This page summarizes how to add dependents for personal tax calculations on an employee’s payroll forms.
In 2015, the Japanese government updated the conditions under which dependents living abroad could be added to an employee’s payroll forms for personal income tax calculations. (There may be a change in condition for personal income tax calculation for 2023.) To be included as dependents, one of the two following conditions must be met:
To prove their relationship to the person being listed as a dependent, an employee must submit two types of documentation:
To prove that an employee in Japan is providing financial support to a dependent living abroad, they must submit copies of bank transfer slips that show funds being transferred to the dependent. If the employee intends to list another family living abroad as dependents, it is important to note that a single money transfer may not be accepted as proof of that dependency, unless they are children of the person receiving the transfer.
To make personal income tax calculations for employees in Japan, the government considers a dependent to be a relative (other than the spouse) who is supported by the employee whose income does not exceed 480,000 JPY per year. A dependent does not necessarily need to live with the employee, but they should receive some form of financial support from the employee. Dependent registration in Japan allows the employee to write off any money they provide for the support of a family member.
Dependent registration can be a good option for Japanese employees who have family living domestically or overseas, but to have the best chances of completing the process, it is a good idea to speak with an expert tax consultant like the ones at JMC.
Disclaimer: This information is provided for informational purposes only. Companies should speak with a licensed social insurance consultant before making any decisions based on this information.