Nagamine & Mishima Accounting Office

Accounting practice since 1989

  • English
  • 日本語 (Japanese)
  • About
    • Message from the Managing Partner
    • Leadership
    • Advantage
  • Services
    • Startup Support
    • Expansion Support
    • Crisis Support
    • Cloud Support
  • Resources
    • Seminars
    • Newsletters
    • Monthly Checklists
    • Japanese Business Guide
  • Blog
  • Clients
  • Contact

Accrued Severance

Accrued Severance

Severance pay is only deductible at the point of payment for calculating taxable income. Even if employment contracts or other company policy states a formula for severance pay making accruals possible, the timing a company can claim as tax deductible is at the time of payment. Accrued expense in general is accepted, but timing for payroll payment is predominately cash basis.

Of course you can accrual severance pay for your financial statements, but be sure not to forget to make adjustments when adjusting taxable income. In the corporate tax return, there is a document which will show the adjusting figures up to date. Confirming balance outstanding every year for historical adjustment is advised.

Blog Categories

  • Blog
  • Facts about Tax
  • Newsletter

Need support for your business in Japan?


With over 25 years experience, our team is here to help. Fill out our simple contact form and we will be in touch very shortly.

People are Talking

  • “Nagamine was instrumental in setting up our first Japanese entity in 2008, allowing us to hit the ground running when we arrived.

    Since then they have been crucial in the smooth running of our business. We use them to organize our bookkeeping, payroll and social insurance, tax reports and returns.

    Their bilingual staff are a pleasure to deal with and are always going above and beyond their usual tasks when we need extra help. We find them extremely reliable and we look forward to working with them into the future.”

    Meltwater News Japan, Meltwater group

    Meltwater News Japan