The "income wall" that people worry about when working part-time or as an arbeit worker. In fact, the tax wall and the social-insurance wall (106万円 and 130万円) are completely different things. In particular, once you cross the social-insurance wall, you have to start paying your own insurance premiums, so your take-home pay can temporarily fall — the "working at a loss" phenomenon that easily occurs. At the same time, a major revision will take place in 2026. This article organizes how the 106万円 and 130万円 walls each work, the latest reforms, and how to think about working without losing out.
In October 2026, people who work 20 hours or more a week at companies with 51 or more employees will join social insurance regardless of their annual income (the 106万円 wall — the wage requirement — is scheduled to be abolished, effectively leaving a "20-hours-a-week wall"). The 130万円 wall remains for the time being, but since April 2026 it can be assessed from the content of your employment contract. Once you leave dependent status, the National Pension alone costs 17,920 yen a month (FY2026).
The "tax wall" and the "social-insurance wall" are different things
There are two systems of "income wall." Confusing them leads to wrong decisions.
| System | Main walls | What happens when you cross it |
|---|---|---|
| Tax wall (2026 tax year) | Income tax on you starts only above a salary of 178万円 (basic deduction 104万円 + minimum employment income deduction 74万円). The income requirement for dependent relatives, same-household spouses, and the spousal deduction is 62万円 or less (a salary of 136万円 or less). The special spousal deduction covers more than 62万円 up to 133万円 (a salary of more than 136万円 up to 207万円)[National Tax Agency (in Japanese)] | Income tax on you / reduction of the spousal deduction and special spousal deduction (gradual) |
| Social-insurance wall | 106万円 and 130万円 | You join social insurance and premium payments arise |
The tax wall is explained in From the 103万円 wall to the 123万円 wall, which also covers the 136万円 and 178万円 figures for the 2026 tax year. Here we look at the social-insurance wall.
The 106万円 wall (joining social insurance at your part-time workplace)
This is the threshold for joining social insurance (employees' pension and health insurance) at your workplace. If you meet all of the following conditions, you join and premiums are deducted from your salary.
① Prescribed wages of 8.8万円 or more a month (≒ 106万円 a year; the wage requirement)
② Prescribed working hours of 20 hours or more a week
③ A workplace with 51 or more employees (the number of employees' pension insured persons; the company-size requirement)
④ Not a student
On top of these, you must be expected to be employed for more than 2 months.
In October 2026, the 106万円 wall becomes the "20-hours-a-week wall"
Because the FY2025 regional minimum wage exceeded 1,016 yen an hour in every prefecture, everyone working 20 hours or more a week automatically becomes covered by social insurance. On that basis, under the 2025 pension system reform act, the wage requirement (a monthly wage of 8.8万円) is scheduled to be abolished in October 2026[Ministry of Health, Labour and Welfare (in Japanese)]. After abolition, if you meet the conditions of 20 hours or more a week, expected employment of more than 2 months, not a student, and a company with 51 or more employees, you join social insurance regardless of your annual income. In other words, the real dividing line becomes not "income" but your weekly working hours[Ministry of Health, Labour and Welfare (in Japanese)].
Furthermore, the company-size requirement (51 or more employees) will also be phased out from October 2027, and all companies are scheduled to be covered by 2035. The trend is for more and more short-time workers to join social insurance. This abolition coincides with the October 2026 minimum-wage hike, so both your hourly wage and your working hours are affected — see the minimum wage and 106万円 wall double reform for estimates.
For short-time workers with a standard monthly remuneration of 12.6万円 or less who newly join social insurance at a workplace with 50 or fewer employees, a program begins under which, if labor and management so agree, the company additionally bears part of the employee's share of premiums, easing the drop in take-home pay for up to 3 years. The company's additional burden is fully supported by the program, so it is designed not to increase the company's final burden either[Ministry of Health, Labour and Welfare (in Japanese)]. The one newly paying premiums is the worker. If your workplace is small and you are worried that "joining will cut my take-home pay," it is worth asking your company whether this program can be used (see the Japan Pension Service's guidance for details and procedures). Who qualifies, a guide to the relief amounts, and how to ask your company are covered in detail in our guide to the premium adjustment program.
The whole picture of social-insurance coverage (from October 2026)
Whether you are covered is decided by how you work, not by how much you earn. Here is what changes, condition by condition.
| Condition | Content | Treatment from October 2026 |
|---|---|---|
| Regular employees (the "three-quarters" standard) | Working in a way that meets the "three-quarters" standard at your workplace | Even if your annual income is under 130万円, if you meet the three-quarters standard or the four requirements for short-time workers, you become an insured person of the employees' pension and health insurance[Japan Pension Service (in Japanese)] |
| Working hours | Prescribed working hours of 20 hours or more a week | Remains as a requirement, and becomes the real dividing line. Even under 20 hours a week, if working 20 hours or more continues for more than 2 months you may become covered[Ministry of Health, Labour and Welfare (in Japanese)] |
| Wages | Prescribed wages of 8.8万円 or more a month | Scheduled to be abolished in October 2026[Ministry of Health, Labour and Welfare (in Japanese)] |
| Company size | A workplace with 51 or more employees (employees' pension insured persons) | Will be scaled back and abolished in stages over the next 10 years (see the table below)[Ministry of Health, Labour and Welfare (in Japanese)] |
| Students | Not being a student | One of the current four requirements. No plan to abolish or narrow it has been announced |
| Employment period | Expected to be employed for more than 2 months | Likewise, no change has been announced |
The staged scaling back and abolition of the company-size requirement
| Company-size requirement | Effective from |
|---|---|
| 51 or more employees | Now |
| 36 or more employees | From October 2027 |
| 21 or more employees | From October 2029 |
| 11 or more employees | From October 2032 |
| 10 or fewer employees (= effectively abolished) | From October 2035 |
Source: MHLW, "Key points of the expansion of social insurance (health insurance and employees' pension) coverage for short-time workers" (prepared January 2026)[Ministry of Health, Labour and Welfare (in Japanese)]
The Minimum Wage Act allows a reduced minimum wage to be permitted in certain cases, and short-time workers covered by that exception whose monthly wage is under 8.8万円 will, in principle, not join social insurance (they may still join voluntarily on application)[Ministry of Health, Labour and Welfare (in Japanese)].
For sole-proprietor workplaces, coverage expands beyond the 17 statutory industries employing 5 or more people to all industries employing 5 or more people on a regular basis. However, workplaces already in existence when this takes effect in October 2029 are excluded for the time being[Ministry of Health, Labour and Welfare (in Japanese)].
The 130万円 wall (leaving your dependent status)
Even for people who are not covered by the 106万円 rule, once your annual income reaches 130万円 or more, you leave the social-insurance dependent status of your spouse or another person and join the National Pension and National Health Insurance (or your workplace's social insurance) yourself. This applies to everyone regardless of company size. For the conditions of dependent status itself — how income is counted, procedures, and how it differs from the tax-side definition — see health insurance dependents.
If your dependent-certification date is on or after April 1, 2026 and your income is salary only, the assessment can be made from the annual income expected from the content of your employment contract, such as a working conditions notice. Those wages include allowances and bonuses. If no other income is expected and — living together — it is less than half of the insured person's annual income (or, living apart, less than the support you receive), you are in principle treated as a dependent[Japan Pension Service (in Japanese)]. Even if the conventional counting method puts you over the threshold, you may still be certified if the contract itself does not exceed it.
It cannot be used when: ① the contract period is under one year counting from the day you became a dependent; ② the working hours are unclear, for example "according to shifts"; or ③ the amount of an allowance is unclear, for example "commuting allowance: yes." The filing needs both a document showing the content of the contract and a written statement that your income is salary only[Japan Pension Service (in Japanese)].
The fine print of the 130万円 assessment
130万円 is not "how much you earned last year." It is judged on the expected annual income from the point you qualify as a dependent and from the certification date onward. If you have salary income, 108,333 yen or less a month meets the requirement; for recipients of employment insurance and the like, 3,611 yen or less a day[Japan Pension Service (in Japanese)]. Conversely, once a basic allowance of 3,612 yen or more a day starts being paid, you must file to be removed as a dependent[Japan Pension Service (in Japanese)].
| Person entering dependent status | Annual income threshold | Since when |
|---|---|---|
| General rule | Under 130万円 (108,333 yen or less a month / 3,611 yen or less a day for recipients of employment insurance and the like) | —[Japan Pension Service (in Japanese)] |
| Aged 60 or over, or a person with a disability roughly equivalent to the eligibility requirements for the disability employees' pension under the Employees' Pension Insurance Act | Under 180万円 | —[Japan Pension Service (in Japanese)] |
| Aged 19 or over and under 23 (excluding the insured person's spouse) | Under 150万円 | Certification dates on or after October 1, 2025. Age is judged as of December 31 of the year containing the certification date[Japan Pension Service (in Japanese)] |
* Monthly and daily guides are published only for the 130万円 bracket. No monthly equivalents are given for 180万円 or 150万円, so check those against your expected annual amount.
Even below the income ceiling, your income must be less than half of the insured person's income if you live together, or less than the support you receive from them if you live apart. Even at half or more, you may still become a dependent if your income does not exceed the insured person's annual income and the Japan Pension Service, weighing the household's circumstances as a whole, finds that the insured person plays the central role in supporting it[Japan Pension Service (in Japanese)]. For dual-income couples, children are certified as dependents of whichever parent has the higher annual income, regardless of how many dependents there are[Japan Pension Service (in Japanese)]. How to choose is covered in which parent should claim the child.
Not just salary. Employment insurance unemployment benefits, public pensions, and health insurance injury-and-sickness allowance and maternity allowance are all counted. Self-employment income is measured after deducting the expenses necessary to carry on the business[Japan Pension Service (in Japanese)].
Even if you temporarily exceed 130万円 through overtime and the like, a mechanism that has continued since October 2023 lets you remain a dependent if your employer certifies that it is "a temporary fluctuation in income"[Ministry of Health, Labour and Welfare (in Japanese)]. It can be used up to two consecutive times; where income is checked once a year, using the certification in each of two consecutive years is what "two consecutive times" means[MHLW Q&A (in Japanese)].
What counts as temporary is overtime pay or an ad-hoc busy-season allowance — for example, when another employee's leave or resignation increased your workload, when orders were unusually strong, or when a sudden large project came in. By contrast, a raise in base pay, a newly created permanent allowance, or an increase in the contracted working hours or days is not covered[MHLW Q&A (in Japanese)]. No upper amount is specified, on the grounds that it "could become a new income wall"[MHLW Q&A (in Japanese)].
The premiums you pay from the month you leave dependent status
If you leave dependent status and do not join your workplace's social insurance, you pay the National Pension (Category 1 insured person) and National Health Insurance yourself. Here is the breakdown.
| Insurance | Amount | What to keep in mind |
|---|---|---|
| National Pension | 17,920 yen a month (FY2026) 18,290 yen a month (FY2027) | The same nationwide. Due by the end of the month following the month covered. The full amount is deductible as social insurance premiums. You can also add the 400-yen monthly additional premium to raise your future basic old-age pension[Japan Pension Service (in Japanese)][Ministry of Health, Labour and Welfare (in Japanese)] |
| National Health Insurance | Varies by municipality | Each municipality sets its rates and per-capita levy by ordinance, so there is no nationwide guide. Check your own municipality's NHI page |
Example: Nerima City, Tokyo, FY2026, salary of 140万円, age 39, single
Employment income = 140万円 − 74万円 (employment income deduction) = 66万円
Assessment base income = 66万円 − 43万円 (the resident tax basic deduction) = 23万円
Medical portion = 23万円 × 7.51% + per-capita 47,600 yen = 64,873 yen
Elderly support portion = 23万円 × 2.80% + per-capita 17,600 yen = 24,040 yen
Child-care support portion = 23万円 × 0.27% + per-capita 1,873 yen = 2,494 yen
Annual NHI premium ≒ 91,400 yen (about 7,600 yen a month)
Together with the National Pension's 17,920 yen, that is about 25,500 yen a month. People aged 40 to 64 also pay the long-term care portion (assessment base income × 2.43% + per-capita 17,800 yen). Rounding follows each municipality's rules, so the actual notice may differ slightly[Nerima City (in Japanese)].
① Filing to leave dependent status: through the insured person's employer, submit the "Health Insurance Dependent (Change) Notification / National Pension Category 3 Insured Person Notification" to the Japan Pension Service. This removal filing is required when annual income of 130万円 or more (180万円 or more for those aged 60+ or with a disability) is expected[Japan Pension Service (in Japanese)].
② Switching to the National Pension: submit the "National Pension Insured Person Notification (Application)" to the city, ward, town, or village office where you live. When you switch because you left a job, the deadline is within 14 days of the day after your last day of employment[Japan Pension Service (in Japanese)].
What triggers leaving dependent status, and the cost from that month on, are laid out in what a Category 3 insured person is, and the seven triggers for leaving.
The true nature of "working at a loss," and how to think about not losing out
Once you cross the social-insurance wall, premiums (about 15% of salary) are deducted, and right after crossing it your take-home pay can temporarily fall. This is the phenomenon called "working at a loss." However, keeping the following two points in mind changes the judgment.
- Work above a certain level and your take-home pay reverses: If you increase your annual income until it exceeds the premium burden (as a guide, around 150–160万円 a year), your take-home pay exceeds what it was before joining. Holding back halfway can be the most wasteful case.
- Joining social insurance also has merits: Your future pension increases through the employees' pension, and your protection also becomes fuller — injury and sickness allowance for illness or injury, maternity allowance at childbirth, and so on. Health insurance premiums and employees' pension premiums are split with the company.
① The premium adjustment program (from October 2026): As described above, for people with a standard monthly remuneration (the bracket of monthly salary used as the basis for premium calculation) of 12.6万円 or less, a program begins that, by labor-management agreement, lets the employer additionally bear part of the person's own premiums for the first 3 years.
② The income-wall support-strengthening package (in effect): Existing support measures that curb the fall in take-home pay, such as the social-insurance application promotion allowance and the career-up subsidy. In either case, ask your workplace.
FAQ
What is the difference between the 103万円 wall and the 106万円 wall?
103万円 is the old name for the tax wall. For the 2026 tax year, income tax on you starts only above a salary of 178万円, and the threshold for dependent relatives and the spousal deduction has widened to a salary of 136万円 or less. The 106万円, on the other hand, is the wall for joining social insurance — a completely different system, with a different impact when you cross it.
Will the 106万円 wall disappear?
Yes, it will. In October 2026, the monthly-wage requirement of 8.8万円 (106万円 a year) is scheduled to be abolished, and from then on whether you work 20 hours or more a week becomes the real dividing line. The company-size requirement of 51 or more employees is also scheduled to be phased out from October 2027.
From October 2026, will I be covered for joining social insurance?
You are covered if you meet all four of the following: ① prescribed working hours of 20 hours or more a week ② expected employment of more than 2 months ③ not a student ④ working at a company with 51 or more employees. The amount of annual income becomes irrelevant. Even at companies that don't meet ④, coverage will expand gradually from October 2027 onward.
If I temporarily exceed 130万円, do I always leave my dependent status?
For a temporary income increase due to overtime and the like, there is a special provision that, with your workplace's employer's certification, lets you remain a dependent for up to two consecutive times (a maximum of 2 years). A permanent income increase is not covered.
How much do I pay each month after leaving dependent status?
If you do not join your workplace's social insurance, you pay the National Pension at 17,920 yen a month (FY2026; 18,290 yen in FY2027) plus National Health Insurance. NHI varies by municipality: at Nerima City's FY2026 rates, a single 39-year-old with a salary of 140万円 pays roughly 91,400 yen a year (about 7,600 yen a month). All in, about 25,500 yen a month is the guide.
Is joining social insurance a loss?
Right after crossing the wall your take-home pay can temporarily fall, but if you work above a certain level it reverses, and you also gain protections such as an increased future pension, injury and sickness allowance, and maternity allowance. Premiums are split with the company.
Summary
Reference links (sources)
This article is based on materials from the following public bodies (neutral, primary sources). Systems are revised, so please check the latest content before deciding.
- Ministry of Health, Labour and Welfare — Response to the "income wall" (in Japanese) (Q&A on employer certification for dependent certification (in Japanese))
- Ministry of Health, Labour and Welfare — On expanding social-insurance coverage (in Japanese)
- MHLW — Key points of the expansion of social-insurance coverage for short-time workers, January 2026 (in Japanese)
- Japan Pension Service — Procedures for making a family member a dependent (in Japanese)
- Japan Pension Service — Dependent certification using annual income from the employment contract, from April 1, 2026 (in Japanese)
- Japan Pension Service — National Pension premiums (in Japanese) / MHLW — FY2026 pension revision (in Japanese)
- National Tax Agency — Outline of the April 2026 withholding income tax revisions (in Japanese)
* This article is general information, not tax or social-insurance advice. For individual decisions, please confirm with your workplace, a pension office, or a professional.
