I presume you’ve all returned to work by now. Beginning of the year in Japan normally starts off by drinking sake at the office, visiting customers for a new year’s greetings, and going to nearby shrines. The HR department, however, is still in the midst of its busy season. No time to be sipping sake at their desks. Under the Japanese Income Tax Law （所得税）employers are required to issue the Japanese version of W-2 forms （源泉徴収票）by January 31st of each year to be distributed to their employees as well as to the municipal government offices that have jurisdiction over their employees’ place of residence.
The Japanese W-2 form is the result of the year-end adjustment performed by your HR or by another person or entity your employer outsourced its payroll functions to. The form indicated your age, the number of dependents you are claiming and their age and health conditions, your gross income, income deduction, taxable income, life insurance premiums paid, non-life insurance premiums paid, social insurance premiums paid, mortgage payments paid, income tax withheld up to your last paycheck, income tax that should’ve been withheld according to the information you submitted for year-end adjustment, and the difference as refund or additional withholding. All in all, it’s a copy of your tax return.
This form becomes important if you want to file a more detailed tax return separate from the year-end adjustment. Because the year-end adjustment is designed as a one-size-fit-all simplified tax return for salaried employees, it only takes into consideration of salary income and disregards other sources of income such as interests, dividends, rental, business, capital gains, and property sales. It also disregards itemized deductions such as charitable contributions, medical expenses, capital losses, to name a few. Therefore, if you have sources of income other than salary from your employer, you’re more than likely than not to be required to file a separate tax return by March 15th. Even if you don’t have other sources of income, filing a separate tax return is the only way you can claim additional deductions and increase your tax refund. And the Japanese W-2 form must be attached to the separately filed tax return to be accepted by the tax office （税務署）that has jurisdiction over your address.
Thinking about working in Japan? Preparing to move overseas almost becomes a full-time job in the final weeks of your departure. Many people quit their jobs weeks before so they can devote their time to preparation. But what about your health insurance? Short-term health insurance plans are a great solution. ↓
Below are links to Certified Social Insurance and Labor Consultants providing services in English. Also below are useful links related to working in Japan and links to women balancing career and personal happiness. WJA realizes and promotes women's increasing value in the labor market.