This is an English translation of our Japanese article. Rules and figures may change; the Japanese version and official sources are authoritative. For individual matters, consult a tax office or a licensed tax accountant (zeirishi).

Year-End Adjustment Guide

A complete explanation of what to submit, when, and where — plus how to fill in the declaration forms.

Dependent deduction, life insurance premium deduction, iDeCo, mortgage loan credit and more — we clearly summarize, for employees, every deduction you can claim through the year-end adjustment and how to fill in the forms.

What is the year-end adjustment?

The mechanism, why refunds happen, and why the company handles it.

Basics

Types of declaration forms

The three declaration forms and what to write on each.

Documents

Basic & spousal deductions

The basic deduction everyone gets, plus judging spouse/dependents.

Deductions

Life & earthquake insurance deductions

How to read the deduction certificate and calculate the amount.

Deductions

iDeCo & mortgage loan credit

Contribution deductions and claiming the mortgage credit from year two.

Tax saving
‍‍

Dependent & single-parent deductions

Claiming when you support children, parents, or a person with a disability.

Deductions

How to fill in the forms — step by step

When, what, and in what order to write, explained in STEPs.

Steps

Common mistakes and fixes

What to do about omissions, calculation errors, and missed submissions.

Caution

What is the year-end adjustment?

The year-end adjustment is the procedure that reconciles the withholding income tax deducted as an estimate from each month's salary over the year (January–December) against your actual annual income tax. In most cases, overpaid tax is refunded, added to your December salary.

When forms are submitted

Distributed by your company around early November to early December each year. Deadlines differ by company.

The company does the procedure

You just hand the forms to your company; the tax calculation and settlement are done by the company's staff (or a tax accountant).

Timing of settlement

Refunds or additional collections are usually made in the December salary or the January salary.

Withholding tax slip in January

Once the year-end adjustment is complete, a withholding tax slip is issued in January–February. You use it for tax returns and mortgage applications.

Why does overpayment occur?

Monthly withholding (estimate)
Salary income (annual income ÷ 12)
Estimated withholding tax
(only dependents considered; various deductions not yet counted)
Take-home pay

Settled at
year-end
After year-end adjustment (accurate calculation)
Salary income (annual total)
Accurate income tax
(life insurance, iDeCo, spouse, etc. all deducted)
Take-home pay
(the difference is refunded in December)
How the year-end adjustment is calculated
Salary income (annual)
Employment income deduction
Employment income
Total income deductions
(basic, social insurance, life insurance, etc.)
Taxable income
×
Tax rate
Tax credits
(mortgage loan, etc.)
Annual income tax

※ If the annual income tax is less than the total of your monthly withholding, you get a "refund"; if it is more, an "additional collection."

What the year-end adjustment cannot do (a tax return is needed)

The medical expense deduction, Furusato Nozei (outside the one-stop system), the first year of the mortgage loan credit, side-job income exceeding ¥200,000, and similar items cannot be handled in the year-end adjustment. These must be declared in a tax return the following February–March.

Types of declaration forms

For the year-end adjustment you submit mainly three types of declaration forms to your company. Each requires different entries, so check the ones that apply to you.

Application for (Change in) Exemption for Dependents of Employment Income Earner
Everyone submits

The basic document of the year-end adjustment. Everyone must submit it. Used to declare dependents, spouse, disability deductions, and so on.

What to enter
  • Your name, address, and My Number
  • Name and annual income of your deduction-eligible spouse
  • Name, annual income, and relationship of dependents (children, parents, etc.)
  • Whether you qualify as a person with a disability, widow(er), single parent, or working student
  • Confirmation of whether you receive salary from another company
Children under 16 are not eligible for the dependent deduction, but enter them anyway since they are used in the residence-tax exemption assessment.
Application for Insurance Premium Deduction for Employment Income Earner
Only if applicable

The form for declaring life insurance premiums, earthquake insurance premiums, iDeCo, and the like. You transcribe and calculate figures from the deduction certificates.

What to enter
  • Life insurance premium deduction (three categories: general, care/medical, and personal pension)
  • Earthquake insurance premium deduction
  • Social insurance premium deduction (if you pay National Pension or National Health Insurance yourself)
  • Deduction for small-enterprise mutual-aid contributions (iDeCo, etc.)
The life insurance premium deduction certificate is mailed by the insurer in October–November. Don't throw it away — keep it.
Application for Basic Deduction / Application for Spousal Deduction / Application for Income Amount Adjustment Deduction for Employment Income Earner
Everyone submits

Three declarations combined on one sheet. Everyone fills in the basic deduction. The spousal deduction and income amount adjustment deduction are only for those who qualify.

What to enter
  • Basic deduction application: your estimated total income (not eligible if annual income exceeds ¥25 million)
  • Spousal deduction application: your spouse's estimated annual income (not eligible if your own income exceeds ¥10 million)
  • Income amount adjustment deduction application: for those with annual income over ¥8.5 million who are raising children or have a special disability, etc.
The basic deduction is a flat ¥580,000 if income is ¥24 million or less. Check by "income," not just by annual salary.
Application for Special Credit for Housing Loans (from year two onward)
Only for those with a mortgage

From the second year of the mortgage loan credit onward, you can claim it in the year-end adjustment using the certificate sent by the tax office. A tax return is needed only in the first year.

What you need
  • The "Certificate for Special Credit for Housing Loans" sent by the tax office (delivered all at once for up to 10 years the first time)
  • The "Certificate of Year-End Balance of Housing Loan, etc." sent by your financial institution
The balance certificate is mailed by your financial institution around November. If you lose it, you can ask the institution to reissue it.

Basic & spousal deductions

This is what you enter on "③ Application for Basic Deduction / Spousal Deduction." The basic deduction applies to everyone; the spousal deduction is judged by your spouse's income.

Basic deduction (everyone qualifies)

Your estimated total incomeBasic deductionApprox. salary equivalent
¥24 million or less¥580,000Annual salary approx. ¥25.95 million or less
Over ¥24 million – ¥24.5 million or less¥320,000
Over ¥24.5 million – ¥25 million or less¥160,000
Over ¥25 million¥0 (not applicable)Annual salary over approx. ¥26.95 million

※ Almost all employees receive the ¥580,000 basic deduction. Just write your estimated total income in "field A" of the form and note the category.

Judging the spousal deduction and special spousal deduction

Is your total income
¥10 million or less?
Yes
Check your spouse's income
No (over ¥10 million)
No spousal deduction or
special spousal deduction
↓ (if your income is ¥10 million or less)
Spouse's total income (salary equivalent)Type of deductionAmount (if your income is ¥9 million or less)
¥580,000 or less (annual salary approx. ¥1.23 million or less)Spousal deduction¥380,000 (¥480,000 if 70 or older)
Over ¥580,000 – ¥1.05 million or less (–approx. ¥1.70 million)Special spousal deduction¥380,000
Over ¥1.05 million – ¥1.10 million or less (–approx. ¥1.75 million)Special spousal deduction¥360,000
Over ¥1.10 million – ¥1.15 million or less (–approx. ¥1.80 million)Special spousal deduction¥310,000
Over ¥1.15 million – ¥1.20 million or less (–approx. ¥1.85 million)Special spousal deduction¥260,000
Over ¥1.20 million – ¥1.25 million or less (–approx. ¥1.90 million)Special spousal deduction¥210,000
Over ¥1.25 million – ¥1.30 million or less (–approx. ¥1.95 million)Special spousal deduction¥160,000
Over ¥1.30 million – ¥1.35 million or less (–approx. ¥2.00 million)Special spousal deduction¥110,000
Over ¥1.35 million – ¥1.40 million or less (–approx. ¥2.05 million)Special spousal deduction¥60,000
Over ¥1.40 million – ¥1.43 million or less (–approx. ¥2.08 million)Special spousal deduction¥30,000
Over ¥1.43 million (over approx. ¥2.08 million)Not eligible¥0

※ If your total income is over ¥9 million and ¥10 million or less, the deduction is smaller than shown above.

Example: annual salary ¥6 million, spouse with part-time salary of ¥1 million
Your total income (for ¥6 million salary)Approx. ¥4.36 million (after ¥1.64 million employment income deduction)
Spouse's total income (¥1 million salary)¥350,000 (after ¥650,000 employment income deduction)
Is the spouse's income (¥350,000) ¥580,000 or less?→ Yes → the spousal deduction applies
Spousal deduction¥380,000
Tax-saving effect (income tax rate 20% + residence tax 10%)Approx. ¥114,000
The "¥1.23 million wall" is the line where a spouse's salary income above ¥1.23 million ends eligibility for the spousal deduction (¥380,000). However, the "special spousal deduction" applies in stages up to about ¥2.08 million.

Life & earthquake insurance deductions

You enter these on "② Insurance Premium Deduction Application." Simply transcribe the figures from the deduction certificate that your insurer sends around October–November.

The three categories and limits of the life insurance premium deduction

General life insurance premium deduction

Death insurance, endowment insurance, whole-life insurance, education endowment insurance, etc.

Deduction limit
¥40,000
Care/medical insurance premium deduction

Medical insurance, cancer insurance, nursing-care insurance, disability income insurance, etc.

Deduction limit
¥40,000
Personal pension insurance premium deduction

Personal pension insurance with a "personal pension premium tax-qualified rider."

Deduction limit
¥40,000
Combined deduction cap for the three categories: ¥120,000

How to calculate the deduction (new contracts from 2012 onward)

Annual premiums paidDeduction formula
¥20,000 or lessFull amount of premiums paid
Over ¥20,000 – ¥40,000 or lessPremiums paid × 1/2 + ¥10,000
Over ¥40,000 – ¥80,000 or lessPremiums paid × 1/4 + ¥20,000
Over ¥80,000Flat ¥40,000 (limit)
Example: paying ¥5,000/month life (death) insurance + ¥3,000/month medical insurance
General life insurance premiums (¥5,000/mo × 12)¥60,000
General life insurance deduction (60,000 × 1/4 + 20,000)¥35,000
Care/medical insurance premiums (¥3,000/mo × 12)¥36,000
Care/medical insurance deduction (36,000 × 1/4 + 20,000)¥29,000
Total deduction¥64,000
Tax-saving effect (rate 20% + residence tax 10%)Approx. ¥19,200
On the form, just transcribe the "declared amount" field from the "deduction certificate" your insurer sends. You almost never need to calculate it yourself.

Earthquake insurance premium deduction

Earthquake insurance premium deduction
Premiums for earthquake insurance and the earthquake rider on fire insurance qualify. Even renters can claim it if their household-goods insurance has an earthquake rider.
Deduction limit
¥50,000
(the full premium paid; cap of ¥50,000)

※ Old long-term casualty insurance premiums (contracts on or before December 31, 2006) have a separate deduction of up to ¥15,000. Check the category on the certificate.

iDeCo & mortgage loan credit

iDeCo (deduction for small-enterprise mutual-aid contributions)

Contributions to iDeCo (individual-type defined contribution pension) are fully deductible from income. Enter them in the "deduction for small-enterprise mutual-aid contributions" field of "② Insurance Premium Deduction Application."

How to obtain the certificate

The financial institution operating your iDeCo mails a "Certificate of Payment of Small-Enterprise Mutual-Aid Contributions" around October–November. If you lose it, ask the institution to reissue it.

Where to enter it

In the "deduction for small-enterprise mutual-aid contributions" field at the very bottom of "② Insurance Premium Deduction Application," just enter the "total contributions for the year" shown on the certificate.

Ceiling for employees

¥23,000/month (¥276,000/year) if you are not enrolled in a corporate-type DC. Corporate-type DC members: ¥20,000/month (¥240,000/year).

Example: annual salary ¥5 million, contributing ¥12,000/month to iDeCo (¥144,000/year)
Annual iDeCo contributions¥144,000 (¥12,000/mo × 12)
Reduction in taxable income−¥144,000
Income tax saving (rate 20%)¥28,800
Residence tax saving (10%)¥14,400
Annual tax saving (30% of contributions saved in effect)¥43,200
Because about 30% of your contributions come back as tax savings, ¥12,000/month of investing effectively costs the equivalent of about ¥8,400/month.

Mortgage loan credit (year-end adjustment from year two)

The mortgage loan credit requires a tax return only in the first year; from the second year onward you can claim it in the year-end adjustment. Enter it on "④ Application for Special Credit for Housing Loans."

1
Check the deduction certificate from the tax office

After your first-year tax return, the tax office sends up to 13 years' worth of "Certificate for Special Credit for Housing Loans" all at once. Use one each year.

2
Receive the year-end balance certificate from your financial institution

Each year around October–November, the financial institution that made your loan sends a "Certificate of Year-End Balance of Housing Loan, etc." If it is issued electronically, you'll need to download it.

3
Enter the year-end balance and deduction amount on the form

Enter the amount from the balance certificate on the "Application for Special Credit for Housing Loans." Fill in the field where the deduction (balance × 0.7%) is auto-calculated, and submit it to your company.

Type of housingLoan capCredit rateMax annual creditCredit period
Certified long-term quality / low-carbon housing¥50 million0.7%¥350,00013 years
ZEH-level energy-efficient housing¥45 million0.7%¥315,00013 years
Energy-efficiency-standard-compliant housing¥40 million0.7%¥280,00013 years
Other housing¥30 million0.7%¥210,00010 years
Pre-owned housing (general)¥20 million0.7%¥140,00010 years

※ For move-in from 2024 onward. Households raising children or young married couples may have their loan cap raised.

If it can't all be credited, the remainder is deducted from residence tax

If the annual credit exceeds your income tax, the difference is also deducted from the following year's residence tax (up to ¥97,500/year). Even people with little tax can enjoy the benefit of the credit.

‍‍Dependent & single-parent deductions

You enter these on "① Dependent Deduction Application." If you support children, parents, grandparents, or others, or if you qualify as a person with a disability or a single parent, you can receive deductions.

Amount of the dependent deduction

Category of dependentConditionDeduction
General dependent16 or older, annual income ¥580,000 or less¥380,000
Specified dependent19 to under 23 (university students, etc.)¥630,000
Elderly dependent (not living together)Relative aged 70 or older¥480,000
Elderly dependent (living together)Parent aged 70 or older living with you¥580,000
Child under 16Annual income ¥580,000 or less (not eligible for the dependent deduction)¥0 (affects the residence-tax calculation)

Single-parent deduction & widow(er) deduction

‍Single-parent deduction
Deduction: ¥350,000

Regardless of marital history, an unmarried, divorced, or bereaved parent with a child (annual income ¥580,000 or less) in the same household. Requires your own annual income to be ¥5 million or less.

Widow deduction
Deduction: ¥270,000

A woman who has not remarried after divorce or bereavement and either has a dependent other than a child or was the wife of a deceased husband. Your own annual income must be ¥5 million or less.

Disability deduction
Deduction: ¥270,000–750,000

When you or a dependent is a person with a disability. General disability ¥270,000, special disability ¥400,000, and a special-disability dependent living with you ¥750,000.

Working-student deduction
Deduction: ¥270,000

For those enrolled at a university, vocational school, etc., with total annual income of ¥750,000 or less (of which non-employment income is ¥100,000 or less).

Example: annual salary ¥6 million with a university-student (age 20) child — specified dependent deduction
Specified dependent deduction (ages 19–22)¥630,000
Income tax saving (rate 20%)¥126,000
Residence tax saving (¥450,000 deduction × 10%)¥45,000
Total annual tax saving¥171,000‍‍
If a university-student child's part-time salary exceeds ¥1.23 million (income ¥580,000), they leave your dependents. Managing the child's income is key to tax saving.
Watch the "¥1.23 million wall" for dependents

If a family member you claim as a dependent — spouse, child, parent, etc. — has salary income exceeding ¥1.23 million a year, they become ineligible for the dependent deduction (or spousal deduction). In particular, get into the habit of checking students' part-time earnings each season. Losing a dependent increases your own tax.

How to fill in the forms — step by step

The year-end adjustment forms are distributed by your company in November–December. Fill them in the order below and submit them to your company by the deadline.

Oct–Nov
STEP 1 | Collect deduction certificates and documents

As soon as each deduction certificate arrives, keep them together in one place. You'll submit them to your company along with the year-end adjustment forms.

Life insurance premium deduction certificate: mailed by the insurer in October–November (electronic issuance also available)
Earthquake insurance premium deduction certificate: mailed by the casualty insurer around autumn
iDeCo contribution payment certificate: mailed by the financial institution in October–November
Mortgage year-end balance certificate: mailed by the financial institution in October–November
National Pension / National Health Insurance payment certificates: only if you pay them yourself
Nov–Dec
STEP 2 | Fill in ① Dependent Deduction Application

The first form to fill in is the dependent deduction application. In many cases the content barely changes year to year, but update it if your family situation has changed.

Your information

Enter your name, address, and My Number. No seal is required (the company manages the My Number verification documents).

Deduction-eligible spouse

Enter the spouse's name, date of birth, My Number, and estimated income for the year. If income is ¥580,000 or less (part-time salary ¥1.23 million or less), enter them as a "deduction-eligible spouse."

Dependents

Enter the name, relationship, date of birth, and estimated income of dependents aged 16 or older (children, parents, etc.). Entering a child aged 19–22 in the "specified dependent" field gives a ¥630,000 deduction.

Person with a disability, single parent, etc.

Check the applicable category. Confirm the disability certificate grade or the single-parent conditions before entering.

Nov–Dec
STEP 3 | Fill in ② Insurance Premium Deduction Application

Fill this in while looking at your life insurance, earthquake insurance, and iDeCo deduction certificates. Because the certificates state a "declared amount," you basically just transcribe those figures.

Life insurance premium deduction

For each of the three categories — general, care/medical, personal pension — enter the insurer's name, type of insurance, and declared amount. If unsure of the category, check the "deduction category" on the certificate.

Earthquake insurance premium deduction

Enter the annual premium for earthquake insurance (separated by category from old long-term casualty insurance). Transcribe the "amount of eligible premiums" from the certificate.

iDeCo (deduction for small-enterprise mutual-aid contributions)

Enter the "cumulative contributions for the year" stated on the payment certificate. Since it's fully deductible, no calculation is needed.

Nov–Dec
STEP 4 | Fill in ③ Application for Basic Deduction / Spousal Deduction

This form is submitted by everyone. The main task is calculating and entering your "estimated total income for this year."

Estimated total income (basic deduction application)

If you have only salary income, check the "employment income calculation table." At ¥5 million salary, income is about ¥3.56 million. Enter your total income in "field A" and choose the category (イ–ニ).

Spouse's estimated income (spousal deduction application)

If you have a spouse, enter their estimated total income for this year. For part-time earnings only, "annual salary − ¥650,000 (employment income deduction)" is a rough guide to the income.

Nov–Dec
STEP 5 | Fill in ④ Mortgage Loan Credit Application (only if applicable)

If you have a mortgage (year two onward), submit the "Application for Special Credit for Housing Loans" together with the "year-end balance certificate."

Enter the form's "move-in date," "loan balance," and "creditable amount" while looking at the year-end balance certificate
If you have multiple loans (a second property, renovations, etc.), consult your company's staff
If you lose the deduction certificate, you can apply for reissuance via the National Tax Agency's "Tax Return Preparation Corner"
By the deadline
STEP 6 | Submit to your company

Submit the completed forms and deduction certificates together to your company's staff. At companies that support electronic filing, submission may be via PDF or an in-house system.

The company keeps the original deduction certificates, so they won't stay with you (keeping a copy is reassuring)
If any content changes after the deadline, consult your staff right away
Once the year-end adjustment is done, a withholding tax slip is issued (around January–February)

Common mistakes and fixes

Here are the failure patterns in the year-end adjustment and how to handle them. In most cases you can still fix things after the deadline.

01
Forgot to submit an insurance deduction certificate (or threw it away)
Problem

If you forget to submit a deduction certificate, the life insurance premium deduction, iDeCo, etc. won't apply and you'll pay extra tax.

Fix

If you're still within your company's submission deadline, tell the staff and submit it additionally. After the year-end adjustment is over, you can file a tax return in February–March the following year to claim the deduction and get a refund (within 5 years). If you lost the certificate, ask the insurer or financial institution to reissue it.

02
Didn't check the income of your spouse or children
Problem

If your spouse or a part-time-working child had exceeded the dependent income line but you still listed them on the form, the deduction won't actually apply and you may face additional collection later.

Fix

Before filling in the form, check the expected annual income of your spouse and dependents. If part-time earnings in October–December are large, watch whether the year's total exceeds ¥1.23 million. If it looks likely, consult your company's staff and revise the form.

03
Used the wrong year's mortgage credit certificate
Problem

If you mistakenly use, or lose, the deduction certificates issued all at once for 10 years (or 13 years) by the tax office, the procedure gets complicated.

Fix

Take out only the sheet you use each year and store the rest carefully. If you lose one, you can have it reissued by submitting an "application for issuance of a Certificate for Special Credit for Housing Loans" at your nearest tax office.

04
Forgot to submit the year-end adjustment forms (missed the deadline)
Problem

If you miss your company's submission deadline, you won't make the year-end adjustment in time, and the withholding tax slip is issued without your deductions reflected.

Fix

If it's before the company finishes the year-end adjustment calculation (usually by mid-December), a late submission may still be accepted. If you don't make it, you can claim the deduction and get a refund by filing a tax return the following year (within 5 years).

05
Your side job became known to your company
Problem

You can't declare a side job in the year-end adjustment. If you mishandle the residence-tax handling when filing a tax return for side-job income, your company may find out about the side job.

Fix

In the residence-tax section of the tax return, choose "pay it yourself (ordinary collection)." Because declarations about side-job income are made in a tax return, not the year-end adjustment, you don't need to write anything about the side job on the year-end adjustment forms.

06
Entered the wrong life insurance "category"
Problem

If you mix up the three life insurance categories (general, care/medical, personal pension), the deduction won't be calculated correctly and you may lose out.

Fix

Check the "type of insurance" or "deduction category" field on the certificate. If it says "medical/care," it's the "care/medical" category; if it says "pension," it's the "personal pension" category. If unsure, checking with the insurer's call center is the surest way.

Annual schedule of the year-end adjustment
Sep–Oct

• Check dependents' expected annual income

• Check that the spouse's part-time earnings won't exceed ¥1.23 million

Oct–Nov

• Life insurance premium deduction certificate arrives

• iDeCo contribution payment certificate arrives

• Mortgage balance certificate arrives

Nov–early Dec

• The company distributes the year-end adjustment forms

Fill in the forms and submit them to the company

• Submit the deduction certificates together

December

• The company performs the year-end adjustment calculation

Refund or additional collection in the December salary

• Some companies refund in the January salary

Jan–Feb next year

• The company issues the withholding tax slip

• Check the content (especially deduction amounts and tax)

• Those who need to file a tax return start preparing

Feb–Mar next year

• The medical expense deduction, etc. is claimed in a tax return

• Deductions you forgot in the year-end adjustment can also be handled in the tax return

Learn more in related columns and pages

FAQ

Which deductions can't be claimed in the year-end adjustment?

The medical expense deduction, the donation deduction (Furusato Nozei portion not using the one-stop system), the first year of the mortgage loan credit, the casualty loss deduction, and others cannot be received in the year-end adjustment; you file a tax return yourself.

What if I forgot to submit a deduction certificate?

Even if you miss your employer's year-end adjustment, you can receive the deduction by filing a tax return (refund claim) yourself the following year. A refund claim is possible for up to 5 years.

Can the mortgage loan credit be done in the year-end adjustment?

A tax return is needed in the first year, but from the second year onward you can receive it in the year-end adjustment by submitting to your company the "Certificate for Special Credit for Housing Loans for Year-End Adjustment" and the "year-end balance certificate."

Sources / official information

This article is based on the official information below. Rules may be revised; please check each official site for the latest details.

※ This article is for general information only and is not tax or legal advice. For individual tax matters, consult your local tax office or a licensed tax accountant (zeirishi).