The law requires 30 days’ notice or pay in lieu for the shortfall.
Negotiated exits in Japan commonly run three to six months; more for long service or senior roles.
Pay in lieu of notice uses average daily pay (annual pay over 365 days). Leave is paid at monthly salary over the working days entered. The package and any retirement allowance are treated as retirement income (退職所得), with the standard deduction by years of service and the half-rate, including the limit for five years’ service or less; the rule for company officers is not modelled. Pay in lieu and the leave payout are salary for tax; social insurance is charged on garden-leave salary only. Not included: legal fees, the cost of a replacement hire, or any claim if the exit is contested. Tax tables from the National Tax Agency; insurance rates from Kyokai Kenpo, the Japan Pension Service and MHLW.