Raise

A new fiscal year has just started and: I’m getting a raise! YAY.

Japanese currencyNo, that’s not a joyful yay, actually, because once you’re self-employed, giving yourself a raise is a bit more complicated than just being happy about more money. That’s because I’ll have to earn the money before I can spend it – have I ever mentioned that I am financially conservative? – and it is quite a large amount, as you will see in a moment.

So, why on earth am I giving myself a raise if I’d rather not? Excellent question! Answer: Because I have to.

Recently, the Japanese government has decided that everybody who is living in Japan must pay into the national pension fund. So far, it was optional (even for Japanese as far as I know) and especially if you were self-employed, you didn’t really need to. But now, since April 1st, paying for your pension is mandatory, and because I have been living on the financial edge already for the last few years, I need that raise to pay my pension.

Even worse, it turned out that I cannot pay pension privately (as I had done with health insurance), but I need to run this through the company, which makes everything significantly more expensive. I have now enrolled in the national social security which means I will pay health and pension insurance in one lump sum – of about 60.000 yen per month. Like in many other countries, this is split into 50% for the employee and 50% for the employer, so 30.000 yen is my salary raise, and 30.000 yen is additional company expenses.

In the end, what I get onto my account by the end of the month is the same as before, but since I now pay health insurance through the company, I am saving 20.000 yen of my personal money, which will give me a bit of breathing room every month. Still, it does hurt: for 20.000 yen more in my pocket I’ll need to earn 60.000 yen more each month.

As I said above: yay.

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