Year-End Tax Adjustment (Nenmatsu Chosei) for Foreign Workers in Japan — A Complete Guide

Every November and December, Japanese employers ask their employees to fill in nenmatsu chosei — the year-end income tax adjustment. For most foreign workers in regular employment, including SSW, engineers, and technical interns, this is how your final income tax for the year is settled. Done right, it often results in a refund in your December or January payslip, although some workers may have additional tax withheld if too little was deducted during the year.

This guide explains nenmatsu chosei in plain English: who has to do it, who can't, what each form does, which deductions apply to foreign workers (including dependents living abroad), what proof you need, what to do if you missed the deadline, and when you should file a separate kakutei shinkoku instead.

What Is Nenmatsu Chosei?

Nenmatsu chosei means "year-end adjustment". Throughout the year, your employer withholds an estimated amount of income tax from each paycheck. At year end, your final income tax is calculated based on your actual annual income and the deductions you are entitled to. If too much was withheld during the year, you get the difference back. If too little, you owe more.

For most foreign workers in regular employment at one Japanese employer, the employer handles this calculation for you — you fill in the required paper or electronic forms (typically three standardized declarations), attach the necessary documents, and HR calculates the adjustment.

Who Has to Do Nenmatsu Chosei

You should do nenmatsu chosei if:

• You worked for a Japanese employer through the end of the year and submitted the required dependents declaration to that employer.
• Your annual salary is ¥20,000,000 or less.
• You were not asked to file a separate kakutei shinkoku.

You should not do nenmatsu chosei (and instead must file kakutei shinkoku yourself) if:

• Your annual salary exceeds ¥20,000,000.
• You had multiple employers in the same calendar year with overlapping employment (you can only nenmatsu chosei at one primary employer, but secondary income above ¥200,000 triggers a kakutei shinkoku).
• You had side income (freelance, rental, capital gains, etc.) totaling more than ¥200,000 on top of salary. (Note: even when side income is ¥200,000 or less and no income tax return is required, a separate residence tax declaration to your municipality may still be necessary — check with your local ward/city office.)
• You want to claim a medical expense deduction (this isn't available through nenmatsu chosei), donation deduction beyond the easy "hometown tax" cap, casualty loss, or first-year mortgage deduction.
• You left Japan during the year and your employer did not perform a special "departure" year-end adjustment.

Nenmatsu Chosei vs Kakutei Shinkoku

You can also do both: have your employer do nenmatsu chosei, then file kakutei shinkoku in spring to claim additional deductions (medical expenses, hometown tax beyond simplified limit, etc.). That can lead to a second refund.

Deductions That Apply to You

Common deductions through nenmatsu chosei:

• Basic deduction — granted to everyone with income within the threshold; reduces taxable income. Following the 2025 tax reform (applied to salaries paid on or after December 1, 2025), the basic deduction was raised from a flat ¥480,000 to a range of ¥580,000–¥950,000 depending on total income (an enhanced amount applies temporarily for 2025 and 2026; from 2027 it becomes a flat ¥580,000). Combined with the increase in the minimum employment income deduction from ¥550,000 to ¥650,000, the income level at which income tax starts rose from the old "¥1.03 million wall" to between ¥1.23 million and a maximum of ¥1.6 million.
• Employment income deduction — an automatic deduction proportional to salary; the employer applies this for you.
• Spouse deduction / spouse special deduction — for a non-working or low-income spouse. Following the 2025 tax reform, the spouse deduction applies when the spouse's salary income is ¥1,230,000 or less (total income ¥580,000 or less). The spouse special deduction then phases out gradually; the full-amount equivalent now extends to spouse salary income of ¥1,600,000 (up from ¥1,500,000 previously). Note: the ¥1,300,000 figure often cited is the social insurance dependent threshold — a separate system, not the income tax threshold.
• Dependent deduction — for qualifying family members aged 16 or over whose salary income is ¥1,230,000 or less (total income ¥580,000 or less) following the 2025 tax reform. Deduction amounts are higher for "specified dependents" aged 19–22 and for elderly dependents aged 70+.
• Specified relative special deduction — new in the 2025 tax reform. If you support a relative aged 19–22 whose salary income is between ¥1,230,000 and ¥1,880,000 (total income ¥580,000 to ¥1,230,000), you can claim a graduated deduction that decreases as the relative's income rises. Commonly relevant for workers supporting a university-age child with part-time earnings. Claimed via the new combined declaration form at year-end adjustment.
• Disability deduction — for self or dependents with qualifying disabilities.
• Single-parent / widow deduction — for qualifying single parents (limits apply).
• Working student deduction — for qualifying students.
• Social insurance premium deduction — all the shakai hoken premiums withheld from your salary are fully deductible (your employer applies this automatically). Premiums you paid for family members (e.g., National Pension paid for a spouse or parent) are also deductible, provided you can substantiate payment.
• Small business mutual aid premium deduction — iDeCo (individual defined-contribution pension) contributions are typically claimed here.
• Life insurance deduction — for premiums paid on qualifying Japanese life and personal pension policies (with caps).
• Earthquake insurance deduction — premiums on qualifying earthquake insurance (with a cap).
• Mortgage deduction (2nd year onward) — for those who bought a home in Japan and qualified for the mortgage loan deduction.

Dependents Living Abroad — Special Rules

If you support family members who live outside Japan (e.g., parents, spouse, or children back home), you can sometimes claim them as dependents for income tax. The rules tightened in 2023 to prevent misuse, so the proof requirements are now strict.

To claim a dependent living abroad, you must show:

1. Proof of the family relationship — birth certificate, marriage certificate, family registry, or equivalent document, with Japanese translation.
2. Proof of regular remittances from you to that dependent — bank or remittance service statements showing transfers from your Japanese account to the dependent.
3. For dependents aged 30–69 (rule decided in the 2020 tax reform, applied from the 2023 income year): additional restrictions apply. Generally only the following qualify in this age range: (1) persons studying abroad who have lost their Japanese residence (a study-abroad visa document is required), (2) persons with disabilities, or (3) persons who received at least ¥380,000 from you during the year specifically for living or educational expenses (the threshold is judged per individual dependent). Otherwise, dependents in the 30–69 age range are not eligible for the dependent deduction, even if you support them.

Practical steps for foreign workers:

• Keep all your remittance receipts throughout the year, especially those clearly addressed to each named dependent.
• Prepare official Japanese translations of birth/marriage/family-registry documents.
• If you support multiple family members, send remittances separately to each dependent, not bulk to one family member who then distributes. Each dependent needs documented remittances in their own name.
• Track the cumulative amount sent to each dependent in the 30–69 age range to confirm ¥380,000+ threshold.

Forms You Fill In

Two forms (sometimes three) are standard at nenmatsu chosei:

1. 給与所得者の扶養控除等申告書 (Notification of dependents)

Lists your spouse and dependents for the coming year, with their names, addresses, dates of birth, and (where applicable) My Number. This is the form that registers your dependents abroad. You complete this for the next tax year at the same time, so during November-December you typically fill in two: a final version for the current year and a starter version for next year.

2. 給与所得者の保険料控除申告書 (Notification of insurance premium deductions)

Lists the life insurance, personal pension, earthquake insurance, and social insurance premiums you paid during the year that are deductible. Attach the annual "premium payment certificates" you received from the insurance companies in October/November.

3. 給与所得者の基礎控除申告書 兼 配偶者控除等申告書 兼 所得金額調整控除申告書

A combined form for basic deduction, spouse-related deductions, and income adjustment deduction. Required by most employees with a working spouse and by higher-income workers with dependents.

Many large employers now use cloud-based HR systems that walk you through the same fields in a friendlier online interface, often with multilingual support.

Documents to Attach

• Life insurance premium payment certificates — for any Japanese life or personal pension policies you have.
• Earthquake insurance premium certificates — same.
• National Pension / National Health Insurance payment receipts — only if you (or someone you support) paid into these on your own; not needed for premiums withheld by the employer.
• iDeCo (small business mutual aid) certificate — if you contribute to iDeCo.
• Mortgage deduction documents for year 2 or later: the tax office's certificate/application form for the mortgage deduction (issued after the first-year final tax return) and the year-end loan balance certificate from the financial institution.
• Proof of family relationship + remittances for dependents abroad (see above).
• Withholding slip from any previous employer in the same calendar year, if you changed jobs during the year — this lets your current employer combine the year's earnings correctly.

When and How You'll See the Refund

Your employer calculates the difference between the tax that was actually owed for the year and the total amount they withheld from your monthly paychecks. The difference is:

• Refund — if too much was withheld. Added to your December (or January) payslip. Look for a positive amount labeled something like “年末調整還付” or “過納額還付” in your earnings.
• Additional withholding — if too little was withheld. Deducted from your December (or January) pay, or split across a few months. Less common.

By January at the latest, your employer issues your gensen choushuuhyou — the official annual withholding slip. Keep it. You may need it for visa renewal, a future loan application, kakutei shinkoku, or your next employer.

If You Missed the Deadline

If you didn't submit your nenmatsu chosei forms in time (because you were new, or distracted, or didn't know), you can still get the refund — you just have to file a kakutei shinkoku yourself between February 16 and March 15 of the following year (technically you can file refund-only claims for up to 5 years back).

Bring or upload:

• Your gensen choushuuhyou from the employer (they must still issue it).
• Any deduction certificates you would have attached at nenmatsu chosei.
• Proof of dependents (abroad or in Japan).
• Your My Number (Card or juminhyo).
• Bank account details for the refund.

The National Tax Agency provides some English-language guidance materials for the final tax return, though the online filing tools are primarily in Japanese. During the filing season, tax offices offer free in-person consultation, often with phone interpreter support, which is the most reliable option if you are not confident in Japanese.

If You Leave Japan Mid-Year

If you leave Japan in the middle of a tax year (and lose Japan tax residency by departure), your employer should perform a "departure" year-end adjustment on your final payslip, settling your tax up to your departure date. If they don't:

• Appoint a tax representative in Japan before you leave. They can file your final kakutei shinkoku on your behalf and receive the refund.
• If you forget, you may forfeit the refund or struggle to claim it later.

A tax representative is also essential if you plan to claim the pension lump-sum withdrawal after leaving Japan: the Employees' Pension portion of the lump sum has 20.42% income tax withheld at source (the National Pension portion is not withheld), and this can be recovered only by filing an application under the "selective taxation as retirement income" procedure, which a tax representative in Japan handles on your behalf.

Common Issues and Fixes

Issue: “HR gave me forms entirely in Japanese and I don't understand them”

Fix: Ask HR for a translated guide; many large employers maintain English / Vietnamese / Chinese / Tagalog / Indonesian / Nepali versions. Otherwise, ask a coworker to help, or use a free multilingual labor hotline (e.g., Yorisoi 0120-279-338) for general orientation. For specific tax questions, your local tax office has free consultation, often with phone interpreter support during the filing season.

Issue: “I want to claim my parents back home as dependents but my remittance receipts are in my coworker's name”

Fix: The deduction belongs to the person who sent the money. Always send remittances under your own name to claim the deduction. If you're sharing costs with a coworker, agree in advance who claims which dependent and send separately.

Issue: “I joined the company in October. Do I still need nenmatsu chosei?”

Fix: Yes — your current employer handles nenmatsu chosei for the whole calendar year, including periods at previous employers. Bring your previous employer's gensen choushuuhyou so HR can combine the earnings. Without it, HR will tell you to file kakutei shinkoku yourself in spring.

Issue: “I forgot to include my insurance certificate.”

Fix: If December nenmatsu chosei is already closed, you can usually still adjust at your employer up to a "redo" deadline in late January, or claim it via kakutei shinkoku in February-March.

Issue: “My employer never gave me a gensen choushuuhyou.”

Fix: Employers are legally required to issue gensen choushuuhyou. Ask in writing. If they refuse, the tax office can compel them; contact the tax office for your residence directly.

Frequently Asked Questions

Summary

Nenmatsu chosei looks intimidating the first time because the forms are in formal Japanese and the rules around overseas dependents are detailed. Take a careful 30 minutes once a year to fill in the forms accurately, attach the right documents, and you will almost certainly get money back — sometimes a meaningful amount. Combine it with timely kakutei shinkoku when needed and you'll keep your tax situation clean, which also matters for visa renewals and long-term residence.