In this section, special processing of retirement liquidation and retirement allowance for non-resident employee are described

Retirement Liquidation Function for Non-Resident Employee

Performed as the normal retirement liquidation (needles to say, the overseas payment is used as the monthly salary)

Retirement Allowance Calculation Function for Non-Resident Employee

Income Tax

For retirement allowance, there are two way of processing retirement allowance in terms of income tax calculation.


For the case of becoming a resident again, retirement allowance tax calculation is no different from that of regular employee. Thus no special function nor operation is necessary.

For the case of remaining as a non-resident, allowance amount has to be divided proportionally for resident service period and non-resident service period. And the retirement allowance amount which is for resident period is regarded as taxable domestic income. Then domestic income tax is calculated by applying a 20% tax rate to this amount.

This income tax calculation is done automatically by checking an employee’s residence status in Infotype 0145 Income Tax.