Overview

Withholding tax (源泉所得税) is a system where the payer deducts income tax from salaries and compensation at the time of payment and remits it to the government. Tax withheld from salaries must be paid by the 10th of the month following payment. Businesses with fewer than 10 employees can apply for the semi-annual payment special provision (納期の特例) to consolidate payments to twice a year.

Key things to know

• Monthly payment is due by the 10th of the following month • The semi-annual provision (納期の特例) allows payment twice a year (July and January) • Officer remuneration (役員報酬) is subject to withholding • Payments to outside professionals (accountants, designers, etc.) may also require withholding • Year-end adjustment (年末調整) reconciles the annual total

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