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Amount of reduction or exemption of National Health Insurance tax of Japan
Closure of business or unemployment and National Health Insurance of Japan
Death or serious disease and Exemption from National Health Insurance tax of Japan
Application for reduction or exemption from National Health Insurance Tax is necessary
How to save amount of National Health Insurance of Japan (2021) ?
(National Health Insurance Association)
Reduction of National Health Insurance Tax of Japan and Covid-19
If you (a person who supports your household financially mainly) are affected by pandemic of corona virus (covid-19) financially, you may be able to apply for reduction of National Health Insurance tax (国民健康保険料) of Japan.
If you can satisfy all of following requirements, you can reduce amount of payment for National Health Insurance tax.
1) If estimated amount of business income or salaried income in 2021 is reduced by 30% or more compared to 2020.
ex. Amount of your salary in 2020 was 5 million yen and prospective amount of your salary in 2021 is 3.5 million yen.
2) Amount of your annual income in 2020 was 10 million yen or less.
3) In the case you expect reduction of salaried income of 2021 by 30% or more, amount of other kind of income in 2020 was 4 million yen or less.
It means that if you have side income and the amount is enough to support your household, you can not apply for reduction of National Health Insurance tax (=Kokuho= 国保)
ex.
Amount of your salaried income in 2020 was 5 million yen and prospective amount of your salaried income of 2021 is 3.5 million yen.
It means amount of your salary of 2021 is reduced by 30%.
In this case if total amount of your business income and real estate income, income from the transfer of stock etc. of 2020 was 4,000,001 yen, you can not apply for this arrangement.
Amount of reduction or exemption of National Health Insurance tax of Japan
Example.
Amount of National Health Insurance of 2021 is 100,000 yen.
Mr.Husband (Main household supporter)’s income in 2020 was 5 million yen.
Ms.Wife ‘s income in 2020 was 1 million yen.
100,000 yen × 5 million yen / (5 million yen + 1 million yen) =83,333 yen
(this amount is National Health Insurance tax supported by Mr.Husband)
In the case amount of income in 2020 was 6 million yen, amount of reduction is 4/10
So amount of reduction is 83,333 yen * 4/10 = 33,333 yen.
(This 4/10th defers depending on amount of income in 2020. from 2/10th to 10/10th. If amount of income of 2020 was 3 million yen or less, ratio is 10/10th. So you do not need to pay national health insurance tax in 2020.)
Then, 100,000 yen – 33,333 yen = 66,666 yen.
So you can pay National Health Insurance tax of 66,666 yen in 2021.
(As far as you submit necessary documents to city office)
Closure of business or unemployment and National Health Insurance of Japan
If Mr. Husband closed his business or lost his job, rate of reduction is 10/10th.
So he does not need to pay National Health Insurance tax even if the amount of income in 2020 was more than 10 million yen.
Death or serious disease and Exemption from National Health Insurance tax of Japan
If a person who supports his/her household financially mainly was killed or seriously diseased by pandemic of corona virus (covid-19), the household can apply for exemption from National Health Insurance tax of Japan.
Application for reduction or exemption from National Health Insurance Tax is necessary
In order to apply for these treatments, you need to fill in application form with necessary documents and submit them to government.
You need to prepare documents that can clarify amount of income of 2020 and 2021.
It will take 2 or 3 months until determination of approval or rejection of your application after your application.
These arrangement is different from each ward, city to some extent. Information above is in the case of Chuo ward, Tokyo.
How to save amount of National Health Insurance of Japan (2021) ?
Assumed that you have been an employee of a company. If you have decided to resign from your current job and start your business as sole proprietor (こじんじぎょうぬし), you will join National health insurance (こくみんけんこうほけん) in stead of Employee’s health insurance (けんこうほけん).
And you will also join National Pension (こくみんねんきん) in stead of Employee’s pension (こうせいねんきん).
After you left the job, you need to visit city office and take necessary process to join National Health Insurance and National Pension (within 14 days from departure from former job).
However after you join National Health Insurance and National Pension, you may find out that amount of National Health Premium increases (Depending on your situation like the number of family member and amount of income).
Even if amount of your taxable income is 5 million yen, amount of National Health Insurance and National Pension may be about 1 million yen (in the case of 4 household members).
In the case of National Health Insurance, there is not arrangement of dependent deduction.
While you were member of Employee’s Health Insurance, you could include your spouse as dependent. In this way, your spouse did not pay Employee’s Health Insurance tax.
On the other hand, in the case of National Health Insurance, each family member needs to join National Health Insurance. So your wife needs to pay National Health Insurance tax (If your wife is not salaried worker. If your wife is salaried worker, she will be member of Employee’s Health Insurance. However in the case of small sized company, she may not be a member of Employee’s Health Insurance).
So total amount paid for National Health Insurance tax will be larger than Employee’s Health Insurance tax.
【 Will you become dependent of your spouse ?】
In the case your spouse is an employee of a company and joins Employee’s Health Insurance, you may be able to be a dependent of your spouse.
If it is possible, you do not need to pay social insurance premium.
However in order to become spouse’s dependent, amount of your earnings should be 1.3 million yen per year.
And amount of your annual earning should be less than 50% of your spouse’s earning.
【Will you join Employee’s Health Insurance even after separation from former work ?】
If you can fulfill some conditions, you can be member of Employee’s Health Insurance for 2 years after separation from your former job.
In order to keep a membership of Employee’s Health Insurance, you need to submit documents within 20 days from separation from job.
However in this case a half of Employee’s Health Insurance tax is not paid by your former employer.
【Will you join National Health Insurance association ?】
Generally, in the case of sole proprietor, student, joins National Health Insurance managed by local city office.
However depending on your work and location, you can join National Health Insurance association (こくみんけんこうほけんくみあい).
Though name of こくみんけんこうほけんくみあい is similar to こくみんけんこうほけん、it is different one.
For example, if you are engaging in Restaurant Business, you may be able to join “Restaurant Businessこくみんけんこうほけんくみあい”.
If you are engaging in Art and Literature work, you may be able to join “Art and Literatureこくみんけんこうほけんくみあい”.
If you are engaging in civil engineering and construction work, you may be able to join “Civil engineering and constructionこくみんけんこうほけんくみあい”.
Depending on くみあい(association), amount of insurance does not increase in spite of amount of your income.
Amount of Health Insurance Premium in the case of こくみんけんこうほけんくみあい.
Assumed that you are operating a restaurant as sole proprietor. The number of family member is 2 and your age is less than 40 years old.
In this case annual amount of National Health Insurance association is about 370,000 yen.
If you are a family of four and annual amount of National Health Insurance Association premium is about 590,000 yen.
If you are employee of sole proprietor restaurant business operator of 4 family members, annual amount of National Health Insurance association is about 480,000 yen.
On the other hand, assumed you are living in Chuo-ku, Tokyo and you are a family of four. And the amount of taxable income is 7 million yen and less than 40 years age.
If you are member of ordinary National Health Insurance, amount of National Health Insurance premium is about 780,000 yen.
So you can save about 190,000 yen per year.
If you need any help to join National Health Insurance Association, you can contact with me.
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