The 退職所得控除 for your years of service, and the tax left on your 退職金
Estimates only, not financial advice. What you type stays on your device. Checked against sources on 16 Oct 2026.The 退職所得控除 is 400,000 yen for each year of service up to 20 years, never less than 800,000 yen, and 700,000 yen for each year after 20, with a part year counted as a whole one. An allowance at or below it is tax free. Above it, half the excess is taxed for most employees, apart from your salary. Enter your service to see the deduction and the tax on the rest.
The amount before tax. The figure is the National Tax Agency’s own example, to replace.
A part year counts as a whole one: 10 years 2 months is 11 years.
¥7,728,110
3.4% of the allowance goes in tax, over 11 years of serviceTaxed apart from your salary (分離課税). Not included: officer and employee service mixed, another retirement allowance in the same year or within the last four years, and local differences in resident tax.
National Tax Agency No.1420, 2732 and 2260, and Minato City’s resident tax method, checked 16 Oct 2026. An estimate, not tax advice.
| Item | Amount |
|---|---|
| Retirement allowance | ¥8,000,000 |
| 退職所得控除 (deduction) | ¥4,400,000 |
| Taxable retirement income (1,000 yen dropped) | ¥1,800,000 |
| Income tax and reconstruction surtax | ¥91,890 |
| Municipal tax, 6% | ¥108,000 |
| Prefectural tax, 4% | ¥72,000 |
| Total tax | ¥271,890 |
| You keep | ¥7,728,110 |
2026 · Rates and rules read from the sources listed on this page (the earliest on 16 Oct 2026); they may have changed since.
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A retirement allowance (退職金) in Japan is taxed on its own, apart from your salary (分離課税), and far more lightly. The calculator follows the National Tax Agency's method and shows each step.
3. Taxable retirement income. Normally half of what is left after the deduction, rounded down to 1,000 yen. Two exceptions: a company officer with 5 years or less of officer service is taxed on the whole amount, and an employee with 5 years or less of service keeps the half only on the first 3,000,000 yen.
Not included. Service split between officer and employee periods, an earlier retirement allowance in the same year or the last four years, and local variations. Compare with your salary's tax on the Japan Income Tax Calculator. An estimate, not tax advice.
The rest of the article, and all 6 questions about Japan Retirement Allowance Tax Calculator (退職金 税金), are on the Japan Retirement Allowance Tax Calculator (退職金 税金) page.
Subtract the 退職所得控除 for your years of service, halve what is left and round it down to 1,000 yen. Income tax is the normal rate table on that amount times 102.1%; resident tax is 10% of it. On 8,000,000 yen after 10 years 2 months, that is 91,890 yen income tax and 180,000 yen resident tax.
Up to the 退職所得控除 it is. For 20 years of service that is 8,000,000 yen, for 30 years 15,000,000 yen, and for 38 years 20,600,000 yen. Only the part above it is taxed, and usually only half of that part.
For an employee with 5 years of service or less, only the first 3,000,000 yen above the deduction is halved; the rest is taxed in full. For a company officer with 5 years or less of officer service, nothing is halved.
Yes, 10% of the taxable retirement income: 6% municipal and 4% prefectural, each rounded down to 100 yen, withheld by the employer when the allowance is paid. The calculator shows both parts of the resident tax and the total you keep.
Rates and rules change; check the source before you rely on a figure.
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