Retirement income is a lump sum payment received from each system such as retirement allowance, lump sum retirement allowance, temporary pension, social insurance or mutual aid.
Tax calculation of retirement income is calculated by applying the income tax rate table with separate taxation without adding to the amount of retirement income amount = (income amount – retirement income deduction amount) × 1/2 with other income
Please be aware that if you receive retirement income by pension it will become miscellaneous income and in the case of death retirement you will be subject to inheritance tax
Tax rate table for retirement income
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Tax calculation of retirement income
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| {(Revenue amount of retirement allowance etc. – Retirement income deduction) × 1/2} × Tax rate |
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Retirement Income Deduction Amount
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Length of service
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Retirement Income Deduction Amount
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20 years less
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400,000 yen × years of service (minimum amount 800,000 yen)
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Over 20 years
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700,000 yen × (length of service years – 20 years) + 8 million yen
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(note)
- Fractions of less than one year of service years will be rounded up
- If the calculated amount is less than 800,000 yen (less than 2 years of service), it will be 800,000 yen
- If you retire directly due to becoming a disabled person will add 1 million yen