model assumed is work on days off only.

Approval runs for a period of no more than two years. Letting, solar power and a family farm are in principle open-ended, which is the difference[NPA self-employment Q&A]. You may not run such a business from national public employee housing, so the premises must be elsewhere.

Your employer's approval is now tied directly to a tax office document. How to file the notification is set out in our guide to starting out as a sole proprietor[NTA No.2090].

The personnel ¥200,000 is income; the tax ¥200,000 is net profit

This is the most misunderstood part. The NPA says that where income before expenses is expected to exceed ¥200,000 a year, the scale may make it self-employment[NPA self-employment Q&A]. The ¥200,000 spoken of in tax returns is income after expenses[e-Gov, Article 121 Income Tax Act]. The same number measures two different things.

Whether a return is unnecessary also depends on your other income. Check with the tax office or a tax accountant.

The heavier the expenses, the more this mismatch bites. You are expected to report within one month of the day it becomes clear your income will exceed ¥200,000[NPA self-employment Q&A]. The tax boundaries are set out in tax returns for side work, and the business-income-or-miscellaneous-income question in how the ¥3,000,000 side-work question was settled.

What needs no approval, what does, and the limits on hours

The NPA and Cabinet Bureau of Personnel Affairs Q&A list the acts that need neither approval nor permission. Many people give up on these without knowing.

There are guides on hours too. These three apply to national and local employees alike.

Source: Q&A collection on secondary work[Q&A collection]; Secondary work by national public employees (outline)[Cabinet Bureau of Personnel Affairs].

For local public employees the line differs by local government

Under Article 38 of the Local Public Service Act, local public employees need the permission of the appointing authority and nothing else[e-Gov, Article 38 Local Public Service Act]. The reference point is guidance from the Ministry of Internal Affairs and Communications (総務省), most recently Sogyoko No.72 of 11 June 2025. That notice says working as an employee of a for-profit company can also be allowed at the appointing authority's discretion[MIC, Sogyoko No.72]. A way of working that is barred in principle at national level is open at local level.

The survey in that notice found that 64% of bodies had set permission criteria and 56% had published them, up 25 and 21 points on the previous survey. Permissions granted stood at 41,587 in fiscal 2023, flat year on year, but public-good activities rose about 17% to 13,498.

Source: Sogyoko No.72, Annex 3[MIC]; Ikoma's practice[Ikoma].

Ikoma is an unusual design that draws the line on performance rather than money. The flip side is that a third of local governments still have no criteria at all. Check your own workplace rules with the personnel section.

Going without permission costs a pay cut or a reprimand; Article 103 carries a criminal penalty

The sanctions are less extreme than people assume. The NPA guidelines set the standard for an employee who skipped the procedure at a pay cut or a reprimand[NPA guidelines on disciplinary action]. Dismissal is not the standard. It does rise where false statements and the like are added on top.

Source: NPA, Guidelines on disciplinary action[NPA]; Article 109(xiii), National Public Service Act[e-Gov].

Once there is income, a tax return is required. For resident tax, ticking "pay it myself" on the second sheet of the return gives you ordinary collection[e-Gov, Article 321-3 Local Tax Act]. The choice is only open for income other than employment income; if the second job is also employment, the amounts are combined. We explain this in special collection and ordinary collection of resident tax.

The first thing to check is whether the side work will bring in more than ¥200,000 a year. If it will, talk to your personnel section within one month and get ready to file the notification of commencement of business.

Summary

• From April 1, 2026, the threshold for rental income rose to ¥10 million or more a year, and for solar power to 50 kilowatts or more.
• The number of buildings, units, and spaces is unchanged. Approval is required for 5 or more detached houses, 10 or more rental units, or 10 or more parking spaces.
• Selling handmade goods or running classes is also possible if approval is obtained, conditional on filing a business opening notification and business plan. This isn't deregulation—the permission system remains.
• The approval threshold is based on gross income before expenses exceeding ¥200,000 a year. The ¥200,000 tax threshold, by contrast, is based on net income—they measure different things.
• You must notify your workplace within 1 month of the date it becomes apparent you will exceed the threshold. The standard penalty for failing to obtain approval is a pay cut or reprimand.

References (sources)

• Operation of National Personnel Authority Rule 14-8 — the approval criteria
• NPA, Review of the self-employment rules — the effective date
• NPA, Outline of the review — old and new compared
• NPA, Q&A on the review — the ¥200,000 guide
• NPA and Cabinet Bureau of Personnel Affairs, Q&A collection on secondary work — what needs no approval
• Cabinet Bureau of Personnel Affairs, Secondary work by national public employees (outline) — the hour limits
• NPA, Guidelines on disciplinary action — the standard sanctions
• MIC, Sogyoko No.72 — local permission criteria
• Ikoma, Operation of the restriction on engaging in for-profit enterprises — the performance rating requirement
• e-Gov, National Public Service Act — Articles 103 and 104
• e-Gov, Local Public Service Act — Article 38
• e-Gov, Local Tax Act — Article 321-3
• NTA No.2090, Notifications when you start a business — the notification of commencement

The worked examples apply our own figures to the NPA standards. Confirm whether approval is needed with your personnel section, and tax matters with the tax office or a tax accountant.