2016.June
Notification on the Annual Renewal of Labor Insurance
Following is the information on the annual renewal of the labor insurance premiums.
At the beginning of June, each company receives a green envelope from the labor standard office, enclosing documents about annual renewal of the labor insurance.
The deadline for the payment of labor insurance premiums is July 10th of each year.
仧What is the annual renewal of labor insurance?
Labor insurance premiums are calculated for the one-year period from April 1st to March 31th by multiplying the total wages paid to employees by the rate determined according to the type of business.
Companies are required to submit a report and pay premiums by July 10th.
This process is referred to as the “annual renewal of the labor insurance.”
The labor insurance here specifically means “the丂worker’s accident compensation insurance” and “the employment insurance.”
The rate for worker’s accident compensation insurance premiums differs depending on the type of business, ranging from 2.5/1000 to 88/1000. The premium is borne entirely by the company. As for the employment insurance premium, 3 rates are set for different types of business. Both the employer and employees pay the premiums with the rate for the employer being larger than the employees’.
The rates for general businesses in 2016 is 4/1000 for employers and 7/1000 for employees.
Please be sure to use the correct rate, which is reviewed annually.
1, Calculation Method
In July companies are required pay an estimated amount of premium. The fixed amount is calculated at the end of the fiscal year to adjust the balance.
The estimated premium is the total amount of annual wages to be paid to employees times the applicable insurance rate.
The fixed premium is calculated by multiplying the total amount of wages actually paid by the applicable insurance rate.
In the 2016 renewal, for example, the difference between the estimated premium for 2015 and the fixed premium for 2015 is figured out and the deficiency or the surplus is adjusted in the payment of 2017 estimated premium.
2, Contributions based on the Asbestos Relief Act
Based on the Act on Asbestos Health Damage Relief, a contribution for supporting asbestos victims is added to finalize the amount of payment. The amount of contribution is calculated by multiplying the fixed premium by the applicable rate, for instance, 0.02% in 2016.
3, Caution about penalty
A penalty might be imposed on companies who failed to pay by the due date.
That’s all for the outline of annual renewal of labor insurance.
SAWADA Human Resource Consulting Office
