Three key financial aspects after discharge: one-time separation pay, military service counting toward work seniority, and tax deductions for self-employed veterans

Cost: There are no direct costs involved. Upon discharge, the military transfers your social insurance records and payments to you, and you then register these with the local social insurance office.

In plain terms: After leaving the military, three main financial factors matter. First, there is a one-time separation payment for veterans who choose to work independently; the amount depends on how many years you served, with additional bonuses for those who earned commendations. Second, your military service years count toward your overall work seniority, allowing them to be combined with any pre- or post-discharge work history for social insurance purposes. Third, if you start your own business, you may qualify for tax deductions of up to 20,000 yuan per year for three years.

Benefit: The first benefit is outlined in the Regulations on the Resettlement of Veterans: “Veterans who choose to work independently receive a one-time separation payment based on their years of service.” This payment is funded by the central government, with specific amounts determined by relevant authorities and adjusted periodically. Additional bonuses are provided in five tiers: 25% for recipients of medals or honorary titles, 20% for those with first-class combat achievements or first-level commendations, 15% for second-class combat achievements or first-level commendations, 10% for third-class combat achievements or second-level commendations, and 5% for fourth-class combat achievements or third-level commendations. The regulations also state that veterans who do not find employment immediately may claim unemployment benefits, with their military service years counted toward insurance contributions, except for those placed in retirement or supported through other programs. The second benefit comes from the Veterans Protection Law: “Military service years are counted toward overall work seniority, which is then combined with any subsequent work history.” This seniority is also factored into pension, medical, and unemployment insurance calculations, and veterans’ service is recognized as equivalent to grassroots work experience under the Military Insurance Law. Finally, a 2023 joint announcement by the Ministry of Finance, State Taxation Administration, and Veterans Affairs Ministry allows self-employed veterans to deduct up to 20,000 yuan per year from their taxes for three years, with a possible 20% increase; this amount is subtracted from the total tax owed rather than provided as a cash payment. Employers hiring veterans may also receive a deduction of up to 6,000 yuan per employee per year, with a 50% increase possible. These provisions are effective from January 1, 2023, through December 31, 2027. It is important to note that this tax benefit is separate from any local “one-time economic subsidies” provided by individual regions, which are determined independently and may vary widely.

Evidence grade: A

Sources:国务院、中央军委 (2024). 退役军人安置条例（国务院、中央军委令第 787 号，第二十一、二十二、七十四、八十一、八十五条）. https://www.gov.cn/gongbao/2024/issue_11526/202408/content_6969192.html；退役军人事务部 (2020). 关于一次性退役金的十个问题（转载《中国退役军人》2020 年第 10 期）：「基本标准。士兵服现役每满一年，发给4500元」「退役金标准适时调整」. https://www.mva.gov.cn/sy/zzxc/202011/t20201113_43153.html；贵州省退役军人事务厅 (2024). 一次性退役金增发，重要变化！：「现在执行的标准是：士兵服现役每满一年，发给4500元」. http://tyjrswt.guizhou.gov.cn/zfxxgk/fdzdgknr/zdlyxx_5621158/tyaz_5621161/202408/t20240809_85367194.html；烟台市牟平区人民政府 (2025). 答复中引《烟台市退役军人事务局、烟台市财政局关于调整自主就业退役士兵一次性经济补助标准的通知》：「2024年退出现役的每服役一年补助6000元」. https://www.muping.gov.cn/art/2025/11/10/art_105032_2960250.html；全国人大常委会 (2020). 退役军人保障法（第四十二、四十四、五十条）. http://www.mod.gov.cn/gfbw/fgwx/flfg/16048597.html（国防部刊登）；全国人大常委会 (2012). 军人保险法（第十六、二十三条）. https://flk.npc.gov.cn/detail?id=2c909fdd678bf17901678bf73e160645（国家法律法规数据库）；财政部、税务总局、退役军人事务部 (2023). 关于进一步扶持自主就业退役士兵创业就业有关税收政策的公告（2023 年第 14 号）. https://www.gov.cn/zhengce/zhengceku/202308/content_6896456.htm

Notes: The regulations specify that exact payment amounts will be set by relevant authorities, though an official figure of 4,500 yuan per service year was cited in a 2020 Ministry of Veterans Affairs statement that also noted future adjustments. This figure no longer aligns with current regulations, which must be followed instead. As of August 2024, Guizhou Province’s Veterans Affairs Department continues to reference the 4,500 yuan figure, though no official nationwide standard has been published. Additionally, families of conscripts receive a separate preferential allowance during service, the amount of which is determined locally with some central funding support. The tax deduction described applies only to eligible self-employed veterans and may not be fully utilized if their actual tax liability is lower. A newer regulation effective August 1, 2026, further expands benefits by recognizing professional certifications earned during service as valid nationwide. 〔36〕