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How the income tax withheld from salary is worked out

Income tax withheld from salary is not a flat percentage. Columns kō and otsu of the withholding tables, the dependants declaration, the new tables in force since 2026, and how monthly withholding differs from year-end adjustment.

Checked 2026.11.07Status: Partly in force; the rest from 1 December 20262 min read

What you will learn
  • How to read the withholding tables
  • When to use column kō or otsu
  • What changed with the 2026 tables
  • Monthly withholding versus year-end adjustment

The short answer

Monthly income tax is not a fixed percentage of salary. It is read from the National Tax Agency's withholding tables using pay after social insurance and the number of dependants, and the year's tax is settled at year-end adjustment. Monthly withholding and year-end adjustment are separate processes with different jobs.

Reading the tables

Employers must withhold income tax from salary. The NTA publishes tables each year: a monthly table, a daily table, and a rate table for bonuses. For monthly pay: deduct social and employment insurance, find the row for the remaining amount, and read the column for the number of dependants. The figures include the special reconstruction income tax.

Columns kō and otsu

  • Employees who have submitted the dependants deduction declaration: column kō, which reflects dependants
  • Those who have not: column otsu, which withholds more

The declaration can be filed with only one employer — the main one — so a second job is taxed on column otsu. Missing the form at onboarding means over-withholding for someone who should be on column kō.

New tables since 2026

The 2025 tax reform revised the basic deduction, raised the employment income deduction floor from 550,000 to 650,000 yen, and created a special deduction for relatives aged 19 to 22. Per the NTA, salary paid from January 2026 uses the new 2026 tables; for 2025, the changes were settled at the December 2025 year-end adjustment. Using last year's tables means wrong withholding all year.

The FY2026 reform (from 1 December 2026)

Separately, the FY2026 reform raises the basic deduction and the employment income deduction floor and revises the income limits for dependants. Per the NTA, it takes effect in principle on 1 December 2026 and applies to income tax from 2026 onward; as of 7 November 2026 it is not yet in force. In practice, withholding through November 2026 is unchanged, and the change starts with the year-end adjustment done in December 2026. Check the NTA guidance for the amounts.

Monthly withholding versus year-end adjustment

Monthly withholding estimates the year's tax from one month's pay and does not reflect deductions such as insurance premiums; a change in dependants counts only from the pay after the employee files an amended declaration. Year-end adjustment recalculates the year with everything applied and refunds or collects the difference.

Summary

Use the right table and column, switch tables every January, and treat year-end adjustment as the true-up. Check the NTA's current guidance at each switch.

Read nextBack officeWhat changes in Japan's 2026 year-end adjustment: basic deduction, employment income deduction and dependant limitsFrom the December 2026 year-end adjustment, Japan raises the basic deduction and the minimum employment income deduction, and changes the income limits for dependants. Based on the National Tax Agency's 2026 guide, this summarizes the new figures and what payroll staff should check before December.
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