What is NENMATSU CHOSEI?
Nenmatsu Chosei 年末調整 ねんまつちょうせい is the income tax calculation and payment for salaried workers. Your employer calculates your income tax for the calendar year (1 Jan 2022 – 31 Dec 2022) and then usually reimburses you for any tax you have overpaid throughout the year. The reimbursement will be reflected in your final paycheck of the year.
Your Tax Payer Status: Your annual income, residency status, marital status, and number of dependents will be the main factors that affect your tax as a company employee. The form below (which you will receive from your company) asks your status as of 1 January 2023. Even if you are single and have no dependents, you are still required to fill out this form.
You may pay additional income tax in your final paycheck in some cases. For example,
You declared overseas dependents but failed to provide proof documents of remittance and family relationship.
You included your spouse as a dependent however you earned more than 11,950,000 JPY, and/or your spouse earned above the allowed threshold* therefore you are disqualified from a spouse deduction.
Your non-spouse dependent* earned above the threshold* which would allow them to be claimed as your dependent.
Please note definition of “threshold” and “dependent” is not the same for everyone. Please consult with your HR department or payroll vendor for specific numbers.
Sample Dependent Form:
Insurance Deduction:
If you do not have Japanese private insurance, you are still required to write down your full name and address. If you do not fill out, your payroll team thinks you forgot to submit. You need to let them know you have zero insurance declaration.
Employees are enrolled in the corporate health insurance (kenko hoken) and workers’ pension (kosei nenkin) system; however, if you paid national health insurance (kokumin kenko hoken) or national pension (kokumin nenkin) for yourself or your dependent, you should provide the receipt, the name of the insurance provider, the name of the insured person, relationship with the insured person and the contribution amount.
Sample Insurance Deduction Form:
Mortgage Deduction:
If you have a mortgage from a Japanese bank, you will soon receive (1) a loan balance letter from your bank and (2) a home loan tax deduction certificate from your local tax office in the mail.
Write down your full name and address and stamp with your inkan on the upper-right section of the deduction certificate. Your HR staff or payroll vendor will be able to calculate your home loan tax deduction.
Sample (1) Loan Balance Letter :
Sample (2) Mortgage Forms :
