Nenmatsu Chosei: A Plain-English Guide to Japan's Year-End Tax Adjustment (2026)

Every autumn, employees in Japan get a bundle of forms from their company, or a link to fill them in online. It is the year-end adjustment, 年末調整 (nenmatsu chosei), and it usually comes with a short deadline and no explanation in English.

It is worth doing properly. For most salaried people it replaces filing a tax return, and it is where you claim deductions for your spouse, your dependents and your insurance. Here is what it is, what the forms ask, and what is different this year.

What the year-end adjustment actually is

All year, your employer withholds income tax from each paycheck using standard tables. Those tables are an estimate. At the last payday of the year, your employer recalculates the tax you actually owe for the whole year, taking into account the deductions you have declared, and settles the difference. The National Tax Agency's English Withholding Tax Guide 2026 describes it as the process "whereby the payer of salary, etc. settles the discrepancy" between what was withheld and what is due. It adds that "for most people receiving a salary... the year-end adjustment plays an important role as a substitute for filing a final return."

The difference usually shows up in your December (or January) pay as a refund, or occasionally as extra tax. Afterwards you receive a withholding slip (源泉徴収票, gensen choshuhyo) summarizing the year.

Who it does not cover

The same NTA guide lists who is left out. The groups most relevant to foreign residents:

• Non-residents (people with neither a domicile in Japan nor a year or more of residence here).
• People who did not submit the dependents form to this employer, for example because this is your second job. Your tax is then withheld at the higher 乙 (otsu) rate.
• People paid ¥20,000,000 or more in salary during the year.
• People who left their job during the year, unless they joined another employer who does the adjustment. If you had a gap with no job at the end of the year, you may be owed a refund, and you claim it by filing a tax return.

The forms, one by one

Most employers now use online systems such as SmartHR or freee. The questions come from the same official forms, though. The NTA publishes English translations of them on its withholding tax page, which helps when you want to see what a field really means.

1. 扶養控除等（異動）申告書: Application for (Change in) Exemption for Dependents

This is the base form. You declare who you support: a spouse, children, parents and so on. At year-end you usually fill in two of them: one confirming the current year and one for next year. The NTA's 2026 English version is available. Even if you have no dependents, you submit this form so that your employer can withhold at the standard 甲 (ko) rate.

2. The combined form for basic, spouse and income adjustment deductions

Its full name is long: 基礎控除申告書 兼 配偶者控除等申告書 兼 所得金額調整控除申告書. It is one sheet with three purposes:

• Basic deduction (基礎控除): you estimate your total income for the year, which sets the size of your basic deduction.
• Spouse deduction (配偶者控除 / 配偶者特別控除): if you are married, you estimate your spouse's income for the year.
• Income amount adjustment deduction (所得金額調整控除): a small extra deduction for people earning over ¥8.5 million who have a dependent child under 23 or a household member with a disability, among other conditions.

The "income" these forms ask for is income after deductions (所得), not gross salary (収入). The form's instructions include a conversion table. For someone whose only income is salary, the NTA's charts give the gross salary equivalents.

3. 保険料控除申告書: Insurance premium deductions

This is where you claim life insurance, medical insurance, earthquake insurance and social insurance you paid yourself. That last item includes National Pension or National Health Insurance premiums you paid directly, for yourself or for family members. If you were on National Pension for part of the year, for example before this job started, the Japan Pension Service mails a deduction certificate (社会保険料（国民年金保険料）控除証明書). For 2026, JPS says paper certificates for payments made from January to September go out between late October and early November. Attach it, or the insurers' certificates, to this form.

4. 住宅借入金等特別控除申告書: Housing loan deduction

This applies only if you have a mortgage and already claimed the deduction on a tax return in the first year. After that, the tax office sends you this form and your employer handles it.

What changed for 2026

The fiscal 2026 tax reform raised several thresholds. The NTA's summary of changes for the 2026 year-end adjustment (in Japanese) says the changes take effect on December 1, 2026 and apply to all 2026 income. The main points:

• A higher basic deduction. For 2026 and 2027, the basic deduction is ¥1,040,000 if your total income is ¥4.89 million or less, then steps down as income rises (¥670,000 up to ¥6.55 million, then ¥620,000 up to ¥23.5 million). Previously the maximum was ¥950,000.
• A higher minimum employment income deduction, up from ¥650,000 to ¥740,000.
• Higher income limits for dependents. A dependent can now have up to ¥620,000 of income (up from ¥580,000), which is ¥1.36 million in salary if salary is their only income (up from ¥1.23 million).

The NTA notes that withholding through November 2026 does not change. The new amounts are applied when your employer recalculates the whole year in December, and the difference between that and the tax already withheld is settled in the adjustment. Because the dependent limits went up, a relative who did not qualify before might now. If so, they need to be listed on your dependents form.

Dependents who live outside Japan

Many foreign residents support a spouse, parents or children abroad. You can claim them, but you need paperwork. The NTA's English leaflet, For Those Applying for an Exemption for Dependents, etc. with Regard to Non-resident Relatives, sets out what to submit:

• Documents concerning relatives (親族関係書類), proving the family relationship. Examples are official documents from the relative's home country, such as birth or marriage certificates, or a Japanese family register extract plus the relative's passport copy.
• Documents concerning remittances (送金関係書類), proving you sent money during the year, such as bank transfer records.
• Japanese translations are required for all of these documents.
• For relatives aged 30 to 69, the exemption is only available if they are studying abroad, are disabled, or received more than ¥380,000 from you during the year. That last case needs a "380,000 yen remittance document."

Collect remittance records as you go rather than in December. Without the documents, the deduction cannot be applied.

Tips for filling it in

• Use your My Number, not your residence card number, where the form asks for 個人番号. Your company may have it on file already.
• Era years. Paper forms use Reiwa years: 令和8年 is 2026 and 令和9年 is 2027.
• Don't guess income figures. If your spouse's income is close to a limit, estimate carefully. An error discovered later can mean a corrected tax bill.
• Check the deadline. Employers need time to process everything before the last payday, so internal deadlines are often in November.

When you still need a tax return

The year-end adjustment only covers salary from the employer doing it. The NTA's list of wage earners who must file a final tax return (確定申告, kakutei shinkoku, due in February and March) includes anyone:

• earning more than ¥20 million from employment;
• with one employer and more than ¥200,000 of other income (after expenses), such as freelance work or rent; or
• with two or more employers, where the second salary plus other income is more than ¥200,000.

Separately, filing is how you claim deductions the adjustment does not handle, for example medical expenses, donations (including furusato nozei when you are not using the one-stop exception), or the first year of a housing loan deduction. It is also how you get a refund if you left a job partway through the year. The NTA guide lists the full set of refund cases.

Getting the forms right

Year-end adjustment forms are some of the densest paperwork an employee in Japan sees. There are long names, era dates, and tables that switch between 収入 and 所得. If you want help understanding one, Jozu can read a photo of the form or the letter that came with it, explain each section in plain English, and remind you before the deadline. Your payroll team and the NTA's official translations are the final word on how to fill it in.