Year-End Adjustment 2025 (No.2)

Impact: What Employers Should Prepare For

This change may seem small, but it affects how companies handle payroll and year-end adjustments in December.

Some employees who were previously ineligible may now qualify for the Dependent or Spouse Deduction, which means:

• Additional paperwork (re-submission of forms)

• Possible adjustment of withholding tax for December payroll

• Updated information to be reflected in annual reports and e-Tax submissions

Employers should:✅ Communicate the change clearly to employees before mid-November✅ Collect updated Dependent Deduction Forms promptly✅ Confirm the correct taxable income based on the new thresholds

🗝️ Key Point:This revision aims to make the tax system fairer and more flexible for families. Early preparation will save both employers and employees from last-minute confusion in December.

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This article is part of a bilingual series for foreign business owners in Japan.Next issue will cover practical tips for completing the year-end adjustment smoothly.