The Atarashift Blog
Insights for working in Japan
Guides, interviews, and honest advice for international talent building a career in Japan.
The Atarashift Blog
Guides, interviews, and honest advice for international talent building a career in Japan.
Shakai hoken takes about 15% of your gross pay in Japan. Here is exactly what each deduction buys, and what happens to your pension when you leave.
Shakai hoken (社会保険) is Japan's bundled employee social insurance system. It covers health insurance, pension, and nursing care. Enrollment is mandatory for anyone working full-time at a Japanese company, regardless of nationality. Expect roughly 15% of your gross salary to disappear into it each month, with your employer paying a matching amount on top.
That deduction is the single biggest reason your first Japanese payslip looks smaller than the offer letter. This guide breaks down each line, using the rates in force for fiscal 2026.
Japanese payroll bundles five separate insurance programmes. Strictly speaking, only the first three are shakai hoken. The last two are rodo hoken (労働保険). In everyday use, "shakai hoken" covers the whole package.
| Programme | Japanese | What it covers |
|---|---|---|
| Health insurance | 健康保険 (kenko hoken) | Medical, dental, prescriptions, sick pay |
| Employees' pension | 厚生年金 (kosei nenkin) | Retirement, disability, survivor benefits |
| Nursing care insurance | 介護保険 (kaigo hoken) | Long-term care, charged only from age 40 |
| Employment insurance | 雇用保険 (koyo hoken) | Unemployment benefit, parental leave pay |
| Workers' compensation | 労災保険 (rosai hoken) | Work injury, paid entirely by your employer |
Most companies enrol you through Kyokai Kenpo (協会けんぽ), the national association for small and mid-sized employers. Larger firms often run their own health insurance society (kenpo kumiai). Those set slightly different rates and sometimes add perks like subsidised gym access or resort accommodation.
Rates are set as a percentage of your standard monthly remuneration (標準報酬月額), not your literal salary. Payroll averages your April, May, and June pay. That figure snaps to the nearest grade in an official table. The grade then applies from September until the following August.
Here is what fiscal 2026 looks like for an employee in Tokyo, under 40, with a standard monthly remuneration of ¥300,000.
| Deduction | Total rate | Your share | Monthly cost |
|---|---|---|---|
| Health insurance (Tokyo) | 9.85% | 4.925% | ¥14,775 |
| Child-rearing support levy | 0.23% | 0.115% | ¥345 |
| Employees' pension | 18.30% | 9.15% | ¥27,450 |
| Employment insurance | 1.35% | 0.50% | ¥1,500 |
| Total | 14.69% | ¥44,070 |
Sources: Kyokai Kenpo FY2026 prefectural rates, Japan Pension Service premium table, MHLW employment insurance rates for FY2026.
Three details worth knowing:
Health insurance rates vary by prefecture. Tokyo sits at 9.85% for fiscal 2026, but Osaka charges 10.13%, Fukuoka 10.11%, and Hokkaido 10.28%. The national average is 9.90%. Your rate follows your employer's registered location, not where you live.
A new levy started in April 2026. The child-rearing support contribution (子ども・子育て支援金) adds a flat 0.23% nationwide, split evenly between you and your employer. It funds Japan's expanded child allowance. At ¥300,000 it costs you ¥345 a month, so it is small, but it is new, and it is why your April payslip changed.
Employment insurance is calculated differently. It applies to your actual gross pay each month, including overtime and bonuses, rather than your standard monthly remuneration grade. The good news is the rate dropped in April 2026, from 1.45% to 1.35% overall, taking the employee share from 0.55% to 0.50%.
If you are 40 or older, add nursing care insurance at 1.62% total, or 0.81% for you. That pushes the ¥300,000 example to ¥46,500 a month, or 15.5% of gross.
Your employer matches you on health insurance, pension, nursing care, and the new levy. It also pays a larger slice of employment insurance (0.85%) plus workers' compensation entirely on its own. On that same ¥300,000 salary, the company contributes roughly ¥45,900 a month.
This matters when you negotiate. A Japanese employer thinks in terms of total cost, which is close to 1.15 times your gross salary. Understanding that number helps you read the room during salary negotiation in Japan.
Bonuses are also subject to shakai hoken, at the same percentages. A ¥600,000 summer bonus loses roughly ¥85,000 before income tax. If your offer leans heavily on bonuses, read our breakdown of Japan's twice-yearly bonus system before you assume the headline figure is what you bank.
There is a ceiling. The pension calculation caps standard monthly remuneration at ¥650,000 for fiscal 2026, so pension contributions stop rising above that. The cap is scheduled to climb to ¥680,000 in September 2027, then ¥710,000 in 2028 and ¥750,000 in 2029. High earners will pay more at each step.
No, you cannot opt out. Enrollment is a legal obligation on the employer, not a benefit you elect. Nationality, visa status, and how long you plan to stay make no difference. Having good private insurance from home does not exempt you either.
There is one genuine exception. Say your employer sends you to Japan on a secondment of five years or less. If that employer is based in a country with a social security agreement, you can stay on your home system. You will need a certificate of coverage from your home authority.
Japan has agreements in force with 24 countries, including the United States, United Kingdom, Germany, Canada, Australia, India, and the Philippines. Austria joined most recently, in December 2025.
Note that four of those agreements (United Kingdom, South Korea, China, and Italy) only prevent double contributions. They do not let you combine coverage periods across countries.
Shorter hours do not automatically mean exemption. As of mid-2026, four conditions trigger enrollment:
That third condition is disappearing. From October 2026, the ¥88,000 wage requirement is removed entirely. The test becomes simply 20 hours a week at a company of 51 or more. Roughly 650,000 additional part-time workers are expected to be enrolled as a result. The company-size threshold then falls in stages after 2027, down to 36 employees and later 21.
Not sure whether your employer clears the headcount bar? Our guide to Japan's four company categories for work visas explains how employer size gets classified.
You pay 30% of the bill at the counter and insurance covers the other 70%. There is no deductible, no network, and no pre-authorisation. You show your card, you get treated, you pay your share.
Coverage is broader than most newcomers expect:
The part nobody mentions until they need it: monthly out-of-pocket costs are capped. The high-cost medical expense benefit (高額療養費) refunds anything above a ceiling set by your income bracket.
For a mid-range earner, that ceiling has been ¥80,100 per month plus a small percentage of costs above a threshold. From August 2026 it rises to roughly ¥85,800 for that bracket, as part of a phased increase. A new annual cap is being introduced alongside it to protect people in long-term treatment.
In practice, this means a hospital stay that generates a ¥1,000,000 bill costs you well under ¥100,000. It is the reason very few people in Japan carry supplementary private medical insurance.
This is where foreign employees lose the most money through inaction.
Japan requires 10 years of contributions to qualify for any old-age pension. Leave after four years and you have paid in over a million yen with nothing to show for it, unless you act.
You have two options.
The lump-sum withdrawal payment (脱退一時金) refunds part of your pension contributions after you leave. To qualify, all of the following must be true:
The amount is your average standard remuneration multiplied by a payment rate that scales with your contribution period:
| Contribution period | Payment rate |
|---|---|
| 6 to 12 months | 0.5 |
| 12 to 18 months | 1.1 |
| 24 to 30 months | 2.2 |
| 36 to 42 months | 3.3 |
| 48 to 54 months | 4.4 |
| 60 months or more | 5.5 |
Source: Japan Pension Service.
The rate stops climbing at 60 months. Someone who paid in for eight years gets the same refund as someone who paid for five.
On an average standard remuneration of ¥300,000 with 60 or more months of contributions, the calculation is ¥300,000 × 5.5, or ¥1,650,000 before tax. Japan withholds 20.42% at source, leaving about ¥1,313,070 in your account.
You can reclaim most of that 20.42%. Before you leave, file a "notification of tax agent" (納税管理人の届出書) with your local tax office and name someone in Japan to act for you. After the payment lands, your agent files a return applying the retirement income deduction and the refund follows. Skipping this step is the most common and most expensive mistake foreign leavers make. Set it up while you still have a Japanese address and a working Japanese bank account.
Is your home country one of the 24 with a totalization agreement? If so, your Japanese contribution months can count toward its qualifying period, and vice versa. Four years in Japan plus 26 years in Germany can add up to a German pension.
Claiming the lump-sum erases those months permanently. Taking the cash can be the worse deal in two cases: if you might return to Japan, or if your home system rewards the extra credit. Run the numbers before you file.
Japan's pension reform law, promulgated in June 2025, contains two amendments that matter here. First, the 60-month cap will rise to 96 months. Second, anyone leaving Japan on a valid re-entry permit will be blocked from claiming while that permit stands.
Neither is in force yet. Both take effect on a date to be fixed by cabinet ordinance. Check the current rule before you apply rather than trusting any guide, this one included.
Five things worth confirming before your first payslip:
Understanding these deductions is part of reading a Japanese offer properly. Our guide to foreigner salaries in Japan covers what to expect on the gross side. The Tokyo cost of living breakdown works from the net figure that shakai hoken leaves you.
Can I refuse shakai hoken if I already have insurance from my home country?
No. Enrollment is compulsory for eligible employees and the obligation sits with your employer. The only exception is a secondment of five years or less from a country with a social security agreement. That route requires a certificate of coverage from your home authority.
How much is shakai hoken per month in Japan?
Around 14.7% of your standard monthly remuneration if you are under 40. It rises to about 15.5% from age 40, when nursing care insurance starts. On a ¥300,000 monthly salary in Tokyo in 2026, that is roughly ¥44,070 or ¥46,500 respectively.
Does Japanese health insurance cover dental work?
Yes. Routine dental treatment including cleanings, fillings, root canals, and extractions is covered at the standard 70% rate. Cosmetic procedures, orthodontics for adults, and most implants are excluded.
What is the maximum pension refund I can get when leaving Japan?
The calculation is capped at 60 months of contributions and uses a payment rate of 5.5. Someone with an average standard remuneration of ¥300,000 receives ¥1,650,000 before the 20.42% withholding tax. Under current rules, contributions beyond five years add nothing to the refund.
How long do I have to claim the lump-sum withdrawal payment?
Two years from the date you lose insured status. Payments typically take three to six months to process after you apply from abroad, and you need a non-Japanese bank account to receive them.
Do I still need to enroll if I only work part-time?
Yes, if you work 20 or more hours a week at a company with 51 or more employees and expect to stay beyond two months. The ¥88,000 monthly wage requirement is being removed in October 2026. That change brings roughly 650,000 more part-time workers into the system.
Is shakai hoken the same as the national health insurance I hear about?
No. Shakai hoken is the employer-based system. Kokumin kenko hoken (国民健康保険) is the municipal system for the self-employed, students, and unemployed. Shakai hoken splits the cost with your employer and includes pension credit, so it is meaningfully better if you qualify.
All figures were taken from primary Japanese government publications and verified on 28 July 2026.
Rates change every April, and three separate reforms land during 2026. Confirm current figures with your employer's HR team or your local pension office before acting on them. This article is general information, not tax or legal advice.
Written by the Atarashift editorial team. Atarashift connects international professionals with verified Japanese employers hiring globally. Roles are filtered by Japanese level, English level, and visa sponsorship, so you only see what is genuinely open to you.
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