Maternity Leave: Year-End Adjustment and Spousal Deduction

The short answer: benefits are not income; salary of 1.36 million yen or less means the spousal deduction

Applies where the spouse claiming the deduction has total income of 9 million yen or less. Childcare leave benefit, maternity allowance and the lump-sum childbirth allowance are tax-free, so they are not included in the salary income above. Sources: NTA No.1191 and No.1195[NTA No.1195]

For example, if you earned 250,000 yen a month and went on maternity leave in April, the 750,000 yen you were paid from January to March is your salary income for that year. However much maternity allowance or childcare leave benefit you received while on leave, none of it counts as income, so you qualify for the spousal deduction.

Why the benefits do not count as income

The NTA explains that childcare leave benefit is an unemployment-type benefit under the Employment Insurance Act and is therefore not taxable under Article 12 of that Act, while maternity allowance is not taxable under Article 62 of the Health Insurance Act, so neither is included in the total income figure used to test the spousal deduction[NTA No.1191 Q&A]. The lump-sum childbirth allowance (500,000 yen) is likewise tax-free.

The second row from the bottom is the one to watch. A top-up allowance paid by your employer is salary, so it is taxable, and depending on the amount it can push you out of the spousal deduction. For the amounts of each benefit and how they are paid, see the guide to money you can receive for childbirth and childcare.

Your own year-end adjustment: your employer still does it, and tax comes back

You remain on your employer's books during maternity and childcare leave, so your workplace runs your year-end adjustment. You are covered even if you did not work in December. Because the income tax withheld from your pre-leave salary assumed that the same salary would continue for a full year, in a year when your income drops you have almost always overpaid and are due a refund.

The forms you give your employer for the year-end adjustment are the usual ones. Submit your own "declaration of dependants" (and enter your child there if the child is to be your dependant), and enter your own income on the "declaration of the basic deduction and the spousal deduction". Do not forget the certificates for the life insurance premium deduction and the earthquake insurance premium deduction. You can still use those deductions even in a year with little salary. For the full set of forms, see the year-end adjustment guide for company employees.

Social insurance premiums are waived: the deduction falls to zero, but your pension does not

During pre- and post-natal leave and childcare leave (until the child turns three), health insurance and employees' pension premiums are waived for both you and your employer[Japan Pension Service]. Waived months are treated as months in which premiums were paid, so your future pension is not reduced.

• The "social insurance premium deduction" in the year-end adjustment is the total of the premiums actually withheld from your salary. Nothing is withheld while you are on leave, so the deduction for that period is zero. This does not mean more tax because of a missing deduction; you simply did not pay the premiums.
• Since October 2022, even if you are not on leave at the end of the month, taking 14 days or more of childcare leave within the same month waives that month's premiums. Premiums on bonuses are waived only where the leave runs for more than one month.
• If your salary is lower for the three months after you return, filing the "special provision for the standard monthly remuneration during a child-rearing period" means your premiums are calculated on the lower salary while your pension is calculated on the original salary. The form goes to the pension office via your employer, so ask HR about it when you return.

For the details of the waiver, see the guide to money you can receive for childbirth and childcare, and for which parent should claim the child, see which parent should claim the child as a dependant.

Your spouse's year-end adjustment: enter your estimated income on his form

The spousal deduction and the special spousal deduction are claimed in the year-end adjustment of the person receiving the deduction (the husband), by entering the wife's estimated income on the "declaration of the basic deduction, the spousal deduction and the income adjustment deduction". What you enter is "income", that is, salary income minus the employment income deduction, not the salary figure itself.

If you missed your husband's year-end adjustment, or the estimate of the wife's income was wrong, the husband can put it right by filing a tax return the following year. For the conditions of the spousal deduction, see the guide to the spousal deduction.

Next year's residence tax is based on "last year's salary"

Residence tax is levied from June of the following year on the previous year's income. If you worked full-time in the year before you went on maternity leave, the bill based on that salary arrives from June of the following year, while you are on childcare leave. It cannot be deducted from your pay, so either your employer fronts the money during your leave and settles up later, or you switch to ordinary collection (payment slips). Checking with your employer means you will not be surprised by a large payment slip.

Conversely, in the year after a year with little salary because of childcare leave, your residence tax is close to zero. That year you come close to being "exempt from residence tax", which can matter for nursery fee brackets and for eligibility for various benefits. For the one-year lag in residence tax, see how residence tax works and how it is calculated.

Summary

• Childcare leave benefits, maternity allowance, and the childbirth lump-sum grant are all tax-exempt and are not counted when determining eligibility for the spousal deduction.
• If annual salary income for the year is 1.36 million yen or below, the spousal deduction is 380,000 yen; at 1.69 million yen or below, the special spousal deduction is also 380,000 yen.
• The company still performs the year-end adjustment even while on leave, and it is normal for income tax withheld from pre-leave salary to be refunded.
• Health insurance and employees' pension premiums are waived during maternity and childcare leave, and this does not reduce the future pension amount.
• Resident tax based on the previous year's salary starts from June of the following year. Since it cannot be withheld from leave pay, check with your company about how to settle it.

Reference links (sources)

This article is based on the following materials. The deduction amounts follow the tax rules for 2025 and later years.

• NTA No.1191 Spousal deduction (total income of 620,000 yen or less, salary of 1.36 million yen or less, from the 2026 (Reiwa 8) tax year; 580,000 / 1.23 million yen for 2025)
• NTA No.1195 Special spousal deduction (deduction amounts for a spouse with income over 620,000 yen up to 1.33 million yen; over 580,000 yen for the 2025 tax year)
• NTA No.1191 Spousal deduction Q&A (childcare leave benefit and maternity allowance are not included in total income)
• Japan Pension Service: waiver of employees' pension premiums (pre- and post-natal leave and childcare leave periods)
• Japan Pension Service: waiver of premiums during childcare leave

This article is general information, not tax advice. The calculations are approximate and change depending on dependants and other deductions. For your own situation, check with your employer, your tax office or a tax accountant.