Japan Payroll — 源泉徴収 Withholding, 社会保険 & 年末調整 Year-End Adjustment

Confirm the employer is registered as a withholding agent (源泉徴収義務者) with the tax office, enrolled with Japan Pension Service (日本年金機構) for 厚生年金/健康保険, and registered with Hello Work (ハローワーク) for employment insurance. Establish the payroll calendar, pay frequency (typically the 25th), and whether the small-employer semi-annual withholding tax remittance option applies (≤10 employees). Verify the 36 Agreement (三六協定) is filed with the Labour Standards Inspection Office if overtime will be worked.

Collect the 扶養控除等申告書 (dependency exemption declaration) from each new employee to determine 甲 (primary employer) vs 乙 (secondary employer) status for the withholding tax table. Determine the Standard Monthly Remuneration (標準報酬月額, SMR) grade for social insurance purposes. For employees under 40 confirm no 介護保険 deduction; for ages 40–64 add the long-term care component. Receive the municipality's 住民税 special collection (特別徴収) notification each May for the June–May withholding cycle.

Calculate gross pay including base salary (基本給), overtime premiums (125% for standard OT, 150% for OT exceeding 60 hrs/month or late-night, 135% for statutory holiday work), and allowances. Determine income tax withholding from the NTA's 源泉徴収税額表 monthly table (甲 or 乙 column, number of dependents). Deduct employee social insurance: health insurance (~4.925% of SMR for Tokyo 協会けんぽ), 厚生年金 (9.150% of SMR, cap ¥650,000), 雇用保険 (0.50% of total wages from April 2026), and 子ども・子育て支援金 (0.115%). Deduct the fixed monthly 住民税 amount. Issue the 給与明細書 (payslip).

Remit withheld income tax and reconstruction surtax to the tax office by the 10th of the following month (or semi-annually on 10 July / 10 January for approved small employers) via e-Tax or bank transfer. Pay combined employer + employee social insurance premiums to Japan Pension Service and the health insurance association by the end of the following month. Pay employment insurance and workers' compensation premiums as part of the annual labour insurance update cycle (年度更新, June–July). File the 賞与支払届 within 5 days of any bonus payment.

Each July, file the 算定基届 (annual standard monthly remuneration determination report) with Japan Pension Service based on each employee's average April–June earnings. The new SMR grades take effect from September. This annual reset ensures social insurance premiums reflect current salary levels. Also complete the annual labour insurance 年度更新 (renewal) between 1 June and 10 July, reporting actual wages paid in the prior year and paying any balance due.

In November–December, collect updated declarations from all 甲-column employees: 扶養控除等申告書 for the coming year, 保険料控除申告書 (insurance premium deduction declaration) for life/earthquake insurance premiums, and 住宅借入金等特別控除申告書 for mortgage interest credits. Recompute each employee's actual annual income tax liability applying the full 給与所得控除, all personal deductions, and the 2.1% reconstruction surtax. The difference between tax withheld and tax due is refunded or collected via the December payroll.

By 31 January, issue each employee's 源泉徴収票 (withholding tax slip), file the 法定調書合計表 (statutory report summary) with the tax office, and submit the 給与支払報告書 (salary payment report) to each employee's municipality of residence. These filings reconcile the full year's withholding and feed the municipality's calculation of next year's 住民税 special collection amounts, completing the annual payroll compliance cycle.