Summary of how fixed tax reductions are processed

In accordance with the 2024 tax reform, the following fixed tax reductions income tax and inhabitant tax reductions will be implemented for salaries and bonuses paid in June 2024.
The details of the fixed tax reductions(定額減税) and who is eligible for it are as follows.

■Reduction of income tax
■Reduction of inhabitant tax

Reference:

 

■Reduction of income tax

・The following amounts will be reduced from the original income tax amount for salaries and bonuses paid in June 2024, and any amount not reduced will be carried over to the following month's salaries and bonuses.

・Eligible employees (tax category Kou) and their tax dependents as June 1, 2024.
(Spouse who is not eligible for monthly tax support because the employee's own income exceeds 9 million; If the spouse's expected income during 2024 is less than 480,000 yen and the spouse resides in Japan, he/she is eligible for the the fixed tax reductions.  Added on May 13, 2024)

・Non-resident employees or their dependents are not eligible for the tax reduction.

・The amount of income tax reduction is 30,000 yen per eligible person.

・For employees hire on or after June 2, 2024, the tax amount will be adjusted in the year end tax adjustment.

・The national tax agency has issued a notice (updated Q&A dated April 11, 2024) that monthly tax reductions will be implemented for June 2024 salaries, etc., even for those who already have a definite salary income in excess of 20 million yen or income of 18.05 million yen as of June 1, 2024.
In principle, the monthly tax reduction will be applied to all employees enrolled as of June 1, 2024, who are residents and whose taxable income is included in the “Kou” category.

 

<What to do with Workcloud>

As described in “How to verify and register your spouse who is a member of the same household.”, all employees who have a spouse need to determine on Workcloud whether they are eligible for the fixed tax reductions.
Only those who need to register for determination will see an information banner at the top of the Worcloud screen after Wednesday, May 8, 2024, so please complete the entry by May 31, 2024.
This service is also available to customers who are not using the ESS request function.

 

■Reduction of inhabitant tax

・The eligible employees are enrolled individuals whose total income in 2023 is 18.05 million yen or less (20 million yen for salary income only) and their tax dependents.

・Non-resident employees and tax dependents are not eligible for the tax reduction.

・The amount of inhabitant tax reduction is 10,000 yen per person.

・For employees under special collection of the tax, the inhabitant tax amount will not be deducted from June 2024 but be split into 11 installments and be deducted through salary during the period July 2024 – May 2025. The arrangement is applicable only for this year.

 

<Regarding the “Municipal tax to be deducted” notification for individual employees>
As in previous years, the major Administrative Agencies and the Ministry of Internal Affairs and Communications have informed us that the notices are scheduled to be sent out in the latter half of May.
Those who are eligible for the fixed tax reductions and whose special tax collection is scheduled to start in July are also expected to receive their notices in May.
(For those who are not eligible for the fixed tax reductions, the special resident tax collection will begin in June as in previous years.)

 

Click here for the Japanese version of this manual.
2024年 定額減税の実施概要

For more information on “How to verify and register your spouse who is a member of the same household.”, please click here.
How to verify and register your spouse who is a member of the same household

If you have any questions related to the fixed tax reduction, please contact and discuss with our payroll operators  through your company's HR.

 

 

Reference:

Guide for Flat-amount Cut of Personal Income Tax for FY2024
Pertaining to Withholding Tax System for Salaries, etc (Added on May 16, 2024)
https://www.nta.go.jp/publication/pamph/gensen/teigakugenzei/136.pdf

National tax agency – About fixed tax reduction (Japanese only)
https://www.nta.go.jp/users/gensen/teigakugenzei/index.htm

National tax agency – How to reduce income tax for 2024 by the fixed tax reduction (Japanese only)
https://www.nta.go.jp/publication/pamph/gensen/0023012-317.pdf

National tax agency – Q&A on the 2024 income tax for the fixed tax reduction (Japanese only)
https://www.nta.go.jp/publication/pamph/gensen/0024001-021.pdf

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