National Health Insurance (国保, kokuho) is the insurance that sole proprietors, freelancers, and people who have left a job join. The premium — which many people are surprised to find "higher than expected!" — is determined by a structure of "income levy + per-capita levy (+ per-household levy)," and the amount varies by local government. This article clearly explains, with sources, the calculation structure, the fiscal-year-Reiwa-7 cap (¥1,090,000), reduction schemes, and ways to keep the premium down.
① The National Health Insurance premium is mainly "income levy = (previous year's income − ¥430,000 basic deduction) × rate" + "per-capita levy = a fixed amount per enrollee" (in some local governments plus a per-household levy = a fixed amount per household).
② Rates and amounts differ by municipality (even for the same income, where you live can create a gap of tens of thousands to over a hundred thousand yen a year).
③ The cap (levy limit) is ¥1,090,000 a year in fiscal year Reiwa 7 (medical ¥660,000 + latter-stage support ¥260,000 + long-term care ¥170,000)[Ministry of Health, Labour and Welfare (in Japanese)].
④ Unlike a company's health insurance, there are no "dependents." A per-capita levy applies for each family member.
⑤ For low-income households there are schemes such as 70% / 50% / 20% reductions and a halving of the per-capita levy for preschool children.
The premium calculation formula
Each portion is calculated as "income levy + per-capita levy (+ per-household levy)."
- Income levy: (previous year's total income, etc. − ¥430,000 basic deduction) × the local government's rate
- Per-capita levy: a fixed amount per enrollee × number of enrollees
- Per-household levy: a fixed amount per household (some local governments do not use it; Tokyo's 23 wards, for example, use only the income levy + per-capita levy)
For example, as in Nakano Ward, Tokyo (fiscal year Reiwa 7), each local government publishes its rates for the fiscal year[Nakano Ward (in Japanese)]. Because it is calculated on "the previous year's income," be careful that the premium can rise sharply the year after your first year in business turns a profit, or the year after you leave a job.
The cap is ¥1,090,000 a year (fiscal year Reiwa 7)
The premium has a cap (levy limit), which in fiscal year Reiwa 7 is medical portion ¥660,000 + latter-stage elderly support portion ¥260,000 + long-term care portion ¥170,000 = ¥1,090,000 in total[Ministry of Health, Labour and Welfare (in Japanese)]. No matter how high your income, you will not be charged a premium above this (the cap has been raised almost every year in recent years).
Reduction and exemption schemes
- Low-income household reduction: if the household's income is at or below a set level, the per-capita levy and per-household levy are reduced by 70% / 50% / 20% (no application needed; an income declaration is required).
- Per-capita levy for preschool children: for children before they start elementary school, the per-capita levy is reduced by 50%.
- Reduction for involuntarily unemployed people: for cases such as leaving a job for company reasons, there is a special provision that calculates the previous year's employment income as 30/100. When leaving a job, also check Taxes and procedures when changing or leaving a job.
- Reductions for disaster, sudden income drop, etc.: each local government has its own reduction/exemption schemes. If payment is difficult, don't leave it — go to your municipality's counter.
Ways to keep the premium down (for sole proprietors)
- Compress your income: the National Health Insurance income levy is based on "the previous year's total income." The blue return special deduction (up to ¥650,000) and booking expenses lower not only your tax but also your National Health Insurance premium. On the other hand, note that "income deductions" such as iDeCo and the small enterprise mutual aid do not work for the National Health Insurance calculation (only the ¥430,000 basic deduction applies).
- Smart payment methods: besides account transfer, some local governments also allow cashless payment.
- Incorporation / micro-corporation: if your income is large, switching to social insurance via a micro-corporation can significantly lower the premium in some cases (see The timing of incorporation).
- National Health Insurance associations: depending on your industry, you may be able to join a "National Health Insurance association" (such as the Bungei Bijutsu Kokuho) that charges a fixed amount regardless of income.
FAQ
About how much is the National Health Insurance premium?
It is determined by "(previous year's income − ¥430,000) × rate + number of enrollees × per-capita levy," and rates differ by local government. As a guide, for a single person with an income of ¥3 million, many local governments come to around ¥300,000 a year, and the cap in fiscal year Reiwa 7 is ¥1,090,000 a year. Please calculate the exact amount using the rates of your municipality.
Why does it feel more expensive than a company's health insurance?
A company's health insurance has the company bear half the premium and dependent family members pay zero, but National Health Insurance is fully self-borne, has no concept of dependents, and charges a per-capita levy for the number of family members.
Why is National Health Insurance high in the year I leave a job?
Because the premium is calculated on "the previous year's income," so even if your income falls you end up paying a premium based on the previous year's employment income. If you leave for company reasons, there is a reduction that treats the previous year's income as 30/100, and for two years after leaving you may be able to choose voluntary continuation of the company's health insurance — so compare them.
Will joining iDeCo make National Health Insurance cheaper too?
No. Because the National Health Insurance income levy is calculated by subtracting only the ¥430,000 basic deduction from income, income deductions such as iDeCo and the life insurance premium deduction do not work for National Health Insurance. What is effective for lowering National Health Insurance is things that reduce "income itself," such as expenses and the blue return special deduction.
Data sources
- Levy limit (fiscal year Reiwa 7: medical ¥660,000 + support ¥260,000 + care ¥170,000 = ¥1,090,000): Ministry of Health, Labour and Welfare — On the levy (taxation) limit of National Health Insurance premiums (tax) (in Japanese)
- Example of the calculation method (income levy, per-capita levy, ¥430,000 basic deduction): Nakano Ward — How to calculate the National Health Insurance premium (in Japanese)
* Premium rates and reduction criteria differ by local government and fiscal year. This article is general information; please confirm the exact premium with your municipality.