News Details
2025.11.14
Key Tax Revisions for the 2025 Year-End Adjustment (As of October 2025)
Introduction
For the 2025 year-end tax adjustment, important tax reforms have been implemented that affect the calculation of employee income tax and the determination of dependents.
In this month’s newsletter, we highlight some of the key changes introduced by these reforms.
If you have any questions or would like more detailed information, please feel free to contact us.
1. Basic Deduction
1). The deduction amount will increase from JPY 480,000 to JPY 580,000 for individuals with a total income
of JPY 23.5 million or less.
of JPY 23.5 million or less.
2). As a special measure, residents with a total income of JPY 6.55 million or less will be eligible for an
additional deduction of up to JPY 370,000, depending on income level.
2. Employment Income Deduction
1). For employees with an annual salary income of JPY 1.9 million or less, the deduction amount will be
fixed at JPY 650,000.
2). The “Table for Salary after Employment Income Deduction” used for year-end adjustments will be
updated accordingly.
When combined with the increase in the basic deduction (+100,000 yen), the total amount of available deductions will rise by 200,000 yen.
As a result, the so-called “1.03-million-yen threshold” will effectively be raised to 1.23 million yen.
Example: When a part-time or temporary employee earns up to 1.23 million yen in annual income, their taxable income will amount to 580,000 yen or less, and they will be exempt from income tax.
3. Special Deduction for Specified Relatives
For residents supporting an eligible dependent between the ages of 19 and 22, a deduction of up to JPY 630,000 will apply, depending on the dependent’s total income amount.
The key point of this reform is that individuals earning more than 1.23 million yen annually—who were previously excluded from the dependent deduction—can now still qualify for partial deductions if their income is up to 1.88 million yen.
Example: Even if a university student earns 1.5 million yen per year from a part-time job, the parent’s tax burden may be partially reduced.
In other words, this change eases the situation where “earning a little more means losing dependent status,” providing relief for households with student part-timers and similar family situations.
4. Income Thresholds for Dependent Relatives
The income limits for dependent relatives eligible for various deductions will each increase by JPY 100,000, as shown below:
・General dependents: up to JPY 580,000
・Spouse living in the same household: up to JPY 580,000
・Child living with a single parent: up to JPY 580,000
・Working students: up to JPY 850,000
5. Effective Date
These revisions will take effect on December 1, 2025.
Please note that for “quasi-final returns” and other filings, if the final payment date is before December 1, 2025, the previous basic deduction will apply; if the payment date is on or after December 1, 2025, the revised deduction will apply.
If you have any questions regarding these revisions or the updated declaration forms, please do not hesitate to contact us.
We are happy to assist you in understanding how these revisions may affect your year-end tax adjustment.
Conclusion
Under the new tax reforms, both the eligibility conditions and the amounts for certain deductions have changed, and several year-end adjustment forms have been updated accordingly.
If you have any questions regarding these revisions or the updated declaration forms, please do not hesitate to contact us.
We are happy to assist you in understanding how these revisions may affect your year-end tax adjustment.
ARK Social Insurance And Labor Advisors Corporation provide support with revising and drafting Work Rules, conducting training sessions for managers and employees, and related compliance matters.
Please feel free to consult with us.
https://www.ark-outsourcing.com/contact/
ARK Social Insurance And Labor Advisors Corporation provide support with revising and drafting Work Rules, conducting training sessions for managers and employees, and related compliance matters.
Please feel free to consult with us.
https://www.ark-outsourcing.com/contact/
Query on the phone+81-3-6821-9455