Nenmatsu Chosei 2026: Japan’s Year-End Tax Adjustment Explained for Foreigners (New Rules, Forms, Overseas Dependents)

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Every autumn, employees in Japan get a small stack of forms from HR with names like 基礎控除申告書 兼 配偶者控除等申告書 and a deadline a few weeks away. This is nenmatsu chosei (年末調整), the year-end tax adjustment. Fill the forms in correctly and your employer settles your income tax for the year, usually paying back any overpayment in your December salary. Skip them, or fill them in wrong, and you either lose money or end up filing a tax return in March.

2026 is not a normal year. A tax reform that takes effect on December 1, 2026 raises the basic deduction and the minimum employment income deduction for all of 2026 income, and changes the income limits for dependents. Because monthly withholding up to November still uses the old tables, the December adjustment is where the difference shows up. This guide explains, using the National Tax Agency’s (NTA) 2026 materials, what the adjustment is, what changed, which forms you will see, the rules for dependents living outside Japan, and when you need to file a return instead.

What nenmatsu chosei is, and who gets it

Japanese employers withhold income tax from every paycheck using standard tables. Those tables cannot know about your life insurance, your iDeCo contributions, or the relative you support, so the amount withheld during the year is almost never exactly right. At the last salary payment of the year, your employer recalculates your actual tax for the whole year and settles the difference: an overpayment is refunded to you, a shortfall is collected. That settlement is the year-end adjustment.

Who is covered

According to the NTA, the adjustment covers, in principle, everyone who submitted the 扶養控除等（異動）申告書 (the dependents declaration) to that employer. That includes people who worked there all year and people who joined mid-year. The NTA states explicitly that foreign employees who are residents of Japan are judged by the same rules as Japanese employees. It also covers some people who leave mid-year: those who become non-resident, those who leave after receiving their December pay, and part-timers paid 1.36 million yen or less in the year who are not expected to work elsewhere.

Who is not covered

• People whose main salary for the year is over 20 million yen
• People with two or more employers who gave the dependents form to a different employer, or never submitted it (taxed under the 乙欄 column)
• Most people who left a job mid-year and were not re-employed
• Non-residents, who pay a flat 20.42% on Japanese salary and get no adjustment
• Daily workers taxed under the 丙欄 column

If you are in one of these groups, you settle your tax by filing a return (確定申告) instead.

When it happens

The adjustment is normally done with the last salary payment of the year, which for most people is December. Employers hand out the deduction forms in advance and collect them before they run the adjustment. Many companies collect them in October or November, but the exact deadline is your employer’s, so check the HR email rather than assuming. If the refund is larger than the tax your employer withholds that month, it is paid over the following months.

Resident or non-resident?

For tax purposes you are a resident (居住者) if you have your address (the centre of your life) in Japan, or have had a place of residence in Japan continuously for one year or more. Everyone else is a non-resident (非居住者). Most foreigners working in Japan on a work visa with a Japanese employment contract are residents. If you are transferred abroad for a year or more, you generally become a non-resident from the day you leave, and your employer should do your year-end adjustment by your departure date.

What changed for 2026: the December 1 reform

The fiscal 2026 tax reform (令和8年度税制改正), outlined by the cabinet on December 26, 2025, takes effect on December 1, 2026 and applies to all income earned in 2026. Monthly withholding through November 2026 does not change. Instead, the December adjustment calculates your annual tax with the new amounts and settles it against tax withheld under the old tables. New withholding tables start on January 1, 2027.

1. The basic deduction goes up

Everyone gets a basic deduction (基礎控除) that depends on total income. For 2026 and 2027 it is:

The new amount is built from a statutory 620,000 yen (up from 580,000) plus a special addition of 420,000 yen for income up to 4.89 million, or 50,000 yen for 4.89–6.55 million. The NTA notes that the special addition applies to residents only. A person who is a non-resident for all of 2026 gets at most 620,000 yen. From 2028 the amounts change again (990,000 yen for income up to 1.32 million, 620,000 yen for 1.32–23.5 million).

2. The minimum employment income deduction rises to 740,000 yen

Salary is not taxed in full: you first subtract the employment income deduction (給与所得控除). Its minimum rises from 650,000 yen to 740,000 yen for 2026 and 2027 (and becomes 690,000 yen from 2028). For salaries up to 1.9 million yen the deduction is 740,000 yen; between 1.9 and 2.2 million it is salary × 30% + 80,000 yen. Combined with the 1.04 million yen basic deduction, this is why the finance ministry describes the reform as raising the minimum taxable level of income tax to 1.78 million yen as a special measure.

3. Income limits for dependents and spouses change

Because the numbers above changed, so did the income limits that decide whether a family member counts for your deductions. For 2026:

If a spouse or relative who did not qualify under the old limit now qualifies, the NTA asks you to update your 2026 dependents form and write 「令和８年12月１日 改正」 in the column for the date and reason of change.

4. Children aged 19–22 who work part-time

The special relative deduction (特定親族特別控除), which has existed since 2025 income, covers a relative aged 19–22 (for 2026: born between January 2, 2004 and January 1, 2008) who is not your spouse. It is 630,000 yen if their income is 850,000 yen or less and tapers down to 30,000 yen at 1.20–1.23 million yen. This matters if your university-age child works a part-time job.

5. Bigger life insurance deduction if you have a child under 23

For 2026 and 2027, if you have a dependent under 23 (born on or after January 2, 2004, income 620,000 yen or less), the cap on the new-type life insurance deduction rises from 40,000 yen to 60,000 yen. The overall cap for life insurance deductions stays at 120,000 yen.

The catch for people leaving their job in 2026

If your last salary as a resident is paid on or before November 30, 2026, your year-end adjustment uses the old, pre-reform amounts. To get the new amounts you need to file a return on or after December 1, 2026. If you already filed before December 1, you can request a correction (更正の請求) between December 1, 2026 and December 1, 2031. If you file from abroad, you need a tax agent in Japan (納税管理人).

The forms, one by one

These are the forms you will typically see in autumn 2026. Your employer may use a paper version, a PDF, or a payroll system that imports data from the NTA’s free software.

1. 2026 dependents declaration (令和8年分 給与所得者の扶養控除等（異動）申告書)

You submitted this at the start of 2026 (or when you joined). You only need to update it if something changed during the year, such as a new dependent, or a relative who now qualifies under the higher December 1 income limits.

2. 2027 dependents declaration (令和9年分 扶養控除等（異動）申告書)

Due by the day before your first salary payment of 2027, but employers usually collect it together with the year-end forms. Under the 2027 definitions, a spouse counts for withholding if their income is 950,000 yen or less (with your income at 9 million yen or less). A simplified “no change from last year” version exists.

3. The combined basic deduction form (令和8年分 給与所得者の基礎控除申告書 兼 給与所得者の配偶者控除等申告書 兼 給与所得者の特定親族特別控除申告書 兼 所得金額調整控除申告書)

One sheet, four purposes. You estimate your own total income for the year (to decide your basic deduction), and if relevant claim the spouse deduction, the special relative deduction for a 19–22-year-old, and an income adjustment deduction. The special relative deduction section is merged into this form, and the NTA changed the layout from last year to reflect the reform, so do not copy last year’s form by habit.

4. Insurance premium deduction form (令和8年分 給与所得者の保険料控除申告書)

Here you claim life insurance (up to 120,000 yen), earthquake insurance (up to 50,000 yen), social insurance premiums you paid yourself (for example National Pension or National Health Insurance paid before you joined the company, but not premiums already deducted from your salary), and small-business mutual aid contributions including iDeCo (full amount). Attach the certificates (控除証明書) your insurer or pension provider mails you in October and November.

5. Housing loan deduction form (住宅借入金等特別控除申告書)

Only for people in year two or later of the mortgage deduction. It is not a download: the tax office sends it (by post in late November of the second year of residence, or to your e-Tax message box around mid-November). Year one of the housing loan deduction always requires a tax return.

Are there English versions?

The NTA has posted the 2026 dependents declaration in English, Chinese, Portuguese, Spanish, Vietnamese and Filipino. For the combined basic deduction form and the insurance form, only the 2025 English versions were posted as of September 2026, and the foreign-language section was marked as in preparation. The NTA calls these translations provisional, so use them to understand the fields and submit the Japanese form your employer gives you.

Doing it digitally

The NTA’s free year-end adjustment software (年調ソフト) lets you import digital deduction certificates, build the form data and hand it to your employer (not to the tax office). A 2026 prototype was posted in August, with the official version planned for October 2026. If your employer’s payroll system supports it, and your insurer issues digital certificates, linking Mynaportal can download your certificates in one go and fill in the numbers automatically.

Dependents living outside Japan

Many foreign residents support parents, a spouse or children back home. Since 2023, the rules for claiming these non-resident relatives (国外居住親族) are strict, and the year-end adjustment is where they are checked.

Who can still count as a dependent

Documents you need

• Relationship documents (親族関係書類): either Japanese government documents plus a copy of the relative’s passport, or a document issued by a foreign government showing the relative’s name, date of birth and address (for example a family register, birth certificate or marriage certificate). Originals are required, except the passport copy. Anything in a foreign language needs a Japanese translation. These go with the dependents declaration (with student-visa documents in case a).
• Remittance documents (送金関係書類): bank transfer records, statements for a “family card” credit card used by the relative, and, from the 2024 tax year, records of transfers by electronic payment instruments. Cash handed over by a friend travelling home does not count. Money must be sent to each relative separately. In case (c), the proof must add up to at least 380,000 yen for that relative. These are submitted at the year-end adjustment.

If you sent money more than three times in the year, you can submit a statement listing the transfers plus the first and last documents, and keep the rest. At year-end you also write the year’s remittance totals in the dependents form. If you miss the year-end deadline, you can still claim the deduction by filing a tax return.

A practical tip

Start collecting documents now. Ordering an official family register from abroad and getting it translated can take weeks, and HR departments often have a hard deadline in November. Keep every remittance receipt from your bank or remittance app in one folder through the year.

What the year-end adjustment cannot do: when you still need a tax return

Some deductions and situations can only be handled by filing a return (確定申告). For 2026 income, the filing period is Tuesday, February 16 to Monday, March 15, 2027; returns that only claim a refund can also be filed earlier.

• Medical expense deduction: only by return. It covers medical costs above 100,000 yen (or 5% of income if your income is under 2 million yen), up to 2 million yen.
• Furusato nozei: the one-stop exception works only if you donate to five or fewer municipalities and do not file a return. If you file a return for any reason, the one-stop application becomes void, so include all donations in the return.
• First year of the housing loan deduction
• Salary over 20 million yen, or other income (side jobs, freelance work) over 200,000 yen
• Two or more employers where salary from the employer not doing the adjustment plus other income exceeds 200,000 yen
• You quit mid-year and were not re-employed: you can file a refund return, which is possible within five years
• You are leaving Japan: either appoint a tax agent and file by the normal deadline, or file before you leave
• Overseas dependents you did not claim at year-end

Our full walkthrough of filing a return is in our kakutei shinkoku guide. Note also that from 2027 income, a special defence income tax (防衛特別所得税) is added; it does not affect 2026.

Your 2026 year-end adjustment timeline

Your 源泉徴収票 (withholding slip) is the one document to keep safe: you need it for a tax return, for visa renewals, and often when applying for loans or apartments. Employers must issue it to every employee, including foreign residents, by January 31, or within one month if you leave mid-year.

Frequently asked questions

What is nenmatsu chosei?

Nenmatsu chosei (年末調整) is the year-end tax adjustment done by your employer. At the last salary payment of the year, usually in December, your employer recalculates your actual income tax for the year using the deduction forms you submitted, then refunds any overpayment or collects any shortfall.

Do foreigners have to do the year-end adjustment?

Foreign employees who are residents of Japan are covered by the same rules as Japanese employees. If you submitted the dependents declaration to your employer and your salary is 20 million yen or less, your employer does the adjustment. Non-residents are not covered and pay a flat 20.42% on salary.

What changed in the 2026 year-end adjustment?

A reform taking effect on December 1, 2026 applies to all 2026 income. The basic deduction rises to 1.04 million yen for total income up to 4.89 million yen, the minimum employment income deduction rises to 740,000 yen, and the income limit for dependents rises to 620,000 yen (salary 1.36 million yen). Monthly withholding through November is unchanged, so the difference is settled in the December adjustment.

Can I claim my parents in my home country as dependents?

It depends on their age. Relatives aged 16 to 29 or 70 and over can be claimed with relationship and remittance documents. Relatives aged 30 to 69 can only be claimed if they are studying abroad, are disabled, or received at least 380,000 yen from you during the year. Foreign-language documents need a Japanese translation.

When will I get my year-end adjustment refund?

Usually with your December salary. The refund is paid out of the tax your employer withholds in the adjustment month; if that is not enough, it is paid over the following months, and if it still cannot be refunded within two months it goes through the tax office.

Do I still need to file a tax return after the year-end adjustment?

Only in some cases: for example, to claim the medical expense deduction, the first year of the housing loan deduction, or furusato nozei donations to more than five municipalities, or if you have side income over 200,000 yen, salary over 20 million yen, or you are leaving Japan. The filing period for 2026 income is February 16 to March 15, 2027.

The short version

Nenmatsu chosei is your employer settling your income tax for the year, and for residents of Japan it works the same way whether you are Japanese or not. In 2026, a reform taking effect on December 1 raises the basic deduction to up to 1.04 million yen and the minimum employment income deduction to 740,000 yen for all of 2026 income, and raises the income limit for dependents to 620,000 yen. Because withholding through November does not change, many people will see the effect in their December payslip.

What you need to do: submit the combined basic deduction form (it has a new layout this year), the insurance form with your certificates, and the 2027 dependents declaration by your employer’s deadline. If you support relatives outside Japan, check the age rules and gather translated relationship documents and remittance records now. And if you have medical expenses, a new mortgage, side income, or you are leaving Japan, plan to file a return between February 16 and March 15, 2027.