Business | Sep 27

'Income ceiling' holding Japan's part-time workers back

TOKYO, Sep 27 (News On Japan) - Part-time employees in Japan are limiting their working hours to avoid the burden of social insurance premiums, creating an income ceiling beyond which they are unwilling to work.

Many businesses in Japan that rely on part-time workers such as supermarkets are currently facing a serious shortage of workers, with the "¥1.3 million income ceiling" being a significant factor behind this.

When the annual income of a worker who is financially dependent on their spouse exceeds ¥1.3 million, they are no longer covered by health insurance as a dependent family member. Instead, they have to pay health insurance and pension premiums on their own, which results in additional payments of about ¥300,000 annually.

To avoid crossing this ceiling, there has been an increase in part-time employees reducing their annual working hours.

To alleviate the issue, the government is considering allowing individuals to remain dependents for up to two years, even if their annual income exceeds ¥1.3 million temporarily.

However, experts argue that a long-term solution is necessary and that simply encouraging more work for one year will not resolve the income ceiling issue.

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