Excessive Health Insurance deductions reimbursement 国民健康保険料

[Moneymatters]

Class 2 Employee (yet still 3rd class citizen in my house..)

Thanks to TkyDon (I'm sure I'm gonna owe them a favor I can't refuse eventually..)
I've been looking into the health insurance payments I make.

Nice problem to have. But it looks like I get deducted the max amount monthly for;
Health Insurance 医療分,
Over 75 care　後期高齢者支援金分 and
Nursing care　介護 as I'm between 40-65 (based on documented age).

This is fine.

But then I get a bonus in Dec and they take a really large chunk for those health deductions again.
Then from Jan they go back to deducting the max.
These deductions when combined are far above what should be the maximum for the year.

I'm confused why such a huge deduction from the bonus.
If these are supposed to be calculate in arrears based on previous tax filings..
I could ask the company payroll agent but I'm increasingly convinced my ancestors wronged theirs many generations ago and.. well. It seems there are issues to be resolved.. So I thought I'd try here first.

Question 1.
As I'm doing my own tax returns, is any over payment of the above health insurance payments part of the rebate?

Question 2.
Is there a way to see how my rebate from the kakutei shinkoku is calculated? I just seem to see a total amount..

[adamu]

I believe all the insurance payments are deductible from income, so effectively tax free.

So, you still pay the premiums, but you don't pay income tax on them.

Not sure how the premiums themselves are calculated.

https://kaikei7.com/ was great for me for figuring out a bunch of stuff. But you need to spend 50% of the time again figuring out how to use it.

If I get my full Furusato Nozei rebate applied to residence tax in May, I'm going to be buying kaikei7.com a coffee or 20.

[Tkydon]

The calculation of National Healthcare Premiums - Kokumin Kenko Hoken - depends entirely on where you live.

From my investigation, every City or Ward seems to be different, with different Per Household and Per Insured Person amounts, and Percentage of Last Year's Taxable Household Income for each category, but the maximum amounts across all three categories seem to be the same nationwide.

1. For medical care (Basic fund for the National Health Insurance)
Maximum Household Limit: 650,000 yen per year

2. For Latter Life support (Financial support for the Medical Insurance System for the Elderly Aged 75 and Over)
Maximum Household Limit: 220,000 yen per year

3. For nursing care (Nursing-care insurance premiums for people aged 40 to 64)
Maximum Household Limit: 170,000 yen per year

Total Maximum Household Limit: 1,040,000 yen per year...

If you are in employment and paying NHI through withholding from your paycheck, then deductions will be calculated for the year on the previous year's income and deducted tax free every month.

If you are paying more than the Maximum Household Limit in any category in any one year (May to April ??), you might want to call the Pension Office in your City or Ward to ask them about the excess, bearing in mind that the income related portion of the NHI Premiums is calculated on last year's income declared in the Kakutei Shinkoku in March after the end of the Tax Year, and then the new NHI Premiums come into force in May, and then the new Residents' Tax payments come into force in July...

On the other hand, if you are a member of a Healthcare Union through your employer, or the Shigaku Kyousai for Private Education Workers, then I do not know the details... I found this Premium Table for 2023/24

https://www.pmac.shigaku.go.jp/en/about ... 202308.pdf

For Shigaku Kyousai, it seems members pay half the premiums (tax free) and the employer pays half the premiums (tax free) to the max on a purely % of Income basis...

Short Term Premium = I/2 of 8.819% = 4.409% Max 61,292 per month or 1/2 of 8.764% = 4.382% Max 60,910 per month or 730,920 per year???
Nursing Care Premium = 1/2 of 1.667% = 0.834% Max 11,655 per month or 139,860 per year
Welfare Premium = 1/2 of 0.195% = 0.097% max 1,355 per month or 16,260 per year ???
Total Max = 887,040 per year...

Am I reading that correctly??

Health Insurance Unions will also have their own Premium Calculation methods and tables.

All premiums are paid out of Pre-Tax Income, so are already deducted, so you cannot get an additional tax deduction...

[Moneymatters]

Thanks for the responses. I did check what my ward limits were.

I think I've worked it out. It's the Bonus. I found this comment in the small print here..

https://www.kyoukaikenpo.or.jp/~/media/ ... 3tokyo.pdf

賞与にかかる保険料額
　賞与に係る保険料額は、賞与額から1,000円未満の端数を切り捨てた額（標準賞与額)に、保険料率を乗じた額となります。
　また、標準賞与額の上限は、健康保険は年間573万円（毎年4月1日から翌年3月31日までの累計額。）となり、厚生年金保険と子ども・子育て拠出金の場合は月間150万円となります。　

So I'm reading that as Bonus is another conversation entirely outside the scope of annual limits on salary based health insurance deductions.
With it's own annual limit of 573man.

https://www.obc.co.jp/360/list/post347

Huzzah!

There is even a table with bonus 50man example showing the calculations that apply to the bonus deductions.
A different method than the standard salary deductions.
These match exactly with the deductions from bonus that I see personally..

So the annual limit of deductions against salary is 1,070,000(or whatever) but they can come at you again for bonus deductions! Up to about another 340,000.

The link seems to talk about companies steering more compensation into bonuses as a means of tax reduction...

When I get chance I'll add some detail about the various deductions and limits to the wiki.

I still have no idea where my rebate comes from.
It's always way higher than I think it should be which is strangely disconcerting..

[Tkydon]

If you have paid for something that is tax deductable, then the amount you paid is the from Net Income After Tax; i.e.the remaining amount after deducting your marginal rate of income tax and reconstruction tax

Income Tax Rates 総所得金額の合計、復興特別所得税、住民税の税率
Band (Taxable Income) = Marginal Tax rate (％) National + Reconstruction + Residents' Taxes + Health Insurance = Total - Max National & Residents' Taxes in Band Yen
Under 1,949,000 = 5% + 0.105% + 10% + = 15.105% = Y97,705 + Y195,000
1,950,000 to 3,299,000 = 10% + 0.21% + 10% = 20.21% = Y135,284 + Y135,000
3,300,000 to 6,949,000 = 20% + 0.42% + 10% = 30.42% = Y731,553 + Y365,000
6,950,000 to 8,999,000 = 23% + 0.483% + 10% = 33.483% = Y472,490 + Y205,000
9,000,000 to 17,999,000 = 33% + 0.693% + 10% = 43.693% = Y982,158 + Y900,000
18,000,000 to 39,999,000 = 40% + 0.84% + 10% = 50.84% = Y8,818,480 + Y2,200,000
Over 40,000,000 = 45% + 0.945% + 10% = 55.945% No Limit...

So, if you are in the 23% Tax Bracket, 23.483% then 100% Pre-Tax - 23.483% = 76.517% remaining after tax...
If you set the post-tax remainder to 100% then the Pre-Tax Amount was the reciprocal of that: 100%/76.517% = 130.6899% x After Tax Amount
So you paid tax of 30.6899 per Y100 or Y3,068.99 per Y10,000 of After Tax Amount.
That is what you get refunded.

[Moneymatters]

If you have paid for something that is tax deductable, then the amount you paid is the from Net Income After Tax; i.e.the remaining amount after deducting your marginal rate of income tax and reconstruction tax

Income Tax Rates 総所得金額の合計、復興特別所得税、住民税の税率
Band (Taxable Income) = Marginal Tax rate (％) National + Reconstruction + Residents' Taxes + Health Insurance = Total - Max National & Residents' Taxes in Band Yen
Under 1,949,000 = 5% + 0.105% + 10% + = 15.105% = Y97,705 + Y195,000
1,950,000 to 3,299,000 = 10% + 0.21% + 10% = 20.21% = Y135,284 + Y135,000
3,300,000 to 6,949,000 = 20% + 0.42% + 10% = 30.42% = Y731,553 + Y365,000
6,950,000 to 8,999,000 = 23% + 0.483% + 10% = 33.483% = Y472,490 + Y205,000
9,000,000 to 17,999,000 = 33% + 0.693% + 10% = 43.693% = Y982,158 + Y900,000
18,000,000 to 39,999,000 = 40% + 0.84% + 10% = 50.84% = Y8,818,480 + Y2,200,000
Over 40,000,000 = 45% + 0.945% + 10% = 55.945% No Limit...

So, if you are in the 23% Tax Bracket, 23.483% then 100% Pre-Tax - 23.483% = 76.517% remaining after tax...
If you set the post-tax remainder to 100% then the Pre-Tax Amount was the reciprocal of that: 100%/76.517% = 130.6899% x After Tax Amount
So you paid tax of 30.6899 per Y100 or Y3,068.99 per Y10,000 of After Tax Amount.
That is what you get refunded.

Apologies. I haven't been clear enough...
I meant to say I don't see how the rebate amount is calculated in my particular case.

Let's say I'm in the 40% band. and after submitted a tax return the rebate amount is 586,000 yen. Cash paid back to me.
That should mean I had over 1mil yen more exposed to tax than I should have.
But when I submit the tax return all I enter is:-
Pension payment for kid. 190K
Ideco of 276K
Earthquake insurance 50K
That's 516K that should result in about 40% that coming back (and I guess an adjustment for next years resident taxes)

but 40% of 516K is 206K not 586K..
and I do see any break down of how the 586K was derived on the screen...

At the start of the year my employer knows I have two special case dependents and assures me they use the appropriate withholding tax rate.
The taxation on bonus is also based on the appropriate table for deductions based on previous months salary(and dependents)...

So are the default withholding rates so wildly inaccurate?
Or, and this is far more likely, am I missing something blindingly obvious...

[Tkydon]

At the start of the year my employer knows I have two special case dependents and assures me they use the appropriate withholding tax rate.
The taxation on bonus is also based on the appropriate table for deductions based on previous months salary(and dependents)...

So are the default withholding rates so wildly inaccurate?
Or, and this is far more likely, am I missing something blindingly obvious...

At the beginning of the year (Nenmatsu Chosei at the end of the previous year), you submit the Form for Declaring your Expected Dependents and certain Expected Deductions and Allowances and projected total income for the coming year, which determines the Expected Marginal Income Tax Rate. (See table above). This list of deductions does not include all deductions that can only be claimed at the end of the tax year, either in Nenmatsu Chosei or Kakutei Shinkoku.

HR (Payroll Dept) then uses a Table provided by the Tax Office (they have no choice in the matter), and withholds tax according to that table based on the information provided at the beginning of the year and the current month's gross pay amount (% is based on Year End Target Taxable Income and Tax), to hopefully achieve 100% of the Salary Tax Owed on the income from THIS employer at the end of the Tax Year.

This is all based on that Prediction at the beginning of the year, and so may be quite a long way off if your Dependents, Deductions and Allowances, or salary change significantly, especially if things like Furusato Nozei, medical expenses, additional dependents, Home Loan Deduction, insurance premiums, iDECO, or other deductions that can only be applied at the end of the tax year reduce your taxable income out of one tax bracket into the lower tax bracket, or unexpected bonuses, share programs, etc., increase your taxable income into the higher tax bracket.

When you submit the Nenmatsu Chosei - Year-End True-Up docs, or the Kakutei Shinkoku at the end of the year, with details of these additional deductions and allowances, then the actual tax payable on the actual final Gross Income for the year is calculated, and you either get a refund for Tax Withheld in Excess of the Actual Tax, or a big deduction out of December Payroll or Tax Bill to make up for any shortfall... (Better to estimate the year's income slightly high to over-withhold, than too low in my opinion...)

The tax refund per individual deduction is as above, but that does not take into account the Withholding Mismatch on all income through the year.

If you didn't have it, you didn't need that money though the year... Direct the whole Refund tax free into NISA

[TokyoWart]

1. For medical care (Basic fund for the National Health Insurance)
Maximum Household Limit: 650,000 yen per year

2. For Latter Life support (Financial support for the Medical Insurance System for the Elderly Aged 75 and Over)
Maximum Household Limit: 220,000 yen per year

3. For nursing care (Nursing-care insurance premiums for people aged 40 to 64)
Maximum Household Limit: 170,000 yen per year

Total Maximum Household Limit: 1,040,000 yen per year...

I'm following this conversation but confused by these limit numbers and the idea that health insurance overpayment would be refunded since it doesn't even appear on my 確定申告. Also, I don't think I've ever heard of a refund for overpaying health insurance. Last year I paid more than those limits:

健康保険 was 721,602
介護保険 was 224,100
(I won't have a 後期高齢者支援金分 until I reach 75)

The latter part of the conversation seems to be about over-withholding for income taxes in general. My experience is that the system seems designed to overwithhold at the higher tax brackets because I get a refund each year even though I'm reporting additional foreign dividend income (albeit also claiming some foreign tax credits and ふるさと納税).

[Tkydon]

1. For medical care (Basic fund for the National Health Insurance)
Maximum Household Limit: 650,000 yen per year

2. For Latter Life support (Financial support for the Medical Insurance System for the Elderly Aged 75 and Over)
Maximum Household Limit: 220,000 yen per year

3. For nursing care (Nursing-care insurance premiums for people aged 40 to 64)
Maximum Household Limit: 170,000 yen per year

Total Maximum Household Limit: 1,040,000 yen per year...

I'm following this conversation but confused by these limit numbers and the idea that health insurance overpayment would be refunded since it doesn't even appear on my 確定申告. Also, I don't think I've ever heard of a refund for overpaying health insurance. Last year I paid more than those limits:

健康保険 was 721,602
介護保険 was 224,100
(I won't have a 後期高齢者支援金分 until I reach 75)

The latter part of the conversation seems to be about over-withholding for income taxes in general. My experience is that the system seems designed to overwithhold at the higher tax brackets because I get a refund each year even though I'm reporting additional foreign dividend income (albeit also claiming some foreign tax credits and ふるさと納税).

I'm not sure that it could be refunded, but any refund of overpaid premiums would have to be discussed with the City or Ward Pension Office - Health Insurance Section, and not the National Tax Office.

All Healthcare Premiums deducted from Payroll are paid Pre-Tax or Tax-Free. i.e. that amount is deducted before calculating Withholding, and not included in your taxable income, so you have not paid any tax on it, so there is no Tax refund on that amount as no tax was paid on that amount...


The original discussion:
If you spend more than Y100,000 out of pocket in medical bills and medicine charges in the tax year (not including the portion covered by insurance which is already tax free), you can claim and get the tax back for the amount over Y100,000 that you are out of pocket.
If you had an operation, or if your family has many doctor's visits, or you spend a lot on drugs (even self medication over-the-counter drugs), it is easy to rack up expenses over Y100,000, and you get to claim a tax refund for those out-of-pocket expenses over Y100,000.

You cannot add the additional Health Insurance Premiums to that list, as Health Insurance Premiums withheld from Payroll were not taxed in the first place.

[Moneymatters]

1. For medical care (Basic fund for the National Health Insurance)
Maximum Household Limit: 650,000 yen per year

2. For Latter Life support (Financial support for the Medical Insurance System for the Elderly Aged 75 and Over)
Maximum Household Limit: 220,000 yen per year

3. For nursing care (Nursing-care insurance premiums for people aged 40 to 64)
Maximum Household Limit: 170,000 yen per year

Total Maximum Household Limit: 1,040,000 yen per year...

I'm following this conversation but confused by these limit numbers and the idea that health insurance overpayment would be refunded since it doesn't even appear on my 確定申告. Also, I don't think I've ever heard of a refund for overpaying health insurance. Last year I paid more than those limits:

健康保険 was 721,602
介護保険 was 224,100
(I won't have a 後期高齢者支援金分 until I reach 75)

The latter part of the conversation seems to be about over-withholding for income taxes in general. My experience is that the system seems designed to overwithhold at the higher tax brackets because I get a refund each year even though I'm reporting additional foreign dividend income (albeit also claiming some foreign tax credits and ふるさと納税).

Thanks! I’m inclined to believe it’s them erring on the side of caution with the withholding rates.

BTW, As covered in the post above I’ve identified the cause of the “extra”/“excessive” health deductions in my personal case. (Bonus payments)..