Last updated on October 12th, 2026 at 09:13 pm
The Retirement and Pensions System in Japan for Foreigners
Lots of ALTs and other foreign people in Japan are no longer staying for a few years maximum. A lot of workers now choose to make Japan their permanent home.Â
The Japanese pensions system requires workers to pay into the system from age 20 to 59. Both legal citizens of Japan and legal foreign residents are obliged to pay.Â
Similarly to the UK, employers pay towards pensions in Japan if they are employed, however self-employed citizens pay a set amount.Â
Categories for Compulsory CoverageÂ
There are 3 different categories of peopleâs pensions in Japan. These are known as categories 1, 2 and 3. As everyone is enrolled into the Japanese pension system, youâre sorted into different categories, including people who rely on their spouseâs pensions.Â
Japanese basic pensions can be subsidised by a private company pension scheme for people whose employers want to add more to their pension.Â
Category 1 of Japanese Pension
Category 1 residents are anyone who doesnât fall into the category of 2 or 3. These are registered residents between the ages of 20-59 who work self-employed.Â
Self-employed industries often include â
- Agriculture
- Fishery Business Operators
- ForestryÂ
- Students
Category 2 of Japanese Pension
Category 2 persons are people who have worked for employers within the private sector. They will have contributed to their pension, as will their employers, usually at a 50/50 contribution ratio.Â
Category 3 of Japanese Pensions
Category 3 is for insured peopleâsâ dependent spouses aged 20-59, and you DO need to reside in Japan to receive a category 3 status.
However, here are a few exceptions to this rule if youâre not able to provide an address for your home in Japan, for example â
- Youâre a student studying abroadÂ
- Youâre accompanying a person of category 2 who is sent to work abroad
- Staying in a foreign country for non-work purposes such as leisure or tourism
Can You Opt Out of the Japanese Pension System?
No, you cannot opt out of the Japanese pension scheme. Everyone in Japan must pay into the system, including foreigners in Japan. However, if you are disabled or unemployed, you can apply for reduced contribution payments. Visit your local municipal office to apply yearly.
How Stable is a Japanese Pension for Foreigners?
Everyone is guaranteed to get a pension who pays into the system, including foreigners. However, with the countryâs ageing population, the pension system in Japan is in a bit of a varying state. The government of Japan has promised that Japanese pensions will not fall lower than 50% of the average wage.
How Do I Enrol Into the Japanese Pension System?
Itâs best to check with your employer regarding your pensions, as they can enrol you into the basic scheme or the private employerâs pension scheme.Â
You should receive an envelope every April you are residing in Japan containing your deductions. These payments will be split into monthly or quarterly increments which can be paid at the post office, store or bank.
Alternatively, you will see deductions on your payslip. These deductions will be named shakai hoken (瀟äŒä¿éº) or social security. Alongside these deductions you should see one for healthcare, long-term care insurance, welfare insurance and employment insurance.Â
Be warned, Japanese employers have been caught splitting wage payments into separate bank accounts for workers. This means the tax will then be shifted from them to you. If your employer in Japan requests for you to open several bank accounts to spread your payments, this is illegal and should be reported.Â
How Much Will I Pay into the Japanese Pension System?
Each type of person residing in Japan or who falls into the other pensions categories will pay into the system. There are 3 different categories as previously discussed, as a resident of Japan you will be eligible for a Japanese pension as a foreigner regardless of how long you plan to stay.
Category 1 Pensions â Self Employed
As mentioned previously, Category 1 residents will pay a rate of Â¥14,660 (£91.32, $112.56) per month. This usually rises by around Â¥280 (£1.74, $2.50) per month for each year you contribute, but this will stop rising at Â¥16,900 (£105.27, $129.73) with 8 years of consistent contributions.Â
Category 2 Pensions â Private SectorÂ
Category 2 workerâs pension contribution depends on their wage. The total contribution is 15.507% of their monthly salary, before tax. Within this category, employers pay 50/50 towards their employees pensions, which works out as around 8% deductions overall. Category 2 members cover both basic national pensions and company subsidised.Â
Category 3 Pensions â SpousesÂ
Dependants within Category 3 will not make any contributions to pensions, theyâll be covered by their partnerâs pensions. Companies do NOT pay towards your spouseâs pensions, even if they contribute to yours. The basic contributions are significantly lower than company subsidised ones, so expect a lesser payout if you fall into this category.Â
Which Category are ALTs in for Japanese Pensions?
English teachers in Japan are classed within category 2 workers, which means you and your employer will both contribute to your pensions.Â
There is some dispute regarding this as even though ALTs are âEnglish teachersâ the companies hiring them are private sector rather than public, unlike teachers within schools. Teachers within public local schools in Japan receive a different type of pension, however this is something that doesnât apply to current ALTs.Â
Japanese Pension Payouts for Foreigners
For shorter term stays in Japan, people can contribute to their pensions whilst working here and then get them accredited to their home country. This depends on your home countryâs agreements with Japan at the time.
Workers can also take out a lump sum of their pension contributions up to a maximum 36 months. This would be an ideal choice if youâre planing to stay for 3 years max. Anything you contribute after this time cannot be withdrawn, so make sure you plan accordingly. Often foreign workers keep the stubs from their wage slips, showing how much has been contributed into their pensions.
How to Get your Lump Sum Payout
To get this lump sum payout from your Japanese pension, you must complete an application pack from your local insurance office and your bank must stamp this form.Â
Tax Representative Payout
A tax representative must be chosen for yourself, this can include your Japanese employer or a Japanese friend who is a resident there. Itâs seen as preferable to use a friend who resides in Japan, as it comes across as more trustworthy.Â
Your chosen representative must complete a âDeclaration Naming a Person to Administer Taxpayerâs Tax Affairs.â which is also found at your local insurance office. Once this is complete, you must return to your home country and post your application from there.Â
Bank Transfer Payout
Alternatively, you can apply in person at your local ward office, however you must have a bank account to transfer the money into. Your Japanese pension payout will only arrive after you leave Japan, this process usually takes longer to receive the money but is easier than filling in required forms.Â
There are a few things you need to bring when you apply for your lump sum payout this way, these include âÂ
- Bank account details in your home country
- Your Japanese pension book
- Passport
- Documents of your departure from Japan
If youâve already travelled home before realising you need to complete these steps to receive your pension lump sum, you can apply from overseas regarding your Japanese pension. Youâll need to start this process within 2 years after leaving Japan, or your money will no longer be available to claim.Â
To claim, youâll need âÂ
- Photocopies of the pages in your passport that show the date you left Japan, your residence status and your identity.
- Your pension book and a document that shows your pension number.
- A document stamped by your bank that shows the bankâs address and branch contact details, as well as your account name and number.
ALT Pensions
Pensions in Japan for foreigners vary between categories and companies. However, as an ALT with Interac you will provide 50/50 contributions with your employer, for more information on this topic you can contact us, and we will happily answer any questions regarding pensions and payouts.Â
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Working conditions:
- Salary range of 2.4 to 3.0 million yen annually for 12-month contracts
- 1 year contract (renewable by mutual agreement)
- Work Mondays to Fridays with scheduled teaching hours between 8 am and 5 pm (there will be a few times a year when schools will have special evenings or weekend events)
- Enrollment in National Health or Pension schemes, Employment Insurance and Industrial Accident Compensation Insurance
- 10 paid holidays a year (5 planned), with breaks during the summer and winter school holidays
Requirements:
- Be a university graduate with at least a bachelorâs degree in any major (If you are graduating in the next six months, you can still apply ahead of time)
- Can evidence having at least 12 years of education where the language of instruction in all courses was English
- Professional in all aspects of behavior, in being a team-player, and in being flexible, cheerful, and energetic
