The withholding tax slip (year-end income statement from your employer) is a "report card" of your salary and taxes for one year. Your employer hands it to you between December and January, when the year-end adjustment is finished, and you use it in many situations — filing a tax return, mortgage loan screening, submitting it to a new employer, and more. But the numbers are lined up in a way that makes it easy to wonder, "Which one is my annual income?" or "How much tax did I pay?" This article clearly explains the meaning of the four amounts you should look at and how they relate, with sources from the National Tax Agency. It also covers what changed in the 2025 (Reiwa 7) revision.
① Payment amount (支払金額) = your gross annual income (the total including allowances and bonuses).
② Amount after the employment income deduction (給与所得控除後の金額) = your annual income minus the "employment income deduction" (the allowance corresponding to expenses, ¥650,000 to ¥1.95 million)[NTA No.1410 (in Japanese)].
③ Total of income deductions (所得控除の額の合計額) = the total of deductions you can claim according to your own circumstances, such as social insurance premiums, life insurance premiums, and the basic deduction[NTA (in Japanese)].
④ Amount of withholding tax (源泉徴収税額) = the final fixed amount of income tax (including the special reconstruction income tax) you paid over the year.
Roughly, the relationship is "(② − ③) × tax rate ≒ ④."
The meaning of the four amounts and how they relate
| Field | Meaning | Where it is used |
|---|---|---|
| ① Payment amount | The gross total (annual income) including salary, overtime pay, bonuses, and various allowances. It does not include commuting allowances (the tax-exempt portion) | The "annual income" you are asked for in loan screening, rental contracts, etc. is this |
| ② Amount after the employment income deduction | The "employment income" left after subtracting the employment income deduction from ①. The deduction amount is ¥650,000 to ¥1.95 million depending on income (for the 2025 tax year (Reiwa 7) and onward)[NTA No.1410 (in Japanese)] | The starting point for the tax calculation |
| ③ Total of income deductions | The total of the social insurance premium deduction, life insurance premium deduction, spousal deduction, dependent deduction, basic deduction, and so on[NTA guide (in Japanese)] | Shows how well your tax saving is working |
| ④ Amount of withholding tax | The one year's income tax + special reconstruction income tax fixed after the year-end adjustment | Becomes the basis for a tax return (refund) |
The flow of the calculation is "① payment amount → ② employment income → (② − ③) = taxable income → multiply by the tax rate to get ④." In other words, the larger ② and ③ are (= the more deductions there are), the smaller the tax in ④. Tax savings such as the life insurance premium deduction, iDeCo, and Furusato Nozei (this one mainly affects residence tax) take effect on ③ and beyond.
What changed in the 2025 (Reiwa 7) revision
The Reiwa 7 tax reform brought changes directly tied to the content of the withholding tax slip[NTA special reform page (in Japanese)].
- Increase in the basic deduction: from ¥480,000 to ¥580,000. Furthermore, for the 2025 and 2026 tax years there is an add-on according to income, up to a maximum of ¥950,000.
- The minimum guaranteed amount of the employment income deduction: raised from ¥550,000 to ¥650,000.
- Creation of the special deduction for specified relatives: the income requirement is eased for children of university-student age (19 to 22), etc.
As a result, the so-called "¥1.03 million wall" has moved to ¥1.23 million to ¥1.6 million. For details, see From the ¥1.03 million wall to the ¥1.23 million wall.
Check the lower section too: social insurance premiums, dependents, mortgage loan
- Amount of social insurance premiums, etc.: the total of health insurance, employees' pension, and employment insurance withheld from your salary. The full amount is an income deduction.
- Deduction amount for life insurance premiums and earthquake insurance premiums: the portion you declared in the year-end adjustment. If you forgot to include it, you can recover it by filing a tax return.
- (Withholding) spouse eligible for deduction and dependents eligible for deduction: the application status of the spousal deduction and dependent deduction.
- Amount of the special credit for housing loans, etc.: the mortgage loan credit (from the second year onward it is applied in the year-end adjustment).
Situations where you need the withholding tax slip
| Situation | Point |
|---|---|
| Filing a return for a side job or a medical expense deduction | Transcribe the numbers into the return form (attaching it is not required. With e-Tax it is on-screen input only) |
| Changing jobs | Submit your former employer's withholding tax slip to your new employer (for combining in the year-end adjustment). See Taxes when changing or leaving a job |
| Mortgage loan, rental, nursery | Submit it as proof of income (what they look at is ① the payment amount) |
If you lose it, you can ask your employer (which has a duty to issue it even after you leave) to reissue it.
FAQ
Which field on the withholding tax slip shows my "annual income"?
It is the "payment amount." This is the gross total including salary, overtime pay, bonuses, and various allowances, and the annual income you are asked for in loan screening, etc. also refers to this figure (it does not include tax-exempt commuting allowances).
What is the "amount after the employment income deduction"?
It is the amount left after subtracting the "employment income deduction" (¥650,000 to ¥1.95 million for the 2025 tax year (Reiwa 7) and onward), which corresponds to an employee's expenses, from the payment amount, and it is called "employment income." Income tax is calculated by subtracting income deductions from this to get taxable income and then multiplying by the tax rate.
When do I receive it?
After the year-end adjustment is finished, your employer issues it together with the December pay statement or around January of the following year. When you leave a job, it is to be issued within one month after your departure. If you lose it, you can request a reissue.
Do I need to attach the withholding tax slip to my tax return?
No (since April 2019, the obligation to attach it was abolished). However, because you transcribe the recorded content (payment amount, amount of withholding tax, social insurance premiums, etc.) when preparing the return form, you keep it on hand as you prepare it.
Data sources
- Employment income deduction (¥650,000 to ¥1.95 million): NTA No.1410 Employment income deduction (in Japanese)
- Recorded content of the "total of income deductions" field: NTA Guide to preparing and submitting statutory records (in Japanese)
- Reiwa 7 revision (basic deduction ¥580,000 to ¥950,000, minimum guaranteed employment income deduction ¥650,000, special deduction for specified relatives): NTA On the review of the basic deduction, etc. (in Japanese)
- Basic deduction: NTA No.1199 Basic deduction (in Japanese)
* This article is general information, not tax advice. For individual decisions, please confirm with a tax office or a licensed tax accountant.