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FinancePublished on 2026-06-20•4 min read

What is Nenkin? Japan's Pension System Explained for Expats

Understanding Japan's pension system is essential for every expat. Here's what Kosei Nenkin and Kokumin Nenkin mean for your wallet.

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If you work and live in Japan, you have likely seen 'Nenkin' (年金) deductions on your monthly payslip. Understanding Japan's national pension system is essential for every expat, whether you plan to stay long-term or return home in a few years.

The Two Categories of Japanese Pension

Japan operates a two-tiered pension system. Under national law, all residents aged 20 to 59 must participate in one of the following branches:

  • National Pension (Kokumin Nenkin - 国民年金): The flat-rate base tier. It covers self-employed individuals, students, unemployed residents, and spouses of corporate employees. Contributions are a flat monthly fee (around ¥17,000).
  • Employees' Pension Insurance (Kosei Nenkin - 厚生年金): The salary-linked tier. It covers corporate employees and public servants. Contributions are 18.3% of your salary, split 50/50 between you and your employer.
If you are employed by a company in Japan, your Kosei Nenkin premium automatically covers both your base tier (Kokumin Nenkin) and employees' tier. You do not need to make separate payments.

What Happens to My Contributions if I Leave Japan?

Expats who pay pension premiums for at least 6 months and leave Japan permanently can claim a Lump-Sum Withdrawal Refund (脱退一時金). This refund allows you to reclaim up to 60 months (5 years) of your contributions, minus a 20.42% income tax withholding on Kosei Nenkin.

Pro tip: You can reclaim the 20.42% tax withholding after leaving Japan by appointing a Tax Representative (納税管理人) before you depart. Use our Pension Lump-Sum Withdrawal Calculator to estimate your refund.

Social Security Agreements

If your country has a bilateral social security agreement with Japan, you may be able to merge your Japanese contribution periods with your home country's pension system to avoid double payments or qualify for retirement benefits.