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Pays Salaries

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What this setting means

The "Pays Salaries" setting applies to businesses that pay wages or compensation to employees or officers. For corporations (KK/GK), officer remuneration (役員報酬) counts as salary — if you pay any officer compensation, enable this setting. For sole proprietors (個人事業主), this applies when you hire employees or pay salaries to family members registered as blue return dedicated workers (青色事業専従者).

Who should enable this

Corporations (KK/GK): Nearly all corporations should enable this, since officer remuneration (役員報酬) qualifies as salary. Only turn it off if your company has just been established and no officer compensation has been determined yet. Sole Proprietors (個人事業主): Enable this if you employ at least one person, or if you pay salaries to family members as blue return dedicated workers (青色事業専従者). If you operate entirely on your own, leave it off.

Related dates

References

  1. NTA: Guide to Withholding Tax
  2. NTA: Year-End Adjustment Procedures
  3. Japan Pension Service: Standard Remuneration Report