“How much will I receive in the future?” “How does it differ from the National Pension?”
While the Employees’ Pension is familiar to company employees and civil servants, surprisingly few people accurately understand its mechanisms.
This article clearly explains everything from the basics of the Employees’ Pension to the premium structure based on the latest status as of 2026, and key points for increasing future benefit amounts.
- 1. The Difference Between Employees’ Pension and National Pension (Two-Tier Structure)
- 2. How are Employees’ Pension Insurance premiums determined?
- 3. How Much Will You Receive in the Future? Estimating Benefit Amounts
- 4. Three Major Benefits of Joining the Employees’ Pension Insurance
- 5. 【Q&A】Frequently Asked Questions
- Summary: The Employees’ Pension is the “Ultimate Savings & Insurance”
1. The Difference Between Employees’ Pension and National Pension (Two-Tier Structure)
Japan’s pension system is often likened to a “two-tiered structure.”
- First Tier
National Pension (Basic Pension)
All residents of Japan aged 20 to 60 are enrolled. - Second Tier
Employee Pension
Company employees and public servants are enrolled in addition to the National Pension.
Individuals enrolled in the Employees’ Pension Insurance are automatically enrolled in the National Pension as well, meaning they will receive both the “Basic Old-Age Pension” and the “Employees’ Pension” in the future.
2. How are Employees’ Pension Insurance premiums determined?
Employees’ Pension Insurance premiums are calculated by multiplying the monthly salary (standard monthly remuneration) by a common premium rate.
The premium rate is fixed at 18.3%
The current Employees’ Pension Insurance premium rate is 18.3%.
This rate increase concluded in 2017 (Heisei 29) and is now fixed.
Employer and employee split the cost equally (the company pays half)
Your employer pays half of the premium.
The effective out-of-pocket rate is 9.15%, meaning the system provides coverage exceeding the amount paid.
Calculation Mechanism
Insurance premiums are based on a classification called the “standard monthly earnings.”
Calculation Formula
Standard Monthly Earnings × 18.3% ÷ 2 (split equally)
Bonuses are also deducted at the same rate.
3. How Much Will You Receive in the Future? Estimating Benefit Amounts
The amount of your Employees’ Pension Insurance benefits is determined by your “period of enrollment” and your “income during your working years.”
| Category | Average annual income: 3 million yen | Average annual income: 5 million yen | Average annual income: 7 million yen |
| Estimated monthly premium at age 40 | Approximately 120,000 yen | Approximately 160,000 yen | Approximately 200,000 yen |
※This is an estimate including the full amount of National Pension benefits.
We recommend checking the actual benefit amount in detail via the “Pension Statement” or “Pension Net” services.
4. Three Major Benefits of Joining the Employees’ Pension Insurance
Compared to the National Pension (for the self-employed, freelancers, etc.), the Employees’ Pension Insurance offers more comprehensive coverage.
- Future pension amounts will increase
The second-tier Employees’ Pension is added to the first-tier Basic Pension, significantly boosting your benefits. - Generous disability and survivor pensions
In the event of illness, injury, or death, the basic pension is supplemented by the “Disability Employees’ Pension” and the “Survivor Employees’ Pension.” - No premiums for dependent family members (Category 3 Insured Persons)
If you have a spouse with an annual income below ¥1.3 million as a dependent, that spouse qualifies for National Pension benefits without paying premiums.
5. 【Q&A】Frequently Asked Questions
Q. Can part-time or temporary workers enroll?
A. Enrollment in social insurance (employee pension) is mandatory if the following conditions are met.
- Companies with 51 or more employees (as of October 2024)
- Weekly working hours of 20 hours or more
- Monthly wages of ¥88,000 or more
- Not a student
Q. Will my pension increase if I work until age 70?
A. Yes. You can remain enrolled in the Employees’ Pension Insurance until age 70 at the latest.
By working longer and paying premiums, you can increase the “transitional supplement” and the “earnings-proportional portion” you will receive in the future.
Summary: The Employees’ Pension is the “Ultimate Savings & Insurance”
The Employees’ Pension is an extremely efficient way to build assets, as employers cover half of the premium costs.
To alleviate concerns about retirement funds, the first step is to understand your current enrollment status and projected future benefits.
Log in to “Nenkin Net” to check your current simulation.
