This is a translation of the Japanese original. The Japanese version is authoritative; figures follow Japanese tax law.
For the 2026 tax year (Reiwa 8), the employment income deduction is a flat ¥740,000 for salary income up to ¥2,200,000. The minimum guaranteed amount rose by ¥90,000, from ¥650,000. But for anyone earning more than ¥2,200,000, the deduction is not one yen higher than in 2025. At ¥5,000,000 a year it is ¥1,440,000; above ¥8,500,000 it stops at ¥1,950,000. Tax still falls, and the reason is the basic deduction, which rose to as much as ¥1,040,000. The change takes effect on 1 December 2026, and it is settled in the year-end adjustment rather than in the monthly withholding. Start by checking the box on your withholding tax statement marked "Amount of salary etc. after the employment income deduction (after adjustment deduction)".
The short answer: ¥740,000 up to ¥2,200,000, capped at ¥1,950,000 above ¥8,500,000
| Salary and other income | 2025 tax year | 2026 and 2027 tax years |
|---|---|---|
| Up to ¥1,900,000 | ¥650,000 | ¥740,000 |
| Over ¥1,900,000 up to ¥2,200,000 | Income × 30% + ¥80,000 | ¥740,000 |
| Over ¥2,200,000 up to ¥3,600,000 | Income × 30% + ¥80,000 | Income × 30% + ¥80,000 |
| Over ¥3,600,000 up to ¥6,600,000 | Income × 20% + ¥440,000 | Income × 20% + ¥440,000 |
| Over ¥6,600,000 up to ¥8,500,000 | Income × 10% + ¥1,100,000 | Income × 10% + ¥1,100,000 |
| Over ¥8,500,000 | ¥1,950,000 | ¥1,950,000 (cap) |
Sources: National Tax Agency No.1410[NTA], Outline of the revision of withholding income tax[NTA]
The only people who gained are those earning ¥2,200,000 or less. The NTA says as much: "there is no revision to the employment income deduction where income exceeds ¥2,200,000"[NTA Outline]. Two things changed, and two only: the minimum guaranteed amount, and the income level at which it ends.
The two lines are apart at the left edge only. They meet at ¥2,200,000 and climb the same staircase from there.
The ¥740,000 is ¥690,000 of permanent law plus a ¥50,000 add-on that lasts two years
¥740,000 is not a single figure. It is the permanent statutory ¥690,000 plus a ¥50,000 special add-on that applies to the 2026 and 2027 tax years only[MOF Outline]. The add-on rests on Article 29-4 of the Act on Special Measures Concerning Taxation[NTA Outline].
| Tax year | Statutory | Add-on | Minimum guaranteed amount |
|---|---|---|---|
| 2025 | ¥550,000 | +¥100,000 | ¥650,000 |
| 2026 and 2027 | ¥690,000 | +¥50,000 | ¥740,000 |
| 2028 onwards | ¥690,000 | — | ¥690,000 |
Sources: NTA Outline of the revision (2) a; MOF Outline of tax reform, Part 1 (2) 1 and (5) 1
The statutory ¥690,000 comes with a new mechanism attached. It is reviewed every two years against the change in the nationwide consumer price index over the preceding two years[NTA Outline]. In the first year of a review, however, the change is handled from the year-end adjustment onwards[MOF Outline].
The employment income deduction plus the basic deduction is the level of salary at which income tax starts.
- 2025 = ¥650,000 + ¥950,000 = ¥1,600,000
- 2026 and 2027 = ¥740,000 + ¥1,040,000 = ¥1,780,000
- 2028 onwards = ¥690,000 + ¥990,000 = ¥1,680,000
The Ministry of Finance describes this as "raising the minimum taxable threshold to ¥1,780,000 as a special measure, brought forward"[MOF Summary]. Because it is brought forward, from the 2028 tax year the line is ¥1,680,000[NTA No.1199].
The deduction and employment income by salary level: above ¥2,200,000, the same as 2025
Where the right-hand column reads 0, the employment income deduction has not moved by a single yen from the 2025 tax year.
| Annual salary | Employment income deduction (2026-27) | Employment income | Change from 2025 |
|---|---|---|---|
| ¥1,500,000 | ¥740,000 | ¥760,000 | +¥90,000 |
| ¥2,000,000 | ¥740,000 | ¥1,260,000 | +¥60,000 |
| ¥3,000,000 | ¥980,000 | ¥2,020,000 | 0 |
| ¥4,000,000 | ¥1,240,000 | ¥2,760,000 | 0 |
| ¥5,000,000 | ¥1,440,000 | ¥3,560,000 | 0 |
| ¥6,000,000 | ¥1,640,000 | ¥4,360,000 | 0 |
| ¥7,000,000 | ¥1,800,000 | ¥5,200,000 | 0 |
| ¥8,000,000 | ¥1,900,000 | ¥6,100,000 | 0 |
| ¥10,000,000 | ¥1,950,000 | ¥8,050,000 | 0 |
| ¥15,000,000 | ¥1,950,000 | ¥13,050,000 | 0 |
This site's estimate, applying the table in NTA No.1410. The employment income figures for ¥3m, ¥4m, ¥5m and ¥6m match Appended Table 5[NTA Table 5].
Above ¥8,500,000 the deduction is fixed at ¥1,950,000. From there, a higher salary does not raise the deduction by one yen.
Below ¥6,600,000, Appended Table 5 decides the figure, not the quick formula
For salary income under ¥6,600,000, employment income is set by Appended Table 5 of the Income Tax Act rather than by the quick formula[NTA No.1410, note 3]. The table divides salary into bands of ¥4,000, so ¥5,000,000 and ¥5,003,000 both give employment income of ¥3,560,000[NTA Table 5]. Below ¥2,200,000 there are further bands of its own.
| Salary income | Employment income |
|---|---|
| Under ¥741,000 | ¥0 |
| ¥741,000 or more, under ¥2,191,000 | Salary income − ¥740,000 |
| ¥2,191,000 or more, under ¥2,193,000 | ¥1,451,000 |
| ¥2,193,000 or more, under ¥2,196,000 | ¥1,453,000 |
| ¥2,196,000 or more, under ¥2,200,000 | ¥1,456,000 |
Source: NTA No.1410, note 2
At ¥6,600,000 or more the figure comes from the formula rather than the table, and fractions of a yen are dropped[NTA Table 5].
The box is called "Amount of salary etc. after the employment income deduction (after adjustment deduction)". Take that figure away from the payment amount and you have the deduction. For anyone who claimed the income amount adjustment deduction, that amount has been taken off the figure as well.
What moved take-home pay was the ¥1,040,000 basic deduction
For people earning more than ¥2,200,000, the reason the tax bill fell is the basic deduction. For the 2026 and 2027 tax years it reaches ¥1,040,000, but not everyone gets ¥1,040,000[NTA No.1199]. There are three steps, set by total income.
| Approximate salary income | Total income | Basic deduction |
|---|---|---|
| ¥6,655,556 or less | ¥4,890,000 or less | ¥1,040,000 |
| Over ¥6,655,556 up to ¥8,500,000 | Over ¥4,890,000 up to ¥6,550,000 | ¥670,000 |
| Over ¥8,500,000 up to ¥25,450,000 | Over ¥6,550,000 up to ¥23,500,000 | ¥620,000 |
Sources: NTA No.1199, Outline of the revision (1) a (the table differs where the income amount adjustment deduction applies)
Go one yen over salary income of ¥6,655,556 and the basic deduction drops from ¥1,040,000 to ¥670,000. That is a ¥370,000 cliff. A pay rise crosses it easily, so check the payment amount on your withholding tax statement.
- Employment income deduction = ¥5,000,000 × 20% + ¥440,000 = ¥1,440,000
- Employment income = ¥3,560,000 (matches Appended Table 5)
- Social insurance premium deduction = ¥725,000 (¥5,000,000 × 14.5%)
- Basic deduction = ¥1,040,000 (total income of ¥3,560,000 is ¥4,890,000 or less)
- Taxable income = ¥3,560,000 − ¥725,000 − ¥1,040,000 = ¥1,795,000
- Income tax = ¥1,795,000 × 5% = ¥89,750, or ¥91,600 with the reconstruction surtax
In the 2025 tax year the basic deduction was ¥680,000 and the income tax ¥110,000. The gap of about ¥18,400 comes from the ¥360,000 increase in the basic deduction. Income tax, residence tax and take-home pay by salary level are set out in how income tax is calculated (quick table by salary).
Note: social insurance is estimated at 14.5% of salary (the quick-table article uses 15%). It varies with your grade and your area.
In force on 1 December 2026, and refunded once, in the year-end adjustment
The effective date is 1 December 2026[NTA No.1410, note 1]. The NTA states that "there is no change to withholding on salary paid up to November 2026"[NTA Q&A].
- Up to November 2026 — withholding continues on the pre-revision tax tables. The basic deduction inside those tables stays at ¥580,000[NTA computerized calculation].
- The year-end adjustment in December 2026 — the whole year is recalculated on the new basic deduction and the revised Appended Table 5, and settled.
- On and after 1 January 2027 — the withholding tax tables themselves are revised, and the monthly deduction changes[NTA Q&A].
Most of the refund comes from the ¥460,000 difference in the basic deduction (¥580,000 to ¥1,040,000). For people earning ¥2,200,000 or less, the ¥90,000 of employment income deduction is added on top.
- At a 5% income tax rate = ¥460,000 × 5% × 1.021 = about ¥23,500
- At a 10% income tax rate = ¥460,000 × 10% × 1.021 = about ¥47,000
Note: a guide for someone with the ¥1,040,000 basic deduction. Other deductions are settled at the same time.
On your December payslip, compare the "income tax" line with the month before. The monthly deductions are explained in how to read a payslip (the seven deductions).
Two add-on deductions are left for people above ¥2,200,000
Even in the bands where the employment income deduction did not rise, two separate deductions can be added.
- Income amount adjustment deduction — above salary income of ¥8,500,000, if you have a dependent relative under 23, you can take (salary − ¥8,500,000) × 10%, up to ¥150,000, off your employment income[NTA No.1411].
- Specific expenditure deduction — specific expenditure above half of your employment income deduction can be claimed in a tax return[NTA No.1410]. The entry point at ¥5,000,000 a year is ¥720,000; at ¥2,200,000 or less it rose from ¥325,000 to ¥370,000.
The income amount adjustment deduction lowers total income as well. But it lowers it by only 10% of the excess, so it does not bring you back under the ¥6,550,000 line for the basic deduction (this site's estimate). See the income amount adjustment deduction (salary over ¥8.5 million) and why the specific expenditure deduction is out of reach.
Summary
- For Reiwa 8 (2026), the employment income deduction is a flat ¥740,000 for annual income up to ¥2.2 million. The minimum guaranteed amount rose by ¥90,000 from ¥650,000.
- For those with annual income over ¥2.2 million, the deduction amount is unchanged from Reiwa 7 (2025). It is ¥1.44 million at ¥5 million income, capped at ¥1.95 million above ¥8.5 million.
- Taxes become lighter because the basic deduction rose to a maximum of ¥1.04 million. For salary income above ¥6,655,556, it drops to ¥670,000.
- It takes effect on December 1, Reiwa 8 (2026). Rather than through monthly withholding, it is settled in the year-end adjustment, returning about ¥23,500 for someone in the 5% tax bracket.
- First, check the "Amount of salary after employment income deduction (after adjustment deduction)" field on your withholding tax statement.
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Reference links (sources)
- NTA No.1410, Employment income deduction — the 2026-27 table and the add-on
- NTA No.1199, Basic deduction — the ¥1,040,000 and the ¥990,000 from 2028
- NTA, Outline of the revision of withholding income tax (April 2026) — the make-up of the ¥740,000 and the price link
- NTA, How to carry out the year-end adjustment for 2026 — Appended Table 5 and the "after adjustment deduction" box
- NTA, Q&A on the increase in the basic deduction and related matters — how the 1 December 2026 start applies
- NTA, Special provision for computerized calculation (2026) — the deduction used in monthly withholding
- NTA No.1411, Income amount adjustment deduction — the add-on above ¥8,500,000
- MOF, Outline of the fiscal 2026 tax reform — the statutory ¥690,000 and the ¥50,000 add-on
- MOF, Summary of the outline — the ¥1,780,000 minimum taxable threshold
Note: the estimates in this article are this site's own application of the NTA tables and formulas, not worked examples published by the NTA. For an individual decision, ask a tax office or a tax accountant. Glossary: employment income deduction, basic deduction.