Working in Japan?
Healthcare and Social Security in Japan
As an essential part of social security in Japan, there is a public healthcare policy for all Japanese citizens and foreigners who will be staying in Japan for more than 3 months. Instead of subscribing to the National Health Insurance (NHI) scheme, employees often enroll in a company health insurance plan (kenko hoken) via their employer (so-called Social/Employees Health Insurance). Their monthly contributions to medical insurance are deducted directly from their paycheck. You can find out more information about National Health Insurance for foreigners in Japan from the United State’s Social Security Administration.
If you are a self-employed person working in Japan, you need to enroll in the National Health Insurance Plan (kokumin kenko hoken) at your nearest government office. This is the same place where you completed all the details for your Resident Card. Your health insurance premium varies according to your income level and the number of people living in your household.
However, in most cases public healthcare only reimburses 70% of most medical expenses. For children under three the figure is slightly higher, and it can be expected that 80% of the total healthcare cost will be recouped. Various medical treatments are not paid for at all. You might consider taking out additional health insurance from a private company.
Planning for the Future
Every person aged 20–59 and living in Japan must usually enter into the National Pension Plan, regardless of their nationality. The National Pension Plan (kokumin nenkin) is supposed to guarantee residents of Japan a basic income in their old age or in case of disability.
You have to enroll in this scheme at your local government office and pay a monthly contribution of roughly 16,000 JPY, regardless of your income level. However, if you are part of the Employees’ Pension Insurance System (kōsei nenkin hoken) as well, your employer will automatically enroll you for the kokumin nenkin, and you don’t need to handle the paperwork yourself.
Employee Pension Insurance
All full-time employees working for a Japanese company with more than five employees will automatically become a part of the Employee Pension Insurance. It does not matter whether they are Japanese citizens or expatriates.
Your monthly contributions depend on your income level and will be deducted from your paycheck (together with the 16,000 JPY for the National Pension Plan). Once you leave Japan, you may get back all your Japanese pension contributions in a lump-sum withdrawal, provided you have paid them for more than six months.
Social Security Agreements
If your home country doesn’t have a social security agreement with Japan but has a comparable state pension plan, you might be required to pay contributions in both countries. This depends on the exact nature of your employment in Japan, your length of stay, and general regulations in your country of origin.
At the moment, there are social security agreements with Australia, Belgium, Brazil, Canada, the Czech Republic, France, Germany, Ireland, the Netherlands, South Korea, Spain, Switzerland, Hungary, India, the UK, and the United States. Another agreement with Italy was signed a while ago, but has not been enforced yet.
As a general rule, expatriates from these countries have to pay state pension contributions in Japan only — the only exception being that their employment contract explicitly states that their assignment is only temporary. Then they are exempt from contributing to Japanese pension schemes, but they have to pay pension contributions in their home country.
A Word of Advice
The application of social security agreements to the situation of individual expats can be rather complicated. It is always best to get in touch with the pension office in your country before you move to Japan and ask for advice.
Of course, most private pension plans and retirement provisions (e.g. life insurance, pension funds, investing in real estate, etc.) do not fall under the rule for national pension schemes. You should rather contact your investment manager or an advisor from your bank to learn more.
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