Freeway Payroll Software Adds Year-End Adjustment Feature for 2023 Tax Year

Freeway Payroll Software Introduces Major Updates for 2023

In a significant update, Freeway Japan Inc. has announced the launch of new functionality in its cloud-based payroll service, Freeway Payroll, to support the year-end adjustments for the 2023 tax year. This update is set to be released on the night of November 18, 2023, and is part of the company’s commitment to providing zero-cost solutions for its users.

Understanding Freeway Payroll

Freeway Payroll is a comprehensive payroll software solution that automates the calculations for income tax, resident tax, and social insurance premiums, ensuring accurate and efficient payroll processing based on attendance and salary data. It is also designed to handle year-end adjustments and generate withholding tax slips. Notably, the service is available for free for up to five users, making it an excellent choice for small businesses and self-employed individuals seeking efficient payroll management.

Key Tax Reforms for 2023

The year-end adjustments for 2023 will be impacted by several significant tax reforms, including an increase in the basic deduction, adjustments to the minimum salary deduction, the introduction of a new special deduction for certain dependents, and changes to income requirements for dependents. These reforms will alter the calculation and procedures for year-end adjustments, necessitating proactive preparation and action from payroll administrators. Here are the main points of the reforms:

- Increase in Basic Deduction: The basic deduction will rise from the previous 480,000 yen to between 580,000 yen and 950,000 yen, depending on the total income amount.

- Minimum Salary Deduction Raised: The minimum salary deduction will increase from 550,000 yen to 650,000 yen.

- Introduction of Special Dependent Deduction: A new special deduction for dependents aged between 19 and 23, with income between 580,000 and 1,230,000 yen, will allow for a maximum deduction of 630,000 yen.

- Changes to Income Requirements for Dependents: The income requirement for dependents will expand from below 480,000 yen to below 580,000 yen, which is further adjusted for cases where only salary income is involved—from below 1,030,000 yen to below 1,230,000 yen.

Planned Enhancements for Freeway Payroll

To align with these reforms, Freeway Payroll will introduce several functional improvements and report adjustments, which include:

- Input Screen Enhancements: The system will adapt to changes in dependent income requirements, automated judgments for special dependents, and modifications to the basic deduction amounts.

- Documentation Update: The software will support various forms such as the 2023 Basic Deduction Declaration alongside Partner Deduction Declaration, Special Dependent Deduction Declaration, and Income Adjustment Deduction Declaration forms for both the 2023 and 2024 tax years.

- Calculation Enhancements: The logic concerning deduction amounts, income requirements, and special dependent deductions in documents like the withholding tax books and statements will be updated.

- Data Input Systems: Both employee and administrator-focused input and confirmation screens will be made available to facilitate the year-end adjustment data entry process.

Cost-Free Compliance with Tax Reforms

One of the standout features of Freeway Payroll is its commitment to providing its users with high-value solutions at no additional cost. The service remains free for up to five employees, and for firms with more than five employees, a flat monthly fee of 1,980 yen (tax included) applies, allowing unlimited users. The enhancements associated with the major tax reforms will be available without any extra charges within this monthly fee, relieving payroll personnel of concerns regarding system update costs associated with annual tax reform changes. This ensures that payroll administrators can confidently manage the year-end procedures without the stress of hidden fees.

About Freeway Payroll

Freeway Payroll stands out as an innovative payroll solution that is free for up to five users indefinitely, while providing exceptional value for larger companies with its monthly subscription model. As of October 2025, the software boasts approximately 132,000 users.

Explore Freeway Payroll

About Freeway Japan Inc.

Founded on the belief that supporting small businesses can invigorate Japan’s economy, Freeway Japan specializes in providing cloud-based services that assist with back-office tasks such as accounting, payroll management, and attendance tracking. Through a commitment to their users, they offer a “permanently free” model tailored for entrepreneurs and freelancers.