An Employer’s Guide to Social Security Contributions in Japan

In the US, ‘social security’ is only used to refer to retirement and disability fund contributions, while in other countries like Japan, social security encompasses many types of other insurances as well.

Like Comment

Every country has its own social security system, and the employer/employee contributions may include more items than in your home country.  In the US, ‘social security’ is only used to refer to retirement and disability fund contributions, while in other countries like Japan, social security encompasses many types of other insurances as well.

Social Security Contributions in Japan

The social security program in Japan includes five types of insurances: healthcare, nursing care, pension, employment and workmen’s accident compensation (this rate varies depending on the type of business and is only levied on the employer).  Contributions by employee and employer are paid the following month they are due, so there is no contribution due for a new employee on the first month’s salary.

There is a  ‘maximum monthly earnings’ for calculating some categories of insurance, in other words, the contribution calculation will be capped at that amount.  So, the maximum possible aggregate employee contribution is 14.35-15.69%, and for employers, it is 14.685-16.63%.

Health Insurance

This insurance is used to pay medical care benefits and allowances.  There is a higher contribution rate used for older employees, who presumably may have a greater need for healthcare. With their insurance card, employees only pay 30% of medical fees at any facility...read more

Shield GEO makes international employment simple. Our customers use Shield GEO's employer of record service to employ and payroll hundreds of workers in over fifty countries. Find out more.

Tim Burgess

Director, Shield GEO Services Ltd

No comments yet.