Ever wondered, “What is the social insurance premium deduction? Is it a way to reduce taxes?” This article will answer your questions and explain the basics of the social insurance premium deduction.
What is the Social Insurance Premium Deduction?
This deduction applies when you pay for health insurance or pension premiums. It reduces your taxable income after it’s calculated, which lowers the amount of tax you need to pay.
Two Ways to Pay for Social Insurance Premiums
1.Automatically Deducted from Your Salary
If you are an employee, you might not even notice that you are paying social insurance premiums. This is because your employer deducts them directly from your salary before you receive it.
2.Paying on Your Own
If you are self-employed, you are likely more aware of paying your social insurance premiums since they aren’t automatically deducted. Instead, you need to pay them yourself.
Basic Requirements for the Social Insurance Premium Deduction
Here are some key points to know about eligibility:
1.You Must Pay It Yourself
The deduction applies only to premiums you have paid yourself. If someone else paid on your behalf, you cannot claim the deduction. Similarly, premiums that remain unpaid, even after their due date, are not eligible. However, if you pay premiums for both your own insurance and that of your family members who share the same financial resources as you, the total amount is deductible.
2.The Premiums Must Be Eligible
Eligible premiums include:
- National Health Insurance
- National Pension Insurance
- Health Insurance
- Employee Pension Insurance
3.Includes Amounts Deducted from Your Salary
Not only are premiums you paid directly eligible for the deduction, but also premiums automatically deducted from your salary.
Important Note: Non-Residents
The social insurance premium deduction does not apply to periods when you are a non-resident of Japan.
Q&A
However, social insurance contributions paid in France may be eligible for the deduction if certain requirements are met.
If you have any questions, please feel free to reach out.
For more information about the prices of the services we offer, please refer to this article.
