Premium Calculations

This section provides important information that you should keep in mind about how the system determines:

  • Premium calculations from salary.

  • Premium calculations from bonus.

  • Premium deductions for enrollments and terminations.

  • Employer contributions.

Premium Calculations from Salary

The social insurance premiums for monthly salaries are calculated based on the monthly standard remuneration as of the end of the month, then deducted from the salaries that are paid in the following month.

The social insurance premiums that are deducted from salaries are calculated based on the values of the following data as of the end date of the month previous to the month in which payment is made:

  • Employee's monthly standard remuneration.

  • Standard Remuneration Grade table.

  • Premium rates that are set up for the establishment on the SI Premium Rates page.

  • The employee's social insurance data that is entered on the Maintain Social Ins Data JPN page.

This means that for premiums deducted in May, the system uses values with an effective date as of April 30 of the same year. Make sure that the data that is effective at the end of a month is the data that you want to use for calculating premiums that are deducted in the following month.

Note:

The social insurance premiums are calculated based only on the monthly standard remuneration as of the end of the month; the actual salary payment in that month does not affect the premiums at all.

Premium Calculations from Bonus

The social insurance premiums that are deducted from bonuses are calculated based on the values of premium rates that are set up for the establishment on the SI Premium Rates page with the effective date as of the end of the month when the bonus is paid. The standard bonus remuneration that is used for the calculation is the actual gross bonus amount truncated to the nearest thousand yen. The standard bonus remuneration is subject to caps for health insurance and employees pension insurance.

Premium Deductions for Enrollments and Terminations

The system checks the employee's social insurance data to determine whether an enrollment or termination change reason exists in the month of payment or the previous month. If an enrollment or termination change reason exists, the system calculates the appropriate deduction from salaries.

Note that the social insurance termination data must be entered before the payee's last payments are processed.

For example, an employee's last day is May 10 and the pay period of her last payment is from April 16 through May 15. The payroll is processed on May 20. In this example, before her last payment is processed on May 20, you must enter her social insurance termination data with an effective date of May 11.

Employer Contributions

The system includes the payer social insurance flag variable (SC VR CALC ER FLG), which indicates if the employer contributions are calculated. If this flag is selected, the system calculates the following premiums for employers and employees:

  • Health insurance.

    The system calculates the employer contribution of health insurance as variable SC VR HEL CO and saves the data in the writable array GPJP WA SCRPT.

  • Nursing care insurance.

    The system calculates the employer contribution of nursing case insurance as variable SC VR NUR CO and saves the data in the writable array GPJP WA SCRPT.

  • Pension insurance.

    The system calculates the employer contribution of pension insurance as variable SC VR PEN CO and saves the data in the writable array GPJP WA SCRPT.

  • Pension fund.

    The system calculates the employer contribution of pension fund as variable SC VR FND CO and saves the data in the writable array GPJP WA SCRPT.

You can set contribution rates for health, nursing care, pension, and pension fund insurance premiums on the SI Premium Rates page.

See SI Premium Rates JPN Page.

In addition, the system calculates the contribution for child benefit. This contribution is based on the total pension remuneration and is calculated as part of the Social Insurance Check report.

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