Standard Monthly Remuneration in Japan: July Reset and Getsuhen

In Japan, health and pension premiums are not a percentage of each month's gross pay. They are a percentage of each employee's standard monthly remuneration (標準報酬月額, hyojun hoshu getsugaku), a graded amount fixed in advance. The employer resets it every year by filing the santei kiso report (算定基礎届, santei kiso todoke) by July 10. The report averages April, May and June pay, and the result applies from September to the following August. A fixed pay change during the year can trigger an earlier revision, called getsuhen.

Labour insurance works differently. Its premium is settled once a year on actual wages, through the annual renewal (年度更新, nendo koshin), which is due on the same July 10. The employee's employment insurance share is still deducted every payday, at the fiscal-year rate applied to that month's actual wages; only the employer's premium filing and payment is annual. For a group payroll team, the practical point is this: Japan deductions change on a statutory schedule, and they also move when allowances, overtime or exchange rates move, without anyone at HQ approving a change. This post explains the three mechanisms, what triggers each one, and who should own each step. For how the July 10 filings fit alongside every other recurring deadline, see our Japan payroll calendar of recurring deadlines and owners. For where these filings sit in the wider payroll process, see our guide to Japan payroll services, salary administration and statutory compliance.

What standard monthly remuneration is and what it drives

Standard monthly remuneration is a bracket. Monthly pay is placed into a grade, and the grade's fixed amount, not the actual pay, is multiplied by the premium rates. The Health Insurance Act (Art. 40) sets 50 grades, from JPY 58,000 to JPY 1,390,000. Employees' pension insurance uses 32 grades, from JPY 88,000 to JPY 650,000, according to the Japan Pension Service page on pension premiums.

For a Tokyo employee in Kyokai Kenpo, the rates applied to the grade amount are 9.85% for health insurance, 1.62% more for nursing care insurance from age 40 to 64, 0.23% for the child-care support levy, and 18.3% for pension, each split equally between employer and employee, per the Kyokai Kenpo Tokyo premium table from March 2026. The employer also pays a 0.36% child-rearing contribution on the pension grade, with no employee share.

Because the grade is fixed for a year, an employee's premium does not move when one month's pay is higher or lower. It moves only at the three points where the grade is set: on enrolment, at the July reset, and at a mid-year revision. Premiums for a month are due by the end of the next month, and the employer may deduct the prior month's premium from the current month's salary, according to the Japan Pension Service page on premium payment. Where the employer deducts the prior month's premium, a September grade change first appears in October payslips.

The July santei kiso report: April to June pay sets the year from September

Every employer reports the April, May and June pay of everyone it employs as an insured person on July 1, by July 10. The Japan Pension Service averages the three months and sets a new grade, the regular determination (定時決定, teiji kettei), which applies from September to the following August, according to its guidance on the annual determination. The rule itself is in Article 41 of the Health Insurance Act.

Who is in the report and which months count

• Included: every insured employee on payroll on July 1, including those aged 70 or over.
• Excluded: employees who joined on or after June 1, those who left on or before June 30, those whose grade is being revised from July under a mid-year change, and those for whom an August or September mid-year change has been declared.
• Months counted: only months with 17 or more paid days (11 or more for short-time workers at a covered large employer). A month below the threshold drops out of the average. For other part-time staff, if no month reaches 17 days, months with 15 or more count; if none does, the existing grade continues.
• Deadline: July 10, moving to the next business day when it falls on a weekend. When July 10 is a Saturday, the report is due the following Monday, July 12.

Where an employee's April to June pay is regularly out of line with the rest of the year, for example because of seasonal overtime, the employer can ask for the grade to be set on the annual average instead. That route needs an employer statement and the employee's written consent, filed with the report, per the same Japan Pension Service guidance.

What counts as remuneration

Remuneration is everything an employee receives as consideration for work on a regular basis. The Japan Pension Service page on pension premiums lists basic pay, incentives, overtime pay, and allowances including commuting, family, housing and position allowances. Housing and meals provided in kind also count, according to the Japan Pension Service leaflet on remuneration (reference 3). Bonuses paid four or more times a year are treated as monthly remuneration rather than as bonuses: under Health Insurance Act Art. 3(5) and (6), a bonus is pay received for periods longer than three months, so three times a year or fewer. Expense reimbursements, such as business travel costs, and one-off gifts, such as a wedding gift, do not count, per the same leaflet.

Two items surprise most HQ teams. Commuting allowance is in the base, even though it is exempt from income tax up to JPY 150,000 a month for public transport under the National Tax Agency's commuting allowance rules (No. 2582), so the tax view of pay and the social insurance view never match. And overtime paid in April, May and June feeds directly into the next year's grade. Our guide to Japan salary structure, allowances and bonuses covers how these components are usually set up.

Mid-year revisions (getsuhen): when a pay change cannot wait for July

A mid-year revision (随時改定, zuiji kaitei), filed on the monthly remuneration change report (月額変更届, getsugaku henko todoke) and called getsuhen in practice, resets the grade before the next July report. Under Article 43 of the Health Insurance Act and the Japan Pension Service guidance on mid-year revision, three conditions must all be met:

1. Fixed pay changed. Examples include a raise or pay cut, a switch from daily to monthly pay, a change in an hourly or daily rate or a commission rate, and a new fixed allowance or a change in its amount.
2. The average moved by 2 or more grades. The average of the three months starting with the month of the change, including overtime and other variable pay, must differ from the current grade by at least 2 grades. At the top and bottom of the table, 1 grade can be enough.
3. Each of the three months has 17 or more paid days (11 for short-time workers at a covered large employer).

The new grade applies from the 4th month: a change in April applies from July. The employer files promptly once the third month's pay is known. A revision applied by June runs until August; one applied from July runs until August of the following year. The test cuts both ways. If fixed pay rises but lower overtime pulls the average down by 2 grades, there is no revision. A retroactive raise counts from the month the back pay is paid, with the back pay itself left out of the average.

A worked example

A Tokyo employee aged 35 earns JPY 300,000 a month (health grade 22, pension grade 19 on the Kyokai Kenpo Tokyo table). From April, a new fixed housing allowance of JPY 40,000 is added, and April to June pay averages JPY 340,000. That falls in the JPY 330,000 to 350,000 band, health grade 24, two grades higher, so a getsuhen applies from July, deducted from August pay where premiums are deducted a month in arrears. Using the Kyokai Kenpo Tokyo table:

Employee share per month (JPY)	Grade JPY 300,000	Grade JPY 340,000	Change
Health insurance (9.85% of grade, half)	14,775	16,745	+1,970
Pension (18.3% of grade, half)	27,450	31,110	+3,660
Child-care support levy (0.23% of grade, half)	345	391	+46
Total employee deduction	42,570	48,246	+5,676

The employer's matching share rises by about the same amount, plus, under the Child and Child-rearing Support Act, the 0.36% contribution on the higher pension grade. Nobody decided to increase social insurance cost. HR approved an allowance, and the grade followed. If the getsuhen is not filed, the old grade keeps running and premiums for both sides are understated until someone notices.

Why deductions move without anyone at HQ deciding

Because the grade follows pay rather than policy, Japan net pay can change in September or after a getsuhen even when the group compensation system shows no change. These are the patterns we see most often when a global payroll vendor runs Japan pay from a group template.

Pay set in a foreign currency

Where pay is paid in a foreign currency, the yen amount for social insurance is the amount of foreign currency paid, converted at the exchange rate on the payment date, according to the Japan Pension Service leaflet on remuneration of employees working overseas. So an employee paid USD 2,200 a month averages JPY 319,000 at a hypothetical JPY 145 rate (health grade 23) and JPY 341,000 at JPY 155 (health grade 24). The exchange rate during April to June decides the grade for the next twelve months.

The Japan Pension Service list of fixed-pay changes for a getsuhen covers pay rates and allowances; it does not list exchange-rate movements. So the main way a currency swing reaches the grade is the July report. Finance should expect the September reset to track the yen in the spring, and the Japan subsidiary budget in yen should carry social insurance at the grade, not at a flat percentage of USD pay. Employees paid JPY 635,000 or more a month are already at the top pension grade, so for them only health insurance and the child-care support levy move.

Allowances added outside the payroll change process

A housing, family or relocation allowance approved in a global mobility system is fixed pay under the getsuhen test. If it reaches the vendor but not the sharoushi, the getsuhen is missed. The fix is a standing rule: every Japan pay change, including allowances, is copied to the sharoushi in the month it takes effect.

Spring overtime and April pay rounds

Where a Japan subsidiary runs its annual pay review in April, the raise falls inside the santei window. An April raise that moves the April to June average by 2 or more grades is handled by a July getsuhen, which takes that employee out of the July report. Smaller raises stay in the report. The sharoushi needs the list of April changes before preparing the July filing, or the same employee is reported twice. Heavy overtime in a spring busy season raises the grade for a full year, which is the case the annual-average route exists for.

The labour insurance annual renewal, due the same day

Labour insurance (workers' accident compensation insurance plus employment insurance) does not use standard monthly remuneration. It is paid once a year, on total wages (賃金総額, chingin sogaku) for the insurance year from April 1 to March 31, multiplied by the industry rate. That annual cycle is the employer's filing and payment: the employee's employment insurance share is still withheld from each payslip on that month's wages, under Article 32 of the Labour Insurance Premium Collection Act. The employer pays an estimated premium for the current year and settles the previous year's premium against actual wages, both by a deadline 40 days from June 1, which is July 10, under Articles 15 and 19 of the same Act. For fiscal 2026 the window ran from June 1 to July 10, 2026, according to the MHLW Chiba Labour Bureau notice.

Total wages include allowances and bonuses, before tax and social insurance deductions. Where the estimated premium is JPY 400,000 or more (JPY 200,000 where only one of the two insurances applies), it can be paid in three instalments, due July 10, October 31 and January 31, according to the MHLW Yamanashi Labour Bureau guidance on instalments. For general businesses from April 2026, the employment insurance part is 1.35% of wages, 0.85% employer and 0.50% employee, per the MHLW Yamanashi Labour Bureau rate notice for fiscal 2026.

The renewal and the santei report are separate filings to separate offices (the labour bureau and the pension office), but they draw on the same payroll data and are prepared together in June. The common trap for a group vendor is the period: the renewal needs April to March wage totals, while group payroll reports run January to December. Ask the vendor for an April to March wage report in May. Both filings can be made online; our post on e-Gov filing for social insurance and labour procedures covers the portal.

Who owns what, from April to October

The sequence below is the one we run for foreign-owned subsidiaries. The owners assume a global payroll vendor calculates pay and a licensed sharoushi (社会保険労務士, labour and social insurance consultant) files with the authorities. For how that split works across the rest of the payroll cycle, see our guide to running Japan payroll through a global payroll vendor.

When	Step	Owner	What goes wrong
April	Send the sharoushi every April pay and allowance change, with effective dates	HQ HR or Japan HR	Changes stay in the global HR system and getsuhen candidates are missed
May	Export April to March wage totals by employee for the labour insurance renewal	Payroll vendor	Vendor sends calendar-year totals
June to early July	Export April to June pay with paid days per month; flag joiners, leavers and getsuhen cases	Payroll vendor, checked by the sharoushi or AQ	Foreign-currency pay converted at a budget rate instead of the payment-date rate
By July 10	File the santei kiso report, July getsuhen reports and the labour insurance renewal; pay the first labour insurance instalment	Sharoushi files; Japan entity pays	Payment approval sits with HQ treasury past July 10
July to August	Receive the new grades and load them into the payroll system	Sharoushi or AQ; payroll vendor	No one owns the master-data update, so the old grades keep running
September	New grades apply to the September premium	Payroll vendor	Vendor applies the new grade to September pay instead of October pay, where premiums are deducted a month in arrears
October	Explain net pay changes to staff; pay the second labour insurance instalment by October 31	Japan HR; Japan entity	Employees query lower net pay with no explanation ready

Two decisions belong to HQ. The first is the change-notification rule: who sends Japan pay changes to the sharoushi and by when. The second is the cash plan: the July labour insurance payment and the October and January instalments should be accrued, so the Japan entity is not waiting on a group payment run. Our breakdown of what Japan payroll costs to run for a year shows where these payments sit in the annual budget. For how enrolment sets the first grade for a new hire, see our guide to enrolling employees in Japan's shakai hoken.

Working with AQ Partners. Our Tokyo team provides social and labour insurance enrolment, monthly payroll coordination with a licensed sharoushi, and the annual payroll statutory reports, including the santei kiso report, mid-year remuneration changes and the labour insurance renewal, for foreign companies operating in Japan. Book a consultation to review how your Japan pay changes reach the filings.