Japan's pension system for foreigners: how it works, how much you pay, and what happens when you leave

There’s a line on the Japanese payslip that almost every foreign resident sees every month without paying much attention to it: 厚生年金保険料. The pension contribution. For most people it’s just a number that reduces take-home pay, with no clear picture of where it goes, what it’s building, or what happens to that money if you ever leave Japan.

I’ve been contributing to the Japanese system for years, and it took a while to fully understand it — not because it’s complicated, but because nobody explains it clearly and the official documentation in Japanese isn’t designed for someone who arrived in the country as an adult. This article is what I wish I’d had from the start.

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The structure: two layers

Japan’s pension system has two levels that work together, and understanding the difference is the starting point for everything else.

Kokumin Nenkin (国民年金) — the basic pension. Mandatory for all residents in Japan aged 20 to 59, regardless of nationality. If you’re self-employed, unemployed, or your spouse doesn’t work, you pay into Kokumin Nenkin directly: a fixed monthly contribution (¥16,980 in 2025) that you pay yourself.

Kosei Nenkin (厚生年金保険) — the employees’ pension. If you work at a company with five or more employees, you’re automatically enrolled in Kosei Nenkin. And here’s the key thing that many people don’t fully grasp: Kosei Nenkin doesn’t replace Kokumin Nenkin — it includes it. When you contribute to Kosei Nenkin, you’re contributing to both systems simultaneously. Your employer handles everything through a single payslip deduction.

The result: if you’re a company employee in Japan, your future pension will have two components — a basic pension (老齢基礎年金) from the Kokumin Nenkin side, and an earnings-related pension (老齢厚生年金) from the Kosei Nenkin side. The longer you contribute and the higher your salary, the larger the second component.

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How much you pay each month

Kosei Nenkin contributions are calculated on what Japanese calls 標準報酬月額 (hyōjun hōshū getsugaku) — your “standard monthly remuneration.” It’s a standardised value that approximates your actual monthly salary (including some allowances), assigned to one of the official salary brackets which run from ¥58,000 to ¥650,000.

The contribution rate is 18.3% of that standardised value, split exactly 50/50: you pay 9.15%, your employer pays 9.15%.

Using a standard monthly remuneration of ¥450,000 as an example:

	Monthly amount
Your contribution (9.15%)	¥41,175
Employer contribution (9.15%)	¥41,175
Total entering the system	¥82,350

What you see on your payslip under 厚生年金保険料 is ¥41,175. What you don’t see — but exists — is that your employer is paying the same amount on your behalf. If you’ve ever wondered why the system seems “generous” given what you contribute, it’s because you’re effectively contributing twice what appears on the payslip.

For a full breakdown of how this fits alongside your other deductions, the Japanese payslip explained walks through each line item.

Bonuses (賞与) are also subject to Kosei Nenkin: the same 9.15% applies to bonus payments, up to ¥1,500,000 per payment.

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Your pension balance

Unlike individual savings schemes in some countries, Japan’s pension system works on a pay-as-you-go basis: what you contribute today isn’t sitting in an account with your name on it — it’s funding the pensions of people who are retired right now. Your future pension will be paid by the working generation of that time.

This has an important implication: the pension you’ll receive depends on how many years you’ve contributed and your historical average salary, not on how much you’ve literally “accumulated.” The system calculates an estimated figure you can check at any time on Nenkin Net — more on that at the end of this article.

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What you’ll receive: the 10-year rule

To be entitled to receive a Japanese pension when you retire, you need a minimum of 10 years of contributions (120 months). Until 2017 the minimum was 25 years, which excluded most foreigners with shorter stays. The change to 10 years in 2017 was significant: it opened pension eligibility to a much wider group.

The standard retirement age is 65, with the option to take it early from 60 (with a reduced amount) or defer it up to 75 (with a meaningful increase for each month of delay).

The monthly amount depends on two factors: total months contributed and average salary over your career. Using the same ¥450,000 standard monthly remuneration example:

Years contributed	Basic pension (Kokumin)	Earnings-related (Kosei)	Estimated total/month
10 years	~¥17,000	~¥25,000	~¥42,000
15 years (180 months)	~¥25,500	~¥35,000	~¥60,500
20 years	~¥34,000	~¥49,000	~¥83,000
30 years	~¥51,000	~¥74,000	~¥125,000
40 years (maximum)	~¥68,000	~¥99,000	~¥167,000

The 15-year row reflects a real case: 10 months of Kokumin Nenkin during an initial transition period, followed by 170 months of Kosei Nenkin as a company employee. The 10 Kokumin months count towards the basic pension exactly the same as Kosei months — they’re not lost or weighted differently.

These figures are illustrative estimates based on a constant ¥450,000/month salary. Your actual amount depends on how your salary has evolved over time and any government adjustments applied along the way. The most reliable way to see your personalised estimate is Nenkin Net’s simulation tool, which uses your real contribution records.

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If you leave Japan before retirement: the lump-sum withdrawal

This is the point that most foreign residents are most interested in, and it has its own official name: 脱退一時金 (dattai ichiji-kin), the lump-sum withdrawal payment.

If you permanently leave Japan and don’t have a pension coming, you can apply for this refund. The conditions:

• You must be a non-Japanese national
• You must have contributed for a minimum of 6 months
• You must have left Japan and cancelled your residence registration (jūsho)
• You must apply within 2 years of leaving

The amount is proportional to contribution time, but with a 60-month cap (5 years) for the Kokumin Nenkin component. The Kosei Nenkin component is calculated separately using a different formula.

Japan withholds 20.42% tax on the lump sum. If your home country has a tax treaty with Japan — Spain does, as do most EU countries — you can reclaim this withholding by filing a Japanese tax return before leaving, or through the treaty procedure from your home country afterwards.

An important point: if you’ve contributed 10 years or more, the lump sum and the future pension are mutually exclusive. You can’t claim the lump sum and still receive a Japanese pension later. You have to choose.

With 180 months contributed (the example case above), the estimated pension is around ¥60,000–70,000 per month from age 65. The lump sum for those same 180 months, by contrast, would be limited to a modest calculation on the Kokumin Nenkin side (10 months, well within the 60-month cap) plus the Kosei Nenkin formula — an amount you’d recover within a few years of monthly pension payments. At 15 years of contributions, the numbers almost always favour keeping the pension rights, especially if you expect to retire in reasonable health.

The right choice depends on how much you’ve contributed, your current age, your expected lifespan, and whether you might return to Japan at some point. Under 5–6 years of contributions, the lump sum is usually the practical option. Above 10–12 years, keeping the pension is almost always worth more in the long run.

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Bilateral agreements: avoiding double contributions

A classic expat problem: if you work abroad, you can end up contributing to two pension systems at once — the country you’re living in and your home country — without receiving double benefits. To address this, Japan has bilateral social security agreements with several countries, including Spain (in force since 2000), as well as Germany, France, the UK, Italy, the Netherlands, Belgium, Switzerland, the United States, Canada, Australia, South Korea and others.

The practical effect for someone living in Japan under a local contract is usually that you contribute to the Japanese system and not to your home country’s system during your Japan residency. In return, years contributed in Japan can count towards minimum contribution thresholds in your home country, though the actual amounts are calculated separately by each system.

If you’re unsure how the agreement applies to your situation — especially if you’re paid partially from abroad or have alternating periods between countries — check directly with your home country’s social security authority, which will have a department specifically for international treaty cases.

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How to check your records on Nenkin Net

Nenkin Net (ねんきんネット) is the Japan Pension Service’s online portal where you can check your contribution history, see how many months you’ve accumulated, and simulate your future pension. It’s free, and you can access it using your My Number or an access code from your annual pension statement (ねんきん定期便).

The most useful features:

Contribution history (加入記録の確認): month by month, how much you’ve contributed and under which scheme. You can spot any gaps or unregistered months that are worth correcting before they expire.

Future pension simulation (将来の年金額を試算する → かんたん試算): enter your target retirement age and the system calculates an estimate based on your actual contribution history. It’s the most reliable way to get a sense of what you’ll receive, whether you’re 10 or 30 years from retirement.

Annual statement (ねんきん定期便): if you haven’t received the paper version of your annual pension statement (sent in your birth month if you’re exactly 35 or 45, and in June for everyone else), you can access it online.

To register you’ll need your basic pension number (基礎年金番号, found on your pension booklet or annual statement) or you can link directly via My Number through the MyNaPortal app.

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What stays put even if you leave before 10 years

If you leave Japan having contributed fewer than 10 years and claim the lump sum, you give up any future pension rights in Japan. But if you accumulate 10 years or more and choose not to claim the lump sum, those rights are registered indefinitely. It doesn’t matter if you spend 20 years outside Japan before retiring — when the time comes, you can apply for the Japanese pension from any country.

You’ll need either an active Japanese bank account or, in countries with a bilateral agreement, a foreign account to which the transfer can be made. The Japan Pension Service website has specific instructions for each country’s procedures.

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FAQ

Am I required to contribute if I’m a foreigner? Yes. The obligation to contribute to Japan’s pension system applies to all residents regardless of nationality. There’s no exemption for being foreign, even if you’re already contributing to your home country’s system — unless a bilateral agreement explicitly says otherwise.

What happens if I don’t pay Kokumin Nenkin? Self-employed people and residents outside the company system who don’t pay Kokumin Nenkin accumulate unpaid months, reducing their future pension or potentially leaving them below the 10-year minimum. There are exemption and deferral options (免除・猶予) for low-income periods that are worth applying for, because exempt months count partially towards the total.

Can I continue paying Kokumin Nenkin voluntarily if I move abroad? Yes, through the voluntary overseas contribution scheme (任意加入). You can keep contributing to Kokumin Nenkin from outside Japan if you want to accumulate months up to age 65 to complete the maximum 40 years of contributions. This makes sense if you already have many years contributed and want to maximise the basic pension.

Does the lump sum cover everything I’ve paid in? Not exactly. The lump-sum calculation uses your average standard monthly remuneration and number of contribution months, with a cap of 60 months for the basic component. It’s not a literal sum of your contributions plus your employer’s — it’s a formula that generally returns less than the total paid in. The actual difference depends on how long and how much you’ve contributed.

How does Kosei Nenkin affect my Furusato Nōzei limit? Indirectly: Kosei Nenkin reduces your taxable income, which affects your residence tax (住民税), which is what the Furusato Nōzei limit is calculated on. The Furusato Nōzei calculator accounts for this deduction if you enter your full gross salary.

How do I know how many months I’ve contributed? In Nenkin Net, under 加入記録の確認. It also appears on your annual pension statement (ねんきん定期便), available by post or through the portal. The net salary calculator doesn’t have access to your personal contribution history, but it does show you what percentage of your salary goes to pension each month.

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I’ve been contributing to the Japanese system for 180 months — 10 months of Kokumin Nenkin during an initial transition when I first arrived, and 170 months of Kosei Nenkin as a company employee. When I first logged into Nenkin Net and saw the month-by-month history, it took me a moment to understand that the figure shown wasn’t an accumulated savings balance but an estimate of what I’d receive in the future, calculated from my real data. The distinction matters: this isn’t a savings account. It’s a future right that you build over time.

What surprised me most when I finally worked through the numbers properly was the scale of the employer contribution — you’re effectively contributing twice what you see on the payslip. That changes how you think about the whole system.

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Contribution rates and benefit figures updated for 2026. The basic pension amount (老齢基礎年金) is adjusted annually in line with price and wage indices. All figures in this guide are indicative — use Nenkin Net for your personalised estimate.