What happens if you fail to submit the Declaration of Retirement Income?

Without the declaration form submitted to your employer, a flat 20.42% withholding tax is withheld on the entire severance payout, requiring an individual tax return to claim refunds.

How are partial years of service rounded for the deduction?

Any partial year of employment is rounded up to a full year. For instance, 15 years and 2 months of service counts as 16 complete years for tax deduction purposes.

JapanUpdated for 2026Finance

Japan Severance & Retirement Allowance Tax Calculator 2026

Calculate your net lump-sum retirement payout in Japan after applying statutory retirement tax deductions (400k/yr up to 20 years, 700k/yr over 20 years) and the favorable 50% taxable rate.

End of Service Gratuity Retirement & Pensions Income Tax & Brackets

Calculated Result

Net Retirement Payout

¥14,735,663

Retirement Tax Deduction

¥11,500,000

Calculator Inputs

Gross Retirement Severance Payout

Quick select:

Years of Continuous Service

Quick select:

Retirement Due to Disability (+1M JPY Deduction)

Net Retirement Payout

¥14,735,663

Retirement Tax Deduction

¥11,500,000

Total Taxes Withheld

¥264,337

Effective Tax Rate

1.76%

Taxable Base (After 50% Rule)

¥1,750,000

Income Tax (incl. Surtax)

¥89,337

Resident Tax (10%)

¥175,000

Net Payout vs Tax Withheld

Net Retirement Payout

¥14,735,663(98%)

Total Taxes Withheld

¥264,337(2%)

Applies statutory separate taxation assuming submission of the Declaration of Retirement Income. Does not reflect short-term corporate director rules (5 years or less).

This calculator is a mathematical model for general financial estimation, planning, and educational guidance. Results depend on your inputs and standard formulas, and do not constitute binding financial, tax, or investment advice. Always consult a qualified professional before making financial decisions.

Official Statute: 所得税法第30条 (退職所得) 及び租税特別措置法 (退職所得控除額の算定基準)Last Verified: 2026-09-03

Calculation Methodology

Taxable Retirement Income = (Retirement Payout - Retirement Deduction) × 1/2. Deduction: 400,000 yen/yr (<=20 yrs) or 8M + 700,000 yen × (yrs - 20).

Frequently Asked Questions

To protect retirement savings, Japan applies a generous statutory deduction based on service years, taxes the remaining balance at 50%, and assesses it separately from regular salary.

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Japan Severance & Retirement Allowance Tax Calculator 2026

Calculator Inputs

Net Payout vs Tax Withheld

Calculation Methodology

Frequently Asked Questions

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