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GUIDE · YEAR-END TAX

Year-end tax adjustment

年末調整Nenmatsu chosei — settling the year’s tax at the last payday

Withholding each month is only an estimate. At the end of the year, the employer recalculates each employee’s actual income tax and settles the difference.

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Updated October 26, 2026 · Checked against the official site by our editors

When

Year end

Usually at the last payday

Who

Most staff

Those who submitted the dependents form

Not for

> ¥20M

Salary — they file a return

Result

Refund / pay

Settled in the final pay

How it works

  1. 01

    Collect the forms 申告書の回収

    Employees give you the dependents form at the start of the year, and in autumn forms for insurance premiums and other deductions.

  2. 02

    Recalculate the year’s tax 年税額の計算

    Total salaries and bonuses, apply deductions, and calculate the annual tax.

  3. 03

    Settle the difference 過不足の精算

    Refund overpaid tax or withhold the shortfall in the final pay.

  4. 04

    Issue withholding slips and reports 源泉徴収票など

    Give each employee a withholding slip and send the required reports to the tax office and cities early in the new year.

Who is covered

  • Employees who submitted the dependents form (扶養控除等申告書) to your company
  • Employees earning more than ¥20 million are not covered — they file their own tax return
  • Staff who leave before year-end are generally not adjusted by you, except in some cases

FAQ

What is the year-end adjustment in Japan?

The employer recalculates each employee’s income tax for the year at the last payday and refunds or collects the difference, so most employees do not need to file a tax return.

Who is not covered by the year-end adjustment?

Employees with salaries over ¥20 million, and those who did not submit the dependents form to the employer. They file their own return.

Does a company director get a year-end adjustment?

Yes, directors paid a salary by the company are covered in the same way, unless their salary is over ¥20 million.

Sources

This page is a plain-English summary, not legal advice. The official Japanese guidelines always take priority.

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