The National Tax Agency has released a 64-page pamphlet entitled “How to Make Year-End Adjustment for 2025.” There are several changes in this year’s year-end adjustment. It is important for companies to check and prepare for the changes as early as possible. The pamphlet lists the following three points as “changes compared to last year.”
◆Revised items for year-end adjustment
1 Revision of basic deduction for income tax, etc.
(1) Revision of basic deduction: The amount of basic deduction ranges from 580,000 yen to 950,000 yen depending on total income.
(2) Revision of deduction for employment income: The minimum amount to be guaranteed is 650,000 yen.
(3) Establishment of special deduction for specified relatives: For relatives between 19 and 23 years of age who share the same livelihood with the income earner and whose total income exceeds 580,000 yen and does not exceed 1,230,000 yen (specified relatives), the deduction ranges from 30,000 yen to 630,000 yen depending on the total income amount.
(4) Revision of income requirements for dependents: Total income requirement for spouse and dependents earning the same livelihood is 580,000 yen or less.
2 Special deduction for housing loans based on the method using the year-end balance statement (statement method).
3 Key points to consider regarding payroll tax withholding procedures for salaries in Fiscal Year 2026 and beyond.
Employee understanding of the system is essential for error-free year-end adjustments. For this reason, please check the pamphlet published this time and the “Page for Understanding the Year-end Adjustment” (National Tax Agency) scheduled to be released in October, and make sure that your employees are aware of the revised points.
National Tax Agency, “How to make year-end adjustments for 2025.”
https://www.nta.go.jp/publication/pamph/gensen/nencho2025/pdf/nencho_all.pdf
