October 20, 2009
Attn Wall Street Associates Dispatched Staff:
Due to government-mandated changes, we have adjusted the pay calculation for Health Insurance and Welfare pension for time worked beginning September 1st, 2009. This change would be reflected in your September pay slip, paid in October.
The key rate changes are as below:
- The Health Insurance premium was reduced from 8.2% to 8.18%. WSA pays 50% of the total amount nonetheless, so the positive impact on salary is only 0.01%.
- The Welfare Pension premium has been revised from 15.35% to 15.704%. You may notice a slight increase in the expense of Welfare Pension on your pay slip. The government will revise the Pension premium yearly in September to counter the aging population in Japan, and it should be expected to rise again next year.
Please note that the premiums are fixed at the percentages above, but the Social Insurance Agency has decided “salary bands” and calculates the percentage based on your salary band. For example, one band exists between 280,000 yen and 300,000 yen, so whether you earn 280,001 yen or 299,999 yen, your insurance would be calculated as if your salary was 290,000 yen.
The band is fixed on a yearly basis and is revised in September. Per industry practice, we have revised your band based on the average salary of April, May, and June 2009. If you notice a significantly larger or smaller payment for Health Insurance and Welfare Pension, it likely that your average salary for those 3 months qualified for the next highest or lowest salary band in the scheme.
For more information on the banding scheme, please see the Social Insurance Agency website.