Japan's Pension System Explained: National Pension vs Employee Pension for Foreign Residents
Japan's pension system applies to all residents aged 20 to 59, regardless of nationality. If you are living and working in Japan, understanding how the pension system works — and what options you have when you leave — is essential. This guide covers National Pension (国民年金), Employee Pension (厚生年金), the Lump-Sum Withdrawal Payment, social security agreements, and how to manage your pension record.
Overview: Japan's Two-Tier Pension System
| Feature | National Pension (国民年金) Tier 1 | Employee Pension (厚生年金) Tier 2 |
|---|---|---|
| Who Pays | Self-employed, freelancers, unemployed, students (Category 1 insured) | Company employees, civil servants (Category 2 insured) |
| Dependents | Must pay individually | Spouse not working = Category 3 insured (covered at no extra cost) |
| Monthly Contribution (2025) | ~¥16,980 (flat rate) | ~18.3% of salary (split 50/50 with employer) |
| How to Pay | Payment slip, bank transfer, or convenience store | Automatically deducted from salary |
| Full Pension (40 years) | ~¥816,000/year (~¥68,000/month) | National Pension base + income-based Employee Pension |
| Minimum Contribution Period | 10 years (120 months) for old-age pension eligibility | |
Who Pays What: The Three Categories
| Category | Who | What They Pay | How to Enroll |
|---|---|---|---|
| Category 1 | Self-employed, freelancers, students, unemployed (ages 20-59) | National Pension only (~¥16,980/month) | Enroll at municipal office after address registration |
| Category 2 | Employees of companies with pension enrollment | Employee Pension (includes National Pension) — deducted from salary | Employer handles enrollment |
| Category 3 | Dependent spouse of Category 2 (not working or earning below threshold) | No direct payment (covered through spouse's plan) | Employer of the working spouse handles enrollment |
Switching Categories When Changing Jobs
Your pension category changes when your employment status changes. You must handle the transition yourself in some cases:
| Situation | Action Required | Where |
|---|---|---|
| Starting a new job (company employee) | New employer enrolls you in Employee Pension | Employer handles |
| Leaving a job (becoming self-employed/unemployed) | Switch to National Pension within 14 days | Municipal office |
| Changing jobs (employee → employee) | New employer handles the transfer | Employer handles |
| Spouse stops working | Enroll as Category 3 dependent | Working spouse's employer |
| Starting own business | Switch to National Pension | Municipal office |
Lump-Sum Withdrawal Payment (脱退一時金)
This is one of the most relevant provisions for foreign residents who plan to leave Japan permanently.
Eligibility
- You do not have Japanese nationality
- You contributed to the pension system for at least 6 months
- You do not have the right to receive a pension (i.e., less than 10 years of contributions, or you are choosing the lump sum)
- You have left Japan (no longer have an address in Japan)
- You apply within 2 years of leaving Japan
How Much Can You Receive?
| Contribution Period | National Pension (Approx.) | Employee Pension |
|---|---|---|
| 6-11 months | ~¥50,940 | Based on average salary |
| 12-17 months | ~¥101,880 | Based on average salary |
| 18-23 months | ~¥152,820 | Based on average salary |
| 24-29 months | ~¥203,760 | Based on average salary |
| 30-35 months | ~¥254,700 | Based on average salary |
| 36-59 months | Pro-rated | Based on average salary |
| 60 months (maximum) | ~¥509,400 | Based on average salary |
Note: The maximum calculation period is 60 months (5 years). Even if you contributed for longer, the lump-sum refund is capped at the 60-month equivalent. Amounts shown are approximate and based on recent rates.
How to Apply
- Before leaving Japan: Designate a tax representative (納税管理人) at the municipal office — this person will handle any tax on the withdrawal
- After leaving Japan: Submit the Lump-Sum Withdrawal form to the Japan Pension Service. You can download the form from the JPS website.
- Required documents: Passport copy, bank account details (can be overseas), pension handbook, residence de-registration proof
- Processing time: Typically several months after application
Social Security Agreements
Japan has social security agreements with many countries. These agreements can:
- Prevent double coverage: You may be exempt from Japan's pension if you are covered in your home country and will stay in Japan for a limited period (typically 5 years or less)
- Combine contribution periods: Years contributed in Japan and your home country can be combined to meet the 10-year minimum for pension eligibility
Countries with Agreements (as of 2025)
| Type | Countries |
|---|---|
| Full Agreements (prevent double coverage + combine periods) | Germany, United States, Belgium, France, Canada, Australia, Netherlands, Czech Republic, Spain, Ireland, Brazil, Switzerland, Hungary, India, Luxembourg, Philippines, Slovakia, China, Finland, Sweden, Italy, United Kingdom |
| Limited Agreements (prevent double coverage only) | South Korea (partial arrangement) |
If your country is on this list, check with the Japan Pension Service or your home country's pension authority about how the agreement applies to your situation.
Checking Your Pension Record: Nenkin Net (ねんきんネット)
You can view your contribution history and estimated future benefits online:
- Go to: https://www.nenkin.go.jp/n_net/
- Register using your Basic Pension Number (基礎年金番号) — found on your pension handbook (年金手帳) or Nenkin Teikibin mailing
- Log in to view your contribution months, payment status, and projected pension amount
You can also visit your nearest Pension Office (年金事務所) in person. Bring your Residence Card and pension handbook.
Exemptions and Reduced Payments
If you are experiencing financial hardship, you may be eligible for reduced National Pension payments or full exemption:
- Full Exemption (全額免除): For very low-income residents
- 3/4 Exemption: Pay 1/4 of the standard amount
- Half Exemption: Pay half the standard amount
- 1/4 Exemption: Pay 3/4 of the standard amount
- Student Exemption (学生納付特例): Full deferral for students
Apply at your municipal office. Exempt periods still count toward the 10-year minimum requirement (though at a reduced benefit rate).
Frequently Asked Questions
Do foreign residents have to pay pension in Japan?
Yes. All residents of Japan aged 20 to 59 are required to enroll in the pension system, regardless of nationality. Employees are automatically enrolled in Employee Pension (厚生年金) by their employer. Self-employed and non-working residents must enroll in National Pension (国民年金).
Can I get my pension contributions back when I leave Japan?
Yes, through the Lump-Sum Withdrawal Payment (脱退一時金). You can apply within 2 years of leaving Japan if you contributed for at least 6 months and do not have Japanese nationality. The maximum covered period for the refund calculation is 5 years (60 months).
How many years do I need to contribute to receive a pension from Japan?
You need a minimum of 10 years (120 months) of contribution to be eligible for the old-age pension. This can be a combination of actual contributions and exempt periods. Social security agreements between Japan and other countries may allow you to combine contribution periods.
What is the difference between National Pension and Employee Pension?
National Pension (国民年金) is the base tier — flat-rate contributions (~¥16,980/month) for self-employed and non-working residents, providing a basic pension. Employee Pension (厚生年金) is the second tier — income-based contributions split with employer, providing a higher pension amount. Employee Pension includes National Pension automatically.
How can I check my pension record?
You can check your pension record through Nenkin Net (ねんきんネット), the Japan Pension Service's online portal. You need a Basic Pension Number to register. You can also visit your nearest pension office (年金事務所) in person with your pension handbook and Residence Card.
※ The information on this site is for reference only. Pension rates, rules, and social security agreements may change. Please confirm details with the Japan Pension Service (日本年金機構) or your nearest pension office (年金事務所). For personalized advice regarding your pension and tax situation, please consult a qualified professional.
