What is retirement income in Japan
In the case you receive lump sum payment because of retirement of your job, such payment is included in retirement income. If you receive lump sum payment of pension ）, such payment is included in retirement income.
Calculation of taxable amount of retirement income
Amount of retirement payment (before withholding)- retirement income deduction × 1/2
Calculation of retirement income deduction
In the case, duration of service of 20 years or less
400,000×duration of service ( at least 800000 yen)
In the case, duration of service is more than 20 years
400,000×20 years + 700,000 yen – ( duration of service – 20 years ).
However, in the case you are officer (including deemed officers) and duration of service is 5 years or less ( specified officer, you can not apply for “× 1/2“.
Some persons have incorporated a company and assumed director and resigned its position and received retirement salary several times in order to reduce income come. So, authority has taken necessary measures.
Retirement income is separate taxation⛄