National Health Insurance vs Company Social Insurance — What's Different and Which One Covers You
The conclusion first: it is not a choice — your status decides it
If you live in Japan with a residence status for more than 3 months, enrolling in public medical insurance is, in principle, mandatory. Which insurance you get is not something you choose — it is decided automatically by how you work.
- Company employees (employment meeting certain conditions) → mandatory enrollment in the company's 社会保険 (shakai hoken, social insurance — a set of health insurance + employees' pension)
- Freelancers, the self-employed, the unemployed, and most international students → obligation to enroll in your municipality's 国民健康保険 (kokumin kenko hoken, National Health Insurance, "kokuho")
There is no option of "premiums are a waste, so I won't join anything" — if you stay unenrolled and join later, premiums are collected retroactively as a rule, so the longer you leave it, the more you lose.
The premium calculation methods differ
| Social insurance (company employees) | National Health Insurance | |
|---|---|---|
| Basis of calculation | Monthly salary level (standard monthly remuneration) | Previous year's income |
| How you pay | Automatically deducted from salary | You pay directly via municipal payment slips |
| Employer's share | The company pays half | You pay the full amount |
| Dependents | No extra premium when registered as dependents | Charged per household member |
Two points to watch in particular:
- NHI is based on the previous year's income, so if you earned well last year and then quit or went independent this year, your premium stays high even though your income dropped. This often shocks people in their first year after going freelance.
- The treatment of dependents is exactly opposite. With social insurance, adding a spouse or children as dependents does not increase your premium, but NHI charges for each household member. If you have a family, this difference is significant. (This is a separate system from the tax dependent deduction — they are often confused, so understand it separately from the 👉 dependent deduction guide.)
Specific premium rates and caps differ by municipality, health insurance association, and year, so this article does not cover them. For an estimate of your take-home pay and social insurance premiums based on your salary, see the 👉 net salary calculator.
The trap of the gap between jobs
When you leave a company, your social insurance eligibility ends on your resignation date. If there is a gap before joining the next company, during that period you must choose one of:
- Enrolling in NHI (apply yourself at the municipal office — it does not switch over automatically)
- Voluntary continuation (任意継続) (a system to keep your pre-resignation social insurance for a certain period at your own expense — check your health insurance association's guidance for conditions and deadlines)
- Being registered as a dependent on your spouse's social insurance (if you meet the income requirements)
If you do nothing, an uninsured gap arises, and when you later enroll in NHI you will be billed retroactively for the gap period as well. The rule is to file with your municipality within 14 days once your resignation is set, so do not put it off.
Students and low earners
Most international students fall under National Health Insurance. If you have no or little income, there are systems for applying for premium reductions (they vary by municipality), so if the billed amount is a burden, do not ignore it — first check at the municipal office whether you can apply for a reduction. Also note that in many municipalities, if you do not file (a declaration of the previous year's income), the reduction cannot even be assessed.
Frequently asked questions
Q. I am a part-timer but got enrolled in social insurance. Why?
If your working hours, contract period, and other factors exceed certain conditions, you become subject to social insurance regardless of employment type. For the details of the conditions, check with your workplace or the pension office.
Q. Is the hospital co-payment the same 30% either way?
The co-payment ratio is applied the same way by age bracket. The difference lies in the monthly premiums you pay.
Q. I am leaving Japan for good — what do I do about NHI?
Before departure, you need to complete the loss-of-eligibility procedure at your municipality together with the move-out notification. If you do not, premiums may continue to be charged.
This article explains the general structure of the system; specific figures such as premiums and reduction criteria differ by municipality, health insurance association, and year. For individual cases, check with your municipal office, the pension office, or a specialist such as a licensed social insurance consultant (sharoushi).