🕒 AS OF October, 2026
🔗 Guide to Year-End Tax Adjustment (年末調整)
TL;DR Link to heading
- Basic exemption increased up to ¥1,040,000: For total income of ¥4.89M or less, the basic exemption is now ¥1,040,000. The minimum employment income deduction guarantee also rises to ¥740,000.
- Dependent income threshold raised to ¥620,000: For dependents with only employment salary, they can now qualify as dependents with annual earnings up to approximately ¥1,360,000.
- Consolidated adjustment in December: The reform takes effect on December 1. Withholding tax from January to November follows the old rules, and the entire difference is reconciled during December’s year-end adjustment.
- Higher chance of tax refunds this year: Because deduction limits are expanding, many workers are more likely to receive a larger tax refund in their December paycheck.
What Changes in the 2026 (Reiwa 8) Year-End Adjustment? Link to heading
Under the 2026 tax reform, the basic exemption, employment income deduction, and dependent income thresholds have been raised. Because the effective date is December 1, 2026, payroll operations run under the old rules through November, with the new rules applied comprehensively during the December year-end adjustment (年末調整).
Key changes include:
- Basic Exemption (基礎控除): Up to ¥1,040,000 for taxpayers with total income of ¥4.89M or less (previously ranged around ¥680,000–¥950,000).
- Minimum Employment Income Deduction (給与所得控除の最低保障額): Increased from ¥650,000 to ¥740,000.
- Income Limit for Dependents / Cohabiting Spouse (扶養親族・同一生計配偶者): Increased from ¥580,000 to ¥620,000 or less (for salary-only earners, this raises the gross annual wage ceiling from ~¥1.23M to ~¥1.36M).
- Life Insurance Deduction for Dependents Under 23: General life insurance deduction cap raised from ¥40,000 to ¥60,000 (special measure).
For individuals earning only employment income, the non-taxable annual salary threshold (income tax “wall”) increases from roughly ¥1.60M to approximately ¥1.78M.
Key Documents Submitted by Employees Link to heading
⚠️ Some forms have been revised from previous years. Make sure to use the current forms provided by your company rather than reusing older templates.
- Application for Exemption for Dependents (給与所得者の扶養控除等（異動）申告書): Can use the simplified form if there are no changes from the previous year.
- Combined Declaration Form for Basic Exemption, Spouse Exemption, Specified Relative Special Exemption, and Income Amount Adjustment (基礎控除申告書 兼 配偶者控除等申告書 兼 特定親族特別控除申告書 兼 所得金額調整控除申告書)
- Declaration for Insurance Premium Deductions (保険料控除申告書): Attach original certificates of deduction (控除証明書) issued by your insurance providers.
- Declaration for Special Housing Loan Deduction (住宅借入金等特別控除申告書): For eligible homeowners from the 2nd year onward.
- Withholding Tax Slip from Previous Employer (前職の源泉徴収票): If you changed jobs during 2026.
Important Notes Link to heading
- With the higher dependent income threshold, family members working part-time earning between ¥1,230,000 and ¥1,360,000 can now be claimed as dependents.
- Eligibility is evaluated based on “net income” (所得, earnings minus the employment income deduction), not “gross revenue” (収入).
- If claiming dependents living outside Japan (overseas dependents), you must submit official family relationship documents and proof of overseas money transfers (送金関係書類).
- Individuals earning more than ¥20,000,000 in gross annual employment income are excluded from year-end adjustment and must file a final tax return (確定申告).