Tax & Filing 2026

Does Your Employer's Year-End Tax Adjustment Cover Your Side Income? Who Must File a Tax Return in Japan

What salaried side earners need to sort out before year-end, drawn from what the NTA has published on the year-end tax adjustment (nenmatsu chosei).

¥200k

Non-salary income above this means a tax return (one employer)

Employer you can give the dependant exemption declaration to

Otsu

Withholding column used for side-job salary

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The year-end adjustment settles only that employer's salary

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Your year-end adjustment is done. That only closes out your salary.

The year-end adjustment squares the income tax your employer withheld with the tax due on a full year of salary. Your employer only knows the salary it paid you.

💡 Affiliate and other side income is not part of the year-end adjustment

The dividing line: ¥200,000 of non-salary income

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①

One employer: file a tax return if income other than salary and retirement income totals more than ¥200,000 (NTA No.1900)

②

You compare income, not sales (earnings minus necessary expenses)

③

Salary revenue over ¥20 million: filing is required regardless of any side business

💡 Estimate from confirmed commissions and expenses, not from what has been paid out

¥200,000 or less is not a free pass

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①

File a return for the medical expense deduction or furusato nozei, and you include your side income on it

②

Resident tax has no ¥200,000 rule, so a resident tax declaration is a separate question

Side job pays a salary? The otsu column

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①

The dependant exemption declaration goes to your main employer only (No.2520)

②

A side employer without it withholds under the otsu column (No.2511)

③

Secondary salary cannot be year-end adjusted: you settle it on your tax return (No.2520)

Paid by two or more employers

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①

File if salary not year-end adjusted plus non-salary income totals more than ¥200,000 (No.1900)

②

Exception: no filing if total salary revenue minus income deductions (excluding casualty loss, medical expense, donation and basic deductions) is ¥1.5 million or less and non-salary income is ¥200,000 or less

💡 If the otsu column took too much, filing can get some back

The 2025 reform and the year-end adjustment

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①

Effective December 1, 2025, applying to the 2025 tax year onward. Reflected in the December 2025 year-end adjustment

②

Basic deduction: ¥950,000 with total income of ¥1.32 million or less (¥480,000 before). The step depends on total income

③

Employment income deduction minimum: ¥550,000 → ¥650,000

⚠ Side income counts toward total income. The ¥200,000 line (No.1900) is unchanged

Four things to do before year-end

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①

Estimate your side profit for the year

②

Organise expense receipts and statements before the year ends

③

Count who pays you a salary and secure every withholding slip

④

Do your main job's year-end adjustment as usual, then use that withholding slip on your return

The year-end adjustment is your employer's job. Reporting side income is yours.

The year-end adjustment settles only that employer's salary. Side income is not included

With one employer, non-salary income over ¥200,000 means a tax return. The test is income

Whether your employer finds out is a resident tax question, separate from the year-end forms

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These slides are general information, not tax advice. Whether you need to file and your income category are individual determinations for your tax office or a licensed tax accountant. Trading carries the risk of losing your principal

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