News Details
2025.07.18
Revisions to DC, Tax Reform and Heatstroke Prevention Obligations
1. Introduction
This month, we highlight recent legal amendments concerning the defined contribution pension system (DC and iDeCo), along with key tax reform trends such as revisions to the basic and employment income deductions.
We also cover updates affecting corporate practice, including newly introduced income deductions aimed at addressing the so-called “1.5-million-yen barrier” and revisions to retirement income deduction provisions.
In addition, we provide guidance on the mandatory implementation of heatstroke prevention measures in the workplace, with a focus on practical compliance.
2. Recent Legal Revisions Regarding DC and iDeCo
■ Expansion of Eligibility Age for Corporate DC Plans (Effective May 2022)
• Previously enrolling in a corporate Defined Contribution (DC) pension plan was allowed with an age limit of
up to 60 years old but this has now been raised to up to 70 years old.
■ Expansion of Eligibility for iDeCo Participation (Effective May 2022)
The following individuals are now eligible to join iDeCo (individual-type DC pension plans):
1. CategoryⅡinsured persons under the National Pension (Kokumin Nenkin) who are aged between 60
and 64 years old.
2. Individuals aged 60 to 64 who have voluntarily enrolled in the National Pension.
3. Overseas residents who have continued coverage under the National Pension.
■ Planned Increase in Contribution Limits for Corporate DC and iDeCo (Scheduled to take effect from
October 2025)
• For CategoryⅡinsured persons with corporate pension plans:
Previously, iDeCo and corporate pensions had a maximum contribution to iDeCo of JPY 20,000 and up
to a maximum combined amount of JPY 55,000.
As of October, the total monthly contribution limit for both iDeCo and corporate DC plans combined
will be raised to JPY 62,000.
• For CategoryⅡinsured persons without corporate pension plans:
The monthly iDeCo contribution limit will be raised to JPY 62,000.
• For CategoryⅠinsured persons:
The combined monthly contribution limit for iDeCo and the National Pension Fund will be raised to
JPY 75,000 (from the current JPY 68,000).
3. Other Recent Revisions to the Tax System
■ Revisions to Basic and Employment Income Deductions
• The basic income deduction for income tax will be increased to JPY 580,000 for individuals with total
income of JPY 23.5 million or less. (Previously: JPY 480,000)
An additional special deduction of up to JPY 370,000 will be available based on total income.
• The minimum employment income deduction for both income tax and resident tax will be raised to
JPY 650,000. (Previously: JPY 550,000)
*Applies to income tax from 2025 and resident tax from FY2026.
■ New Special Deduction for Parents of Students Aged 19-22
• When a college-aged child’s annual employment income is JPY 1.5 million or less, a special income
deduction of JPY 630,000 can be claimed by one parent.
• If the child earns over JPY 1.5 million, the deduction will be reduced from JPY 630,000 depending on
the income amount.
*Applies to income tax from 2025 and resident tax from FY2026.
■ Revisions to Income Requirements for Dependents
・The income threshold for spouses and dependents in the same household will be raised to JPY 580,000.
(Previously: JPY 480,000)
・The same threshold applies to children of single parents.
・For working students, the threshold will be increased to JPY 850,000. (Previously: JPY 750,000)
・For individuals with business income such as home-based workers, the minimum allowable expense
amount will be increased to JPY 650,000. (Previously: JPY 550,000)
*Applies to income tax from 2025 and resident tax from FY2026.
■ Revisions Related to Retirement Income Deduction
・If a person has received a lump-sum retirement benefit from a DC plan in the past 9 years (previously
4 years), it will now be factored into the retirement income deduction calculation.
*Applies to lump-sum benefits received on or after January 1, 2026.
・The retention period for declarations related to lump-sum retirement income will be extended from 7
years to 10 years.
・Submission of the withholding tax statement for retirement income (gensen choshuhyo) will be required
for all individuals, not just corporate officers.
*Applies to statements submitted on or after January 1, 2026.
4. Mandatory Heatstroke Prevention Measures
Effective June 1, 2025, revisions to the Industrial Safety and Health Regulations will make heatstroke prevention measures mandatory in the workplace.
・Applicable Work Conditions:
Work is subject to these measures if it is expected to be conducted for over 1 hour continuously or
more than 4 hours per day in environments where either: The Wet Bulb Globe Temperature (WBGT)
is 28°C or higher, or the ambient temperature is 31°C or higher.
・Employer Obligations:
1. Establish a reporting system for heatstroke incidents
2. Develop initial response procedures for when a heatstroke case is identified
3. Ensure that all relevant personnel are properly informed
・Penalties:
Violations may result in imprisonment for up to 6 months or a fine of up to JPY 500,000.
If you need assistance creating a detailed action plan, ARK Social Insurance and Advisors Corporation can help you take effective steps to fulfill your obligations.
Query on the phone+81-3-6821-9455