Premium rates of the employment insurance are reviewed annually based on the financial state of the program. This article looks over the premium rates for FY2025 and wage items relevant to employment insurance.
[1] Premium rates for FY2025
The employment insurance system’s finance was affected temporarily by the COVID19 pandemic but the situation seems to be improving. As in the table below, the rates for FY2025 have been lowered from the previous year.
Employment insurance premium rates for FY2025
|
|
Employees |
Companies |
Total |
|
General businesses |
5.5/1,000 |
9/1,000 |
14.5/1,000 |
|
Agriculture, forestry, fisheries, refined sake manufacturing |
6.5/1,000 |
10/1,000 |
16.5/1,000 |
|
Construction |
6.5/1,000 |
11/1,000 |
17.5/1,000 |
[2] Base salary for the calculation of employment insurance premiums
Salary items used for the calculation of employment insurance premiums include wages, allowances, bonuses and other remunerations paid by companies in exchange of labor. Items like housing and family allowances are excluded from the base salary, which is used for the calculation of overtime wages, but these items are also taken into account when calculating employment insurance premiums.
In the case of material compensation, rather than payment in a currency, items for which a charge is collected from employees will not be included in the premium calculation. However, if the charge is less than one-third of the cost, the difference between the collected charge and the cost will be treated as a wage. If a company collects a charge exceeding one-third of the cost, the item is considered as in-kind payment.
[3] Wages to be stated in the letter of separation
A letter of separation issued for an employee who leaves a company indicates wages used for the calculation of employment insurance premiums, excluding “wages paid in special circumstances” and “wages paid for a period exceeding three months.”
“Wages paid in special circumstances” refers to items paid only occasionally or whether it is paid is uncertain. “Wages paid for a period exceeding three months” are bonuses offered in addition to monthly salaries up to three times a year.
In the case a company pays bonuses four or more times in a year, based on the employment rules, the bonuses will not be not treated as “wages paid for a period exceeding three months,” and therefore must be stated in the column of “special notes on wages” in a letter of separation.
Please check which wage items are used for the calculation of employment insurance premiums or should be included in a letter of separation and ensure your procedure is in line with the rules.
Reference
The Ministry of Labour, “FY2025 employment insurance premium rates”
https://www.mhlw.go.jp/content/001401966.pdf
“Employment insurance procedure guidelines”
https://www.mhlw.go.jp/stf/seisakunitsuite/bunya/0000131698.html
