Public pensions (old-age pensions) are taxable as "miscellaneous income" under tax law. But the deductions are large. For Reiwa 8 (2026), no income tax is charged up to ¥2.14 million of pension income at 65 and over, or ¥1.64 million under 65. That is because the basic deduction rose from ¥580,000 to ¥1.04 million. Any tax over-withheld is settled in a lump at the December 2026 pension payment and refunded. And if pension income is ¥4 million or less and other income is ¥200,000 or less, no tax return is needed. Start by checking your own pension amount on your withholding slip.
Public pensions are taxed as "miscellaneous income"
Public pensions such as the old-age basic pension and the old-age employees' pension are, under tax law, subject to income tax and residence tax as "miscellaneous income relating to public pensions and the like"[National Tax Agency No.1600]. On the other hand, disability pensions and survivors' pensions are tax-exempt and are not taxed[National Tax Agency No.1605].
Tax is charged on what remains after further subtracting the basic deduction, spousal deduction, social insurance premium deduction, medical expense deduction, and the like from this miscellaneous income.
The public pension deduction (it changes at age 65)
The public pension deduction is determined by age and pension income, and it is more generous for those aged 65 and over (minimum amount where income other than pensions is ¥10 million or less).
| Age | Minimum public pension deduction | Miscellaneous income is zero up to (guide) |
|---|---|---|
| Under 65 | ¥600,000 | Up to ¥600,000 of pension income |
| 65 and over | ¥1.1 million | Up to ¥1.1 million of pension income |
As income rises, the deduction also increases in stages. In addition, the basic deduction that everyone can use rose to ¥1.04 million for Reiwa 8 (2026)[National Tax Agency No.1199]. It applies to people whose total income is ¥4.89 million or less, and it takes effect on December 1, 2026[Ministry of Finance, Reiwa 8 tax reform outline]. How long the ¥1.04 million lasts is set out in the ¥1.04 million basic deduction runs through the 2027 tax year.
As a result, someone aged 65 or over living on a pension alone pays no income tax up to ¥2.14 million of pension income (¥1.1 million + ¥1.04 million). Under 65, the line is ¥1.64 million. The National Tax Agency gives these same two figures as "the amount of public pensions and the like not subject to withholding"[National Tax Agency, April 2026 outline of withholding tax revisions].
Taxable income = ¥700,000 − basic deduction ¥1.04 million = ¥0 (already zero before the social insurance premium deduction)
The estimate is our own. The public pension deduction follows National Tax Agency No.1600 and the ¥1.04 million basic deduction follows National Tax Agency No.1199. Residence tax is calculated separately.
Income tax withheld along the way is settled in a lump for the whole year at the December 2026 pension payment. If too much was withheld, the pension payer refunds it there and then. The recipient does not have to apply for this[National Tax Agency, Reiwa 8 tax reform Q&A Q5-1]. If there is no pension payment in December and no settlement takes place, you recover the tax by filing a return[National Tax Agency, Reiwa 8 tax reform Q&A Q7-1].
Residence tax is a different story. The basic deduction for residence tax stays at ¥430,000 and was not raised this time[Ministry of Finance, Reiwa 8 tax reform outline]. So a gap appears: income tax is zero, yet residence tax is still charged. You can check take-home pay after both tax and insurance premiums in tax and insurance premiums for people living on a pension alone.
Do you need to file? The "filing-exemption for pensioners"
People who meet both of the following do not need to file an income tax return.
① The total amount of public pension income is ¥4 million or less (and subject to withholding)
② Income other than miscellaneous income relating to public pensions and the like is ¥200,000 or less
The filing-exemption is only about "you don't have to." In cases like the following, filing may get you a refund.
・You want to use the medical expense deduction, the life insurance premium deduction, or the earthquake insurance premium deduction
・You did Furusato Nozei
・A dependent family member increased during the year, etc.
* Also note that even when a tax return is not required, a residence tax declaration may still be necessary.
Withholding from pensions and the "Declaration of Dependents, etc."
Income tax is withheld from pensions above a certain amount. This is widely misunderstood: even if you do not submit the "Declaration of Dependents, etc." sent by the Japan Pension Service, the rate stays at 5.105%[Japan Pension Service pension Q&A]. What changes is whether deductions such as the spousal deduction or the disability deduction can be subtracted. Deductions you missed can be recovered by filing a tax return (see when the Declaration of Dependents, etc. arrives).
Long-term care insurance premiums, National Health Insurance premiums, and the medical insurance premiums for those in the late-stage elderly system are also deducted at source from pensions.
When you receive a pension while working
For those who receive a pension while earning a salary, both employment income and the miscellaneous income from the pension are taxable. If income other than pensions exceeds ¥200,000, a tax return becomes necessary. Note that iDeCo and lump-sum retirement allowances fall under retirement income and a separate calculation, and adjusting the timing of receipt is the key point (see Tax on retirement allowances and iDeCo).
FAQ
Is a pension taxed?
Old-age pensions are taxable as miscellaneous income, but because there is the public pension deduction (a minimum of ¥1.1 million for those aged 65 and over) and the ¥1.04 million basic deduction, for Reiwa 8 no income tax is charged up to ¥2.14 million of pension income at 65 and over, or ¥1.64 million under 65. Disability pensions and survivors' pensions are tax-exempt.
Does a pension recipient need to file a tax return?
If public pension income is ¥4 million or less and income other than pensions is ¥200,000 or less, no tax return is required. However, if you want a refund through the medical expense deduction or Furusato Nozei, filing is advantageous.
Even if a tax return is not required, is a residence tax declaration needed?
In cases such as wanting to reflect income deductions, a residence tax declaration may be necessary. Please check with the municipality where you live.
What about tax if I receive a pension while working?
Both employment income and the miscellaneous income from the pension are taxable. If income other than pensions exceeds ¥200,000, a tax return becomes necessary.
Summary
Reference links (sources)
This article is based on materials from the following public bodies (neutral, primary sources). Since deduction amounts and requirements are revised, please check the latest content before filing.
- National Tax Agency No.1600 Taxation relating to public pensions and the like (in Japanese)
- National Tax Agency No.1605 Are survivors' pensions and disability pensions taxed? (in Japanese)
- National Tax Agency The elderly and tax (pensions and tax) (in Japanese)
- National Tax Agency No.1199 Basic deduction (¥1.04 million for Reiwa 8) (in Japanese)
- National Tax Agency April 2026 outline of withholding tax revisions (pensions not subject to withholding: ¥2.14 million / ¥1.64 million) (in Japanese)
- National Tax Agency Reiwa 8 tax reform Q&A on the basic deduction (settlement and refund at the December 2026 payment) (in Japanese)
- Ministry of Finance Outline of the Reiwa 8 tax reform (added basic deduction; residence tax unchanged) (in Japanese)
- Japan Pension Service Q&A: what happens if you do not submit the Declaration of Dependents, etc. (in Japanese)
- Japan Pension Service Withholding from pensions and the Declaration of Dependents, etc. (in Japanese)
* This article is general information, not tax advice. For individual decisions, please confirm with a tax office or a tax accountant.
