Pay months that count
Apr to Jun
averaged, allowances included
New grade applies
Sep to Aug
usually seen in October pay
Employee rate, Tokyo
14.19%
health, levy and pension
Our example
+¥7,095
a month, for 12 months
Tokyo Kyokai Kenpo rates for FY2026 (from March 2026 pay), employee under 40. Rules checked against the Japan Pension Service in September 2026.
See your full deduction breakdown
Health insurance, pension, employment insurance, income tax and resident tax, line by line.
How Japan social insurance deductions really work
Your premiums are not a percentage of this month's pay. They are a percentage of your standard monthly remuneration (標準報酬月額, hyojun hoshu getsugaku), a grade in a fixed table. Pay between ¥350,000 and ¥370,000 puts you in the ¥360,000 grade. Pay between ¥395,000 and ¥425,000 puts you in the ¥410,000 grade.
The grade is set once a year in the teiji kettei (定時決定). Your employer reports what it paid you in April, May and June on the 算定基礎届 in early July. The Japan Pension Service averages it, assigns a grade, and that grade applies from September to the following August (Japan Pension Service).
What counts as pay is broader than most people expect:
- Base salary and every regular allowance (housing, family, role).
- Overtime, late-night and holiday pay actually paid in those months.
- Commuting allowance, in full. It is tax-free, but not free of social insurance.
- Not included: bonuses paid three times a year or less. Those carry their own premium on the standard bonus amount.
Timing trips people up too. Overtime is usually paid the month after it is worked, so March overtime lands in April pay and counts. Busy fiscal year-end months can quietly set your deductions for the next twelve months.
Worked example: spring overtime moves you two grades
Say you earn ¥350,000 base plus ¥15,000 commuting allowance. Normally that is ¥365,000, the ¥360,000 grade. Through April to June you also averaged ¥35,000 of overtime, so your average was ¥400,000 and you landed in the ¥410,000 grade.
| Employee premium, per month | ¥360,000 grade | ¥410,000 grade |
|---|---|---|
| Health insurance + support levy (5.04%) | ¥18,144 | ¥20,664 |
| Pension (9.15%) | ¥32,940 | ¥37,515 |
| Total | ¥51,084 | ¥58,179 |
That is ¥7,095 more a month, or ¥85,140 over the twelve months the grade lasts, even if you never work that much overtime again. Aged 40 to 64, nursing care insurance adds another ¥405 a month on top.
Some of it comes back. Premiums are deductible, so your monthly income tax withholding falls by roughly ¥724 (PayMetric Labs' own estimate, using the 10.21% marginal rate at this income), and next June's resident tax will be about 10% of the extra premiums lower. The net hit to take-home is still most of the increase.
When your shakai hoken grade changes mid-year
Outside September, the grade only moves through a zuiji kaitei (随時改定, details). All three conditions must hold:
- Your fixed pay changed: base salary, a regular allowance, or a switch between daily and monthly pay. Overtime alone does not count.
- The average of the three months from that change, overtime included, lands two or more grades away from your current grade.
- You were paid for at least 17 days in each of those three months.
If they do, the new grade starts in the fourth month. A promotion in January shows in April's premium and, with next-month collection, May's pay.
What you can actually do about it
| Situation | What to do |
|---|---|
| Your April to June is high every year (fiscal year-end, seasonal peaks) | Ask HR in June about the annual-average method. It needs a two-grade gap and your consent, and must be filed with the July report. |
| One-off overtime spike this spring | Nothing changes it now. Check your grade on the September notice, budget for the higher deduction until August, and expect a small tax offset. |
| You had a long unpaid absence in spring | Months with fewer than 17 paid days are left out of the average. Check that the grade on your September notice reflects your normal months. |
| Negotiating an offer in Tokyo or Osaka | Compare offers on gross, then check the grade. A generous commuting allowance or allowances paid monthly lift premiums; a bonus-heavy package is charged differently. |
| You turn 40 in the next year | Nursing care insurance starts around your 40th birthday, adding 0.81% of your grade each month until 65. |
Don't try to game it to the point of hurting your pay: a lower grade also means a lower future pension and lower sickness and maternity allowances. The annual-average method exists for people whose spring genuinely isn't typical, and it's worth asking about (Japan Pension Service).
Japan payslip deductions: common questions
Why did my take-home pay drop in October when I didn't get a raise?
Because your social insurance grade was reset from your April to June pay, not your salary. Overtime, shift allowances and commuting allowance paid in those three months all count. If they pushed your average into a higher grade, the new premiums apply from September, and most companies deduct September's premium from October pay. In our example, a grade move from ¥360,000 to ¥410,000 costs ¥7,095 a month.
How are Japan social insurance deductions calculated?
Each premium is your standard monthly remuneration (a grade, not your exact pay) times the employee rate. In Tokyo under Kyokai Kenpo for 2026, that is 4.925% health insurance, 0.115% child and childcare support levy, 9.15% pension, plus 0.81% nursing care if you are 40 to 64. Employment insurance is separate: 0.5% of actual pay each month.
Does commuting allowance count toward social insurance?
Yes. Commuting allowance is exempt from income tax up to the monthly limit, but it counts in full as remuneration for social insurance. A pricey commuter pass can lift you a grade on its own, and a six-month pass is spread across the months it covers.
Why does my payslip look wrong: the premium didn't change even though my pay did?
Social insurance does not follow your monthly pay. The grade is fixed from September to August unless your fixed pay (base salary or a regular allowance) changes enough to move you two or more grades, which triggers a mid-year revision. A month of heavy overtime in November changes nothing. The same overtime in May can cost you for a year.
Can I ask my employer to use my annual average instead?
If your April to June pay is high every year because of the nature of the work (for example, fiscal year-end or seasonal peaks) and the gap against your annual average is two grades or more, your employer can apply to use the average of the previous July to June instead. You have to agree to it. Ask HR before the 算定基礎届 goes in during early July, not after the new grade arrives.
Is a higher grade all bad?
Not entirely. Your future kosei nenkin pension, sickness allowance (shobyo teatekin) and maternity allowance are all based on the standard monthly remuneration, so a higher grade raises those too. The trade is more deducted now for more protection and pension later.
What is the new deduction that appeared on my payslip in spring 2026?
That is the child and childcare support levy (子ども・子育て支援金), collected with health insurance from March 2026 pay. Kyokai Kenpo set it at 0.23% for 2026, split 50/50, so you pay 0.115% of your standard monthly remuneration. Some payslips show it as its own line, others fold it into health insurance.
Does this apply if I'm in a company health insurance society, not Kyokai Kenpo?
The grade system and the September timing are the same. The health insurance rate is not: kenpo kumiai (company or industry health insurance societies) set their own rates, often lower than Kyokai Kenpo's. Pension is 18.3% everywhere, split evenly.
Methodology and limits
Rules come from the Japan Pension Service pages on the teiji kettei, zuiji kaitei and annual-average determination. Rates are Kyokai Kenpo's FY2026 Tokyo rates (health 9.85%, support levy 0.23%, nursing care 1.62%, all split 50/50) and the national 18.3% pension rate. All checked in September 2026.
Premium figures apply the official grade × rate formula. Your payslip may differ by a yen through rounding, and by more if you are in a kenpo kumiai or outside Tokyo. The tax offset is an estimate that assumes a single employee in the 10% income tax band. This is general information, not tax or payroll advice.
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