Pension and health insurance when self-employed
The National Pension and National Health Insurance you pay yourself, and the optional layers that close the gaps.
Sole proprietors enroll in the National Pension (a flat monthly premium) and National Health Insurance (income-based, billed by your municipality), pay both in full themselves, and can add optional layers to raise future benefits.
Key points
- No employer split — you pay 100% of both premiums.
- National Pension is a flat monthly amount reset each fiscal year.
- National Health Insurance is income-based and set by your municipality.
- Optional add-ons (fixed-amount extra pension, National Pension Fund, iDeCo) raise future benefits.
The two systems you join
Leaving employment for self-employment usually means switching from employees’ pension and health insurance to the National Pension (国民年金) and National Health Insurance (国民健康保険). The National Pension is a flat monthly premium — set at ¥17,920 per month for fiscal 2026 — the same for everyone regardless of income, with prepayment discounts and a low-income exemption/deferral process. National Health Insurance is different: your municipality calculates the premium from your prior-year income, so it rises after a strong year and is capped at an annual maximum.
Both switches are your responsibility and are time-sensitive. When you leave a job you generally have a short window to enroll in National Health Insurance (or continue your former plan for up to two years), and you register the pension category change at your municipal office. Missing these can create gaps or back-bills.
Closing the coverage gaps
Self-employment trades an employer’s contribution for control, but it leaves real gaps: a lower future pension than an employee earns, and no built-in sick-pay for many. You can raise the pension floor cheaply with the fixed-amount extra pension (付加年金), and add the National Pension Fund (国民年金基金) or iDeCo for a larger, tax-deductible top-up. For lost income during illness, income-protection insurance or a cash buffer takes the place of employees’ injury-and-sickness allowance.
Two rules make this efficient: premiums for National Pension and National Health Insurance are deductible as social-insurance premiums, and the retirement/pension schemes above are separately deductible. So the money you move into your own safety net also lowers this year’s tax — which is why the companion guide treats the self-employed retirement toolkit as one plan.
Who this is for
- New sole proprietors leaving employment
- Freelancers planning pension and health cover
What this is not
- Cross-border social-security agreements in detail
- Individual eligibility rulings
- Premium amounts, caps, and exemption rules change yearly and by municipality — confirm with Japan Pension Service and your city office.
Frequently asked questions
What about pension and health insurance when self-employed in Japan?
As a sole proprietor you generally enroll in National Health Insurance (国民健康保険) and the National Pension (国民年金), and you pay both yourself — there is no employer split. National Pension is a flat monthly amount; National Health Insurance premiums are income-based and billed by your municipality. You can add optional coverage (e.g. the national pension fund, iDeCo, or income-protection insurance) to close gaps. Budget these into your tax reserve.
How can a self-employed person save for retirement in Japan tax-efficiently?
Self-employed savers can stack deductible schemes. Small-business mutual aid (小規模企業共済) allows ¥1,000–70,000/month (up to ¥840,000/year), fully deductible, paid out when you close or retire the business. iDeCo lets the self-employed contribute up to ¥68,000/month, a ceiling shared with the National Pension Fund. The extra pension (付加年金) cheaply raises the state pension. All reduce this year’s taxable income while building your own safety net; lump-sum payout timing rules interact, so plan large withdrawals with a professional.