- November 5, 2025
- BELONGING JAPAN
For many foreign residents working in Japan, the Year-End Adjustment (年末調整 / nenmatsu chōsei) can be a confusing part of the Japanese tax system. In Japan, income tax is automatically withheld from your monthly salary, but the total tax amount you owe depends on your total annual income and applicable deductions.
As a result, the amount withheld each month may not perfectly match your actual tax liability.
This is where the Year-End Adjustment comes in.
The Year-End Adjustment is a process that reconciles the difference between the income tax you paid throughout the year and the actual tax you owe based on your total income and deductions. If you overpaid, you’ll receive a refund; if you underpaid, additional tax will be collected.
Even foreign residents are generally required to undergo this adjustment if they receive a salary in Japan.
This article, supervised by financial expert Masako Ōtake, explains the purpose, process, required documents, and available deductions involved in the Year-End Adjustment. It is written to help those unfamiliar with Japan’s tax system understand the procedure step by step.
About the Supervisor & Writer
Masako Otake
Certified Financial Planner® / 1st Grade Certified Skilled Professional of Financial Planning / Certified Inheritance Consultant
Founder of Yume Planning (est. 2015)
After gaining experience working at various financial institutions, including securities firms, banks, and insurance companies, Masako became an independent financial planner in 2015. She provides consultations, writing, and lectures based on the belief that understanding your finances is key to living a richer, more authentic life.
Table of Contents
Chapter 1: What is the Year-End Adjustment in Japan?
According to the National Tax Agency (NTA), the Year-End Adjustment is a settlement process conducted by employers who have paid salaries during the year. Employers withhold income tax each month and remit it to the tax office, but the total withheld amount often does not match the employee’s exact annual tax amount. Therefore, the employer performs a final reconciliation at the end of the year to refund overpaid tax or collect any shortfall.
How the Year-End Adjustment Works
Calculate the total salary paid between January 1 and December 31.
Determine taxable income by subtracting applicable income deductions such as dependent, spouse, and social insurance deductions.
Apply the appropriate tax rate to calculate total income tax and special reconstruction income tax for the year.
(Source: National Tax Agency)
Chapter2: Who Is Subject to the Year-End Adjustment
ou are subject to the Year-End Adjustment if any of the following apply:
1. You worked for the same company throughout the year
This includes full-time, contract, part-time, and temporary employees. The employment type does not matter as long as you receive a salary from your employer.
2. You joined a company during the year and are still employed at year-end
If you started mid-year and remain employed on December 31, your company will conduct the adjustment for that year’s salary.
3. You left your company during the year
If you left the company and your salary for the year can be finalized (for example, if you resigned in December and do not plan to take another job that year), your employer may conduct the adjustment upon your resignation.
4. You are a foreign resident in Japan
Foreign residents who have a registered address or have lived in Japan for more than one year are subject to the Year-End Adjustment.
Even non-permanent residents may be included if they receive salary income in Japan.
(Source: National Tax Agency, “Overview of the Withholding Tax System for Foreign Nationals”)
Who Is Not Subject to the Year-End Adjustment
In the following cases, you will not be eligible for the Year-End Adjustment and must instead file an income tax return (確定申告 / kakutei shinkoku) on your own:
• Your annual salary exceeds ¥20 million
High-income earners must file a tax return the following year instead of going through the Year-End Adjustment.
• You are self-employed, a freelancer, or an independent contractor
Those earning income from business or miscellaneous sources instead of a salary must complete a tax return.
• You receive salaries from multiple employers
If you have more than one source of salary income, only your main job’s salary is adjusted. Secondary income must be reported via a tax return.
• You left your job mid-year and did not start a new one before December 31
If your employer cannot complete your Year-End Adjustment, you must file your tax return to settle your taxes for that year.
What Is an Income Tax Return (確定申告)?
A tax return (確定申告 / kakutei shinkoku) is a process where you declare your total income earned from January 1 to December 31 and calculate the final amount of tax you owe or can reclaim.
People who are not eligible for the Year-End Adjustment or who have income not covered by it (such as side jobs or investment income) are required to file a tax return.
Chapter 3: The Three Essential Documents for Year-End Adjustment
During the Year-End Adjustment process in Japan, employees are typically required to submit three key forms. These documents are usually distributed by the employer (HR or accounting department) around autumn each year.
1: Declaration of Exemptions for Dependents of Employment Income Earner
Japanese:
給与所得者の扶養控除等（異動）申告書
Purpose:
This form notifies your employer about your family situation, including your spouse and dependents. It ensures that the correct amount of income tax is withheld from your monthly salary throughout the year.
When to submit:
At the beginning of the year or when joining a new company.
This form is essential because it allows the company to apply appropriate deductions based on your dependents. During the Year-End Adjustment, the previously submitted form will be reviewed to confirm whether there have been any changes in your household situation.
If there are no changes, you can submit it as is. If there are updates—such as marriage, childbirth, or dependents starting employment—you must record them.
Typical information required:
Full names, birthdates, and relationship of dependents
Marital status (spouse information)
Your My Number and address
Number of dependents eligible for tax deductions
2: Declaration for Insurance Premium Deductions and Spouse Special Deduction
Japanese:
給与所得者の保険料控除申告書 兼 配偶者特別控除申告書
Purpose:
This form is used to claim deductions for insurance premiums (such as life, medical, or earthquake insurance) and for your spouse’s income-based deduction (Spouse Special Deduction).
When to submit:
Around November to December, during the Year-End Adjustment period.
By submitting this form, you can receive tax reductions based on the premiums you paid and your spouse’s income over the year.
Typical information required:
Details of paid insurance premiums (life insurance, medical care, personal pension, earthquake insurance, etc.)
Information from the Deduction Certificate issued by your insurance company
Your spouse’s annual income and total taxable amount (if applying for the Spouse Special Deduction)
Important Note:
Insurance companies send Deduction Certificates by mail between October and November. Be sure to keep them safe, as they are required for this form.
3: Declaration for Basic Deduction, Income Adjustment Deduction, and Spouse Deduction
Japanese:
給与所得者の基礎控除申告書 兼 所得金額調整控除申告書 兼 配偶者控除申告書
Purpose:
Introduced after the 2020 tax reform (Reiwa 2), this form ensures accurate application of the Basic Deduction and other applicable deductions based on your income level and family’s income situation.
When to submit:
During the Year-End Adjustment period (November–December).
This declaration is used to report your annual income, your spouse’s income, and any special deduction eligibility, such as for disabilities or single parents.
Typical information required:
Your estimated annual income
Spouse’s income amount
Eligibility for deductions such as disability or single-parent deduction
Whether you are applying for an income adjustment deduction
Summary Table of Year-End Adjustment Forms
| Form Name | Main Purpose | Submission Timing | Notes |
|---|---|---|---|
|
Declaration of Exemptions for Dependents |
Report dependents and spouse information |
Beginning of the year or upon hiring |
If not submitted, higher tax withholding applies |
|
Declaration for Insurance Premium Deductions and Spouse Special Deduction |
Apply for insurance and spouse-related deductions |
Year-end (Nov–Dec) |
Deduction certificate from insurance company required |
|
Declaration for Basic Deduction, Income Adjustment Deduction, and Spouse Deduction |
Report your and your spouse’s income situation |
Year-end (Nov–Dec) |
New format since 2020 tax reform |
Chapter 4: The Year-End Adjustment Process
The Year-End Adjustment (Nenmatsu Chosei) is carried out through your company between November and December each year. Below is a step-by-step guide to help you understand the process and prepare all necessary documents correctly.
Step 1: Receive the Year-End Adjustment Notice (Around November)
Around November, your company’s HR or accounting department will send a notification or request for you to submit Year-End Adjustment documents.
In recent years, many companies have transitioned from paper forms to online systems such as SmartHR, freee, or Money Forward, allowing employees to fill out forms digitally.
What to prepare:
A full set of Year-End Adjustment forms (3 types distributed by your company)
Your My Number (either the notification card or My Number Card)
Step 2: Collect “Deduction Certificates” from Insurance Companies (October–November)
If you are enrolled in insurance plans such as life insurance, earthquake insurance, or medical/long-term care insurance, you will receive Deduction Certificates (控除証明書) from your insurance providers. These certificates are proof that you paid premiums and are necessary to claim tax deductions.
Main types of deduction certificates:
Life Insurance Premium Deduction Certificate
Earthquake Insurance Premium Deduction Certificate
National Pension Premium Deduction Certificate (issued by the Japan Pension Service)
Small Enterprise Mutual Aid Premium Payment Certificate (for those contributing to iDeCo, etc.)
Tip:
If a certificate doesn’t arrive, contact your insurance company to request a reissue.
Step 3: Complete the Required Forms (Late November to Early December)
Fill in all three Year-End Adjustment forms provided by your company.
| Form Name | Main Information Required |
|---|---|
|
Declaration of Exemptions for Dependents |
Family and spouse details, My Number |
|
Declaration for Insurance Premium Deductions and Spouse Special Deduction |
Insurance details, spouse’s income, deduction certificates |
|
Declaration for Basic Deduction, Income Adjustment Deduction, and Spouse Deduction |
Your income, family structure, deduction eligibility |
Tips for filling out the forms:
Use the same name and address as on your Resident Record (Juminhyo).
Enter exact insurance premium amounts as listed on the deduction certificate.
When estimating your spouse’s income, include part-time or temporary job income as well.
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Step 4: Submit All Forms to Your Company (By Mid-December)
Once you’ve completed all forms, submit them by the company’s deadline—usually to the HR, accounting, or general affairs department. Follow your company’s submission instructions carefully.
If your company uses online filing, upload your forms and certificates through the designated system.
If your insurance certificates are issued digitally, attach the data files accordingly.
Step 5: Company Performs the Year-End Adjustment (December)
Using the submitted forms, your company recalculates your total income tax for the year.
The withheld tax from your monthly salaries is compared to your actual annual tax obligation, and any difference is adjusted in your December paycheck.
If you overpaid, the excess amount is refunded in your December salary.
If you underpaid, the shortfall is deducted from your December salary.
This recalculation and settlement process is the core function of the Year-End Adjustment.
Step 6: Receive the “Withholding Tax Certificate” in January
After the Year-End Adjustment is completed, your company will issue your Withholding Tax Certificate (源泉徴収票 / Gensen Choshu-hyo) in January of the following year.
This important document summarizes your total annual income and taxes paid.
You’ll need the certificate for:
Filing income tax returns (e.g., for housing loan or medical expense deductions)
Submitting to local government offices (e.g., for child care or kindergarten applications)
Tip:
You can also view your digital Withholding Tax Certificate through the MyPortal (マイナポータル) system if linked to your account.
Step 7 (For Some Individuals): File a Final Tax Return (February 16 – March 15)
If your taxes cannot be fully settled through the Year-End Adjustment, you must file a Final Tax Return (確定申告 / Kakutei Shinkoku) in the following year.
You need to file if:
You receive income from multiple employers
You have freelance or side business income
You wish to claim medical expense deductions or first-year mortgage deductions
You left a company midyear and did not start a new job
You are paid by an overseas employer
Tax filing period:
Every year from February 16 to March 15 (exact dates may vary slightly based on National Tax Agency announcements).
Chapter 5: Frequently Asked Questions
Based on my experience as a Certified Financial Planner, here are some of the most common questions clients—both Japanese and foreign residents—often ask about the Year-End Adjustment (Nenmatsu Chosei) in Japan.
Q1. Can I receive a Year-End Adjustment if I just moved to Japan?
A. It depends on your employment and residency status.
If you are classified as a resident or non-permanent resident receiving salary income in Japan, you are generally eligible for the Year-End Adjustment.
However, if you joined a company mid-year, the adjustment will only apply to the salary you earned during that period.
If you are leaving Japan or resigning before the end of the year, your taxes may need to be settled through a Final Tax Return (Kakutei Shinkoku) instead.
Q2. Can I submit the Year-End Adjustment forms in English?
A. Forms must be submitted in Japanese.
Official Year-End Adjustment documents—such as the Declaration of Exemptions for Dependents and Insurance Premium Deduction Form—are part of Japan’s national tax system and must be completed in Japanese.
If you are unsure how to fill them out, consult your HR or general affairs department. Many companies provide input guidance or translation support for foreign employees.
Q3. Are overseas insurance or pension payments eligible for tax deductions?
A. Generally, no.
Tax deductions during the Year-End Adjustment apply only to Japanese insurance policies and public pension contributions, such as National Pension (Kokumin Nenkin) or Employees’ Pension (Kosei Nenkin).
Overseas insurance or pension payments are not eligible.
However, in rare cases, certain overseas losses may be reported under special rules (such as “casualty loss deductions”) when filing a Final Tax Return.
Consult your local tax office or a licensed tax accountant for specific guidance.
Q4. Can I claim dependents who live outside Japan?
A. Only under certain conditions.
Generally, dependents must reside in Japan or meet specific criteria as recognized relatives.
Family members living overseas are usually not eligible for the dependent deduction.
However, in limited cases, a Non-Resident Dependent Deduction may apply if proper documentation is submitted.
Always check with your company or local tax office in advance if you plan to list overseas family members as dependents.
Q5. I haven’t received my My Number card yet. Can I still complete the Year-End Adjustment?
A. Yes, but inform your company immediately.
If your My Number is not yet available, notify your HR department.
Most companies allow you to update or correct the number later once it’s issued.
Make sure to submit accurate information before the final deadline.
Q6. When will I receive my tax refund from the Year-End Adjustment?
A. Usually, refunds are included in your December salary.
Depending on your company’s payroll schedule, it may also appear in your January paycheck.
For exact payment timing or refund amounts, check directly with your HR or accounting department.
Q7. What should I do if my taxes aren’t fully settled through the Year-End Adjustment?
A. In that case, you’ll need to file a Final Tax Return (Kakutei Shinkoku).
You must file if:
You receive income from multiple employers
You earn freelance or self-employment income
You wish to claim medical expense deductions or the first-year housing loan deduction
You did not receive a Year-End Adjustment from your employer
The filing period is February 16 to March 15 each year (dates may vary slightly).
Procedures and forms are available through the National Tax Agency website or your local tax office.
Q8. Can non-permanent residents or employees working overseas receive a Year-End Adjustment?
A. Generally, no.
If you are a non-permanent resident or receive income from a foreign employer, you are not eligible for a Year-End Adjustment.
In such cases, your income must be reported and taxed through a Final Tax Return instead.
Even if your employer is based in Japan, income paid as a non-resident is not processed through Year-End Adjustment.
Q9. Should I prioritize Year-End Adjustment or Final Tax Return?
A. If your company handles your taxes through the Year-End Adjustment, that should be done first.
Afterward, you can file a Final Tax Return only for items not covered by the Year-End Adjustment—such as freelance income, medical expense deductions, or special credits.
Combining both ensures your income taxes are calculated accurately and that you don’t overpay.
Chapter 6: Summary
For foreign residents working in Japan, the Year-End Adjustment (年末調整 / nenmatsu chōsei) is a key process to make sure your income tax is settled correctly. Each year, your employer reviews your total earnings and applicable deductions, then refunds any excess tax that was withheld. This applies to full-time, part-time, and temporary employees who receive salaries from Japanese companies. However, if you’re self-employed, earn additional income outside your main job, or make over 20 million yen a year, you’ll need to file a final tax return (確定申告 / kakutei shinkoku) instead.
To complete the Year-End Adjustment, you’ll need to submit several forms, including the Declaration of Dependents, Insurance Premium Deduction Form, and Basic Deduction Declaration, along with documents such as insurance deduction certificates and your My Number (マイナンバー). Based on the information you provide, your company recalculates your annual tax and adjusts any difference in your December paycheck. Refunds are typically included with your December salary, and you can check the final results on your Withholding Slip (源泉徴収票) the following year.
Even as a foreign employee, completing your Year-End Adjustment—or filing a final tax return if needed—helps you manage your taxes properly and claim any refunds you’re entitled to. If you’re unsure about the process, consult your company’s HR department, and the local tax office, for support.
*This article is for general informational purposes only and does not constitute individual financial, tax, or legal advice.
While supervised by a Certified Financial Planner, readers should verify current information with official government sources, banks, or licensed tax professionals.
Belonging JAPAN is not affiliated with any financial institution or government agency.
Tax procedures, deadlines, and regulations are accurate as of October 2025, but may change. Please confirm the latest details before filing.
