Frequently Asked Questions
【Koshida Accounting Firm Column Date:】
I heard about the year-end tax adjustment in Japan. What is it like?
In Japan, employers generally withhold income tax from their employees’ monthly salaries. These monthly withholding amounts are provisional.
At the end of the year, the employer recalculates each employee’s annual income tax and settles the difference through the year-end tax adjustment (nenmatsu chosei / 年末調整).
This procedure is an important part of payroll administration in Japan. Employees whose income tax is fully settled through the year-end adjustment generally do not need to file a kakutei shinkoku (確定申告) unless they have other income or meet certain other filing requirements.
Understanding Japanese Taxes: Year-end Tax Adjustment