Payroll Compliance Updates-Japan
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A. Update

The National tax agency has released revised template of Complete Ledger Report. The changes in report are in presentation related to Single parent and Income Adjustment exemption declaration.

B. Statutory Compliance Release Date: May 17, 2021
C. Effective Date: January 01, 2021
 
A. Update

As per the summary of withholding tax revisions released by National Tax Agency for the third year of Reiwa/2021, following will be the impact on payroll:

  • 1. The Taxable Retirement Income calculation procedure has been revised for the Retirement Allowance paid to employee whose service period is equal to or less than five years. According to the update the formula of taxable retirement income will be revised as follows:
Condition Taxable Retirement Income
If, Retirement Income net of Amount of deduction is less than or equal to 3,000,000 JPY (Retirement Income – Amount of deduction) * 1 / 2
If, Retirement Income net of Amount of deduction is more than 3,000,000 JPY 1,50,000 JPY + {Retirement Income – (3,000,000 + Amount of deduction)}
  • 2. The seal on Dependent Declaration report is no longer required to be attached
B. Statutory Compliance Release Date: April 29, 2021
C. Effective Date: January 01, 2022
 
A. Update

The new format of Labour Declaration Form and Worksheet also known as Estimated Insurance Premium Report has been released by Ministry of Health, Labour and Welfare for 2021 reporting. The updated formats are available on the appended link.

In the new format, the details related to employees above age of 64 years have been deleted since from April 01, 2020 contribution can be made towards unemployment insurance irrespective of age.

B. Statutory Compliance Release Date: March 29, 2021
C. Effective Date: March 29, 2021
 
A. Update

As per the recent amendment, the new Health insurance premium rate and Long-term care insurance premium rate (also known as Nursing Insurance) of the Japan Health Insurance Association for the 3rd year of Reiwa i.e.2021 will be applied from March, 2021. Employer and employee contributes towards Health Insurance and Nursing Care Insurance in equal proportion.

The Health Insurance Premium rates are revised at prefecture level. For example for Tokyo the rate is revised from 9.87% to 9.84%.

The Nursing-Care Insurance, a nationwide uniform long-term care insurance premium rate is revised from 1.79% to 1.80%.

B. Statutory Compliance Release Date: February 16, 2021
C. Effective Date: March 1, 2021
 
A. Update

The Dependent exemption report for Reiwa 3 i.e. financial year 2021 has been updated by National Tax Agency. Apart from the tax year, new field to capture single parent is added and existing field with single parent receiving the child care rearing allowance is removed.

B. Statutory Compliance Release Date: November 18, 2020
C. Effective Date: January 01, 2021
 
A. Update

As per the recent update the ceiling of pension contribution on salaries is revised from 620,000 Yen to 650,000 Yen.

The Employer and Employee both contribute towards Pension in equal proportion. As such, the employer and employee both contribute 9.15% each from the monthly salary.

B. Statutory Compliance Release Date: September 02, 2020
C. Effective Date: September 01, 2020
 
A. Update

The National Tax Agency Japan has released the updated version of Withholding Tax Report.

Apart from the Japanese era, new fields are added to capture the Amount of Basic Exemption and the Amount of exemption of income adjustment (Additional Employment Exemption).

B. Statutory Compliance Release Date: June 05, 2020
C. Effective Date: January 01, 2020
 
Source:
A. Update

The Complete Ledger of Withholding Income tax for Employment Income has been updated. New fields to capture the amount of income adjustment and Basic exemption are updated in the template of report.

B. Statutory Compliance Release Date: May 21, 2020
C. Effective Date: Financial Year (FY) 2020
 
Source:
A. Update

The Application of Spouse exemption has been amended and the title has been changed to “Application for Exemption for Basic, Spouse and Income Adjustment”.

The amended form captures the detail related to Basic exemption, spouse exemption and Income Adjustment.

B. Statutory Compliance Release Date: April 21, 2020
C. Effective Date: Financial Year (FY) 2020
 
A. Update

A new single-parent deduction is established for singles who support children. As a result, the scope of Widow Deduction has been reviewed and Widower Deduction has been abolished.

In accordance with the revision the Widow deduction is now categorized as General Widow and Single Parent.

Single Parent is defined as the one who has not since remarried or whose spouse is not known to be living or dead and meets all three of the following conditions:

  • a) Have a child living in the same household as the earner of salary;
  • b) Total amount of employment income is 5,000,000 yen or less; and
  • c) No one is found to be in a situation similar to a marriage relationship with that person.

The deduction amount for the taxpayer categorized as Single parent is 350,000 Yen.

Further, the general widow is defined as the person who is not categorized as Single parent and meets any of the following condition:

  • a) Has not married after divorce, have dependents, and whose total income is 5 million yen or less; or
  • b) Has not been married since the death of her husband, or a person whose husband’s death is not known and whose total employment income 5 million Yen or less.

The deduction amount for the taxpayer categorized as General Widow is 270,000 Yen.

B. Statutory Compliance Release Date: April 02, 2020
C. Effective Date: January 01, 2020
 
A. Update

The contribution rate of Child upbringing has been revised through cabinet approval.

The contribution rate has been updated from 0.34% to 0.36%.

B. Statutory Compliance Release Date: March 31, 2020
C. Effective Date: April 01, 2020
 
A. Update

Contribution Rates for Long term care insurance will be as under:

  • Employee: 0.895%
  • Employer: 0.895%

Contribution Rates for Health insurance premium will be as per the appended source.

B. Statutory Compliance Release Date: February, 2020
C. Effective Date: March 01, 2020
 
A. Update

Earlier the employees who were above 65 years were exempt from contributing towards Employment Insurance premium. However, with a recent amendment by Ministry of Health, Labour and Welfare employer needs to deduct contribution even on employees who are above 65 years of age.

B. Statutory Compliance Release Date: February, 2020
C. Effective Date: April 01, 2020
 
A. Update

The National Tax Agency has released the updated format of Dependent Exemption Report. 

B. Statutory Compliance Release Date: December 21, 2020
C. Effective Date: January 01, 2020
 

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