- Your employer's year-end tax adjustment settles only the tax on the salary that employer pays. Affiliate and other side income is not included
- With salary from one employer, you must file a tax return once your non-salary income totals more than ¥200,000 (NTA No.1900). The test is income, not sales
- If your side job also pays a salary, it is withheld under the otsu column. Secondary salary is never year-end adjusted, so you settle it on your tax return
- Whether your employer finds out about your side income is a question of resident tax, not the year-end adjustment
Key points: frequently asked questions
- Q: My employer did my year-end adjustment. Can I skip filing for my side income?
- A: No. The year-end adjustment only settles that employer's salary. If you are paid by one employer, you must file a tax return once your side and other non-salary income totals more than ¥200,000 (NTA No.1900).
- Q: My side job is part-time work that also pays me a salary. What happens at year-end?
- A: Only the main employer you gave your dependant exemption declaration to can do your year-end adjustment. Salary from your side job is withheld under the otsu column and is not year-end adjusted, so you settle it yourself on a tax return (NTA No.2520).
This article is for salaried employees who also run an affiliate or other side business in Japan. It is general, educational information that organises what the National Tax Agency (NTA) has published on the year-end tax adjustment and tax returns (based on laws and regulations as of April 1, 2026), not tax advice. Whether you need to file, your income category and the amount of any deduction are individual determinations: check with your local tax office or a licensed tax accountant (zeirishi).
The year-end adjustment settles only "that employer's salary"
Around November, your employer hands out the year-end tax adjustment forms. You fill in the insurance premium deductions, hand them in, and a little tax comes back in your December or January pay. Plenty of people take that as the end of their tax year. If you have no side business, they are mostly right.
The year-end tax adjustment (nenmatsu chosei) is the employer-run process that squares the income tax withheld from your monthly pay with the tax actually due on a full year of salary. Your employer only knows about the salary it paid you. It has no idea what you earned from affiliate commissions or what you spent to earn them, and none of that goes into the calculation.
If the total salary confirmed as payable to you in a year exceeds ¥20 million, you are not covered by the year-end adjustment. You must then file a tax return whether or not you have a side business (No.1900).
In other words, side income travels by a different route. That route is the tax return (kakutei shinkoku, the annual self-assessment filed between February and March), and whether you need to file comes down to the ¥200,000 line below.
The dividing line: does your non-salary income exceed ¥200,000?
NTA Tax Answer No.1900 lists which salaried workers must file a tax return. For employees with a side business, these are the rows that matter.
| Your situation | When you must file (No.1900) |
|---|---|
| Salary from one employer only; side business is affiliate or other non-salary income | Your income other than salary and retirement income totals more than ¥200,000 |
| Salary from two or more payers (your side job also pays a salary) | Salary revenue not covered by a year-end adjustment plus income other than salary and retirement income totals more than ¥200,000 (see the exception below) |
| Salary revenue over ¥20 million | Required regardless of any side business |
The easy mistake is what the ¥200,000 refers to. You compare income, not sales: your earnings minus necessary expenses. Earn ¥300,000 a year in affiliate commissions, and if server and tool costs bring the remainder to ¥200,000 or less, this condition does not apply. The reverse also holds. "Not much has hit my bank account yet" is no defence: if confirmed commissions have pushed your profit past ¥200,000, you need to file.
The ¥200,000 rule only means you do not have to file an income tax return. If you file one anyway, for example to claim the medical expense deduction or the donation deduction for furusato nozei (hometown tax donations), you include side income of ¥200,000 or less on it. And resident tax has no ¥200,000 rule. Even if you skip the income tax return, you still need to think separately about a resident tax declaration to the municipality where you live.
Furusato nozei and side income together hide plenty of traps, so we cover them separately in side income and the furusato nozei limit.
If your side job pays a salary: the otsu column, and no year-end adjustment
Things shift a little if your side job is shift work at a convenience store or restaurant, or any other employment that pays you a salary.
According to NTA No.2520, the dependant exemption declaration (fuyo kojo-to shinkokusho) goes to only one payer: the one paying your main salary. If you gave it to your main employer, you do not give it to your side employer. A payer without that declaration withholds tax using the otsu column of the withholding tax table (No.2511), rather than the kou column used for your main job. That is why more tax comes off side-job pay.
The same No.2520 states that secondary salary cannot be put through a year-end adjustment, so you have to settle it yourself on a tax return. Your side employer will still send you a withholding slip (gensen choshu-hyo), but it is not a "year-end adjusted" document.
If your total salary revenue minus income deductions (excluding the casualty loss, medical expense, donation and basic deductions) is ¥1.5 million or less, and your income other than salary and retirement income is ¥200,000 or less, you do not need to file.
When the otsu column has taken more than necessary, filing can get some tax back. It is worth working out not only whether you must file, but whether filing would leave you better off.
The reform from the 2025 tax year: what changed at year-end
The FY2025 tax reform revised the income tax basic deduction and the employment income deduction. According to the NTA's year-end adjustment guidance, the changes in principle took effect on December 1, 2025 and apply to income tax for the 2025 tax year onward. The main points:
- Basic deduction revised: raised in steps according to total income. For example, with total income of ¥1.32 million or less it is ¥950,000 (¥480,000 before the reform)
- Employment income deduction: the guaranteed minimum rose from ¥550,000 to ¥650,000
- New special deduction for specified relatives: up to ¥630,000 for a relative aged 19 to under 23 whose total income is within a set range
For the 2025 tax year, these changes were reflected in the December 2025 year-end adjustment. For the 2026 tax year onward, the NTA says new withholding tax tables apply and the income requirements for dependants and similar relatives are also revised. The basic deduction table also differs by tax year (No.1199), so check the table for your year.
The point for side earners: your basic deduction step is set by your total income, and total income includes side income as well as salary. The year-end adjustment calculates from your salary, but adding side profit can move you into a different step, and the difference is settled on your tax return. The reform did not make filing for side income unnecessary just because deductions went up. The ¥200,000 line (No.1900) is unchanged.
"Will my employer find out?" is a resident tax question
The year-end adjustment forms have no box for side income, so nothing about it reaches your employer that way. That much is true. What can tip your employer off is the following year's resident tax. The resident tax deducted from your salary is calculated by your municipality on your total income, side income included, and the amount is sent to your employer.
How you pay resident tax on side income, by special collection through your salary (tokubetsu choshu) or ordinary collection paid yourself (futsu choshu), is a choice you make in the resident tax section of your tax return. We will not go deeper here. See side hustle resident tax basics for the details.
What you need to file: your employer's withholding slip
Once the year-end adjustment is done, your employer gives you a withholding slip (gensen choshu-hyo). On your tax return you copy figures such as the "amount paid" and "tax withheld" from that slip, add your side income, and recalculate tax for the full year. Tax your employer has already withheld is credited at this point.
If your side job also pays a salary, you need both withholding slips. When January comes, first check that you have the slips from your main job and your side job. Our side income tax return guide walks through the filing process.
Four things to do before year-end
The return itself is filed in the new year, but you can gather what you need to decide whether to file before December ends.
For how to tidy your books in December, see year-end bookkeeping for side hustles. The year-end adjustment is your employer's job; reporting your side income is yours. Draw that line now and the new year will not catch you scrambling.
Frequently asked questions
[Disclaimer] OlympTrade is an offshore platform that is not registered with Japan's Financial Services Agency (FSA), so Japan's investor protection schemes do not apply. This article is general, educational content from the Kingfin editorial team and is not tax advice. It summarises information published by the NTA and does not determine any individual taxpayer's deduction limit or whether they need to file. Laws and circulars may be amended. Based on information as of publication (October 8, 2026).
