What is the iDeCo contribution cap for company employees?

Those with no corporate pension have 23,000 yen/month; corporate-type DC, DB, and civil servants were raised to 20,000 yen/month in the December 2024 revision. It is set to rise further from January 2027.

iDeCo Tax Savings & How to File: Full Contribution Deduction

This is an English translation of our Japanese article. Rules and figures may change; the Japanese version and official sources are authoritative. For individual matters, consult a tax office or a licensed tax accountant (zeirishi).

Last updated: June 14, 2026 / This article was prepared after checking materials published by the National Tax Agency, the official iDeCo site, and the Ministry of Health, Labour and Welfare (as of June 2026). Sources are cited in the text and at the end.

Three tax advantages

How the contribution deduction, tax-free investment gains, and the deduction at payout work.

Basics

Contribution limits by occupation

Check the correct caps after the December 2024 revision in one table.

Revision-ready

Tax-saving simulation

Calculate and compare your annual saving by income and occupation.

Comparison

Getting started and filing

The flow from opening an account to year-end adjustment and the tax return.

Steps

Cautions and drawbacks

What to know before joining, such as no withdrawals until age 60.

Caution

Check your tax saving: Calculate income tax from your taxable income and see how much the income deduction for iDeCo contributions saves you.Calculate income tax →

The three tax advantages of iDeCo

iDeCo (the individual-type defined contribution pension) is a pension scheme in which you build up savings for your own retirement. From a tax-saving perspective, it offers tax advantages at the following three stages.

MERIT 01

The full contribution is an income deduction

Your monthly contribution is deducted from income in full as the deduction for iDeCo/small-business mutual-aid contributions, lowering your income tax and residence tax by that amount. This has the most immediate effect of the three[NTA No.1135].

MERIT 02

Investment gains are tax-free

Ordinary investments are taxed about 20% on gains, but gains inside an iDeCo account are tax-free. This maximizes the effect of long-term compounding.

MERIT 03

A deduction at payout too

When you receive the money at age 60 or later, a lump sum gets the retirement income deduction and an annuity form gets the public pension deduction. Choosing how to receive it is the key to tax saving.

The tax-saving formula

Annual saving ＝ annual contribution × (income tax rate ＋ residence tax rate 10%)

The income tax rate is 5–45% depending on your taxable income. The higher your income, the greater the tax saving.

Example: with an income of ¥7 million (income tax rate 20%) and a monthly contribution of ¥23,000 → ¥276,000 × 30% ＝ an annual saving of ¥82,800

Contribution limits by occupation (after the December 2024 revision)

The monthly iDeCo contribution limit differs by occupation and by the type of corporate pension you belong to. The December 2024 revision raised the cap for civil servants, people enrolled only in a DB plan, and people enrolled only in a corporate-type DC plan from ¥12,000 to ¥20,000 per month.[iDeCo official]

Enrollment category	Monthly cap	Annual cap	Notes
Self-employed / freelancers (Category 1)	¥68,000	¥816,000	Combined cap with the National Pension Fund
Company employee (no corporate pension)	¥23,000	¥276,000	No change
Company employee (corporate-type DC only)⬆️ Revised	¥20,000	¥240,000	Formerly ¥12,000/month
Company employee (DB only)⬆️ Revised	¥20,000	¥240,000	Formerly ¥12,000/month
Civil servant (mutual-aid pension only)⬆️ Revised	¥20,000	¥240,000	Formerly ¥12,000/month
Full-time homemaker (Category 3)	¥23,000	¥276,000	No change

※ When you belong to both a DB (defined-benefit corporate pension) and a corporate-type DC, for example, the cap varies with the combination of your company's pension plans. Check the details with your employer or financial institution.

Who is affected by the December 2024 revision

Civil servants, company employees enrolled only in a DB plan, and company employees enrolled only in a corporate-type DC plan who still have their contribution set at the old cap of ¥12,000/month can increase it up to ¥20,000/month. You need to complete a contribution-change procedure with your financial institution (securities firm or bank). Changes are possible at any time (up to once a year).

Monthly iDeCo contribution caps (after the December 2024 revision)

Source: iDeCo official / National Pension Fund Association (the cap differs by enrollment category)

Tax-saving simulation by income and occupation

Because the entire contribution becomes an income deduction, the higher your income tax rate, the greater the tax saving. Use the tables below to estimate your own saving.

Company employee (no corporate pension, ¥23,000/month)

Annual salary	Annual contribution	Marginal income tax rate	Combined rate (＋10% residence tax)	Estimated annual saving
¥4 million	¥276,000	5%	15%	About ¥41,400
¥6 million	¥276,000	10%	20%	About ¥55,200
¥8 million	¥276,000	20%	30%	About ¥82,800
¥10 million	¥276,000	20%	30%	About ¥82,800
¥15 million	¥276,000	33%	43%	About ¥118,680

※ The income tax rate is determined by your taxable income (employment income minus various deductions). The above are estimates only.

Self-employed / freelancers (¥68,000/month)

Business income	Annual contribution	Combined rate	Estimated annual saving
¥3 million	¥816,000	15–20%	About ¥122,400–163,200
¥6 million	¥816,000	30%	About ¥244,800
¥10 million	¥816,000	43%	About ¥350,880

※ For the self-employed, National Health Insurance premiums also move with income, so the actual saving may be even larger.

Worked example: a company employee earning ¥7 million (no corporate pension) contributing ¥23,000/month

Monthly contribution¥23,000

Annual contribution (fully an income deduction)¥276,000

Income tax saving (rate 20%)¥55,200

Residence tax saving (rate 10%)¥27,600

Total annual saving¥82,800

Keep it up for 30 years and the cumulative saving is about ¥2.49 million. Since investment gains are also untaxed, the real benefit in hand is even larger.

Getting started and the filing steps

From opening an account to starting to invest

Choose a financial institution (operating management institution)

Pick from securities firms, banks, and insurers. The basics are to choose by fees and the range of products offered. Online securities firms that offer many index funds (such as SBI Securities and Rakuten Securities) are popular.

Submit the application documents

Apply from the financial institution's website. Company employees must ask their employer to fill in an "employer certificate" (this often takes 2–3 weeks).

Required documents: identity verification documents / My Number card (or notification card + ID) / Basic Pension Number (pension handbook)

Set your contribution amount and investment products

Set at ¥5,000 or more per month, in ¥1,000 units. The cap depends on your occupation category (see the previous section). You can change the contribution up to once a year.

The annual tax-saving procedure

In October–November your financial institution sends a "payment certificate (certificate of iDeCo/small-business mutual-aid contribution payments)." Use it to claim the tax saving.

Claiming it at year-end adjustment (company employees)

Where to enter it in the year-end adjustment

"② Insurance Premium Deduction Declaration" → the "deduction for iDeCo/small-business mutual-aid contributions" box

Just copy the "cumulative contributions for the year" shown on the payment certificate. No calculation needed.

The certificate arrives by post or digitally around October–November. If you lose it, ask your financial institution to reissue it.

Claiming it on a tax return (self-employed / employees with a side job)

Where to enter it on the tax return

The "deduction for iDeCo/small-business mutual-aid contributions" box on the First Table of Return Form A or B, or the corresponding item in e-Tax

Enter the cumulative amount from the payment certificate. If you file via e-Tax (reading your My Number card), you can omit submitting the certificate.

Cautions and drawbacks

While the tax saving is large, iDeCo has important constraints. Be sure to check them before joining.

As a rule, no withdrawals until age 60

In principle you cannot withdraw the assets you build up until you turn 60. Because it cannot cover sudden cash needs, the basic approach is to join only after securing separate emergency funds worth six months of living expenses.

The starting age for payout varies with your enrollment period

To receive it at 60 you need a total enrollment period of 10 years or more. If you join at age 50 or later, the payout start is pushed back to age 61–75.

There are fees

Fees to the National Pension Fund Association and your financial institution arise at enrollment, during investment, and at payout — roughly several thousand to ¥10,000 per year. Choosing a low-fee financial institution matters.

There is a risk of loss of principal

Depending on the products you invest in, your assets may fall (choosing principal-protected products limits the risk but lowers the yield). You need to choose products with an understanding of the nature of long-term investing.

Payouts are taxed too

At payout you can use the retirement income deduction and the public pension deduction, but the portion exceeding the deduction limit is taxed. Note that, depending on the timing relative to your company retirement allowance, the retirement income deduction may be aggregated (if you receive the iDeCo first, from January 2026 this extends to a "10-year rule")[NTA No.1600]. For details, see Tax on retirement allowances.

Some people cannot join

Those insured under the Farmers' Pension and people receiving a National Pension premium exemption, among others, cannot join. Also, some companies restrict simultaneous iDeCo enrollment in their corporate-type DC rules (in principle this was lifted from October 2022).

Using iDeCo and NISA appropriately

iDeCo has a high tax-saving effect but cannot be withdrawn until age 60. NISA can be withdrawn anytime but has no income deduction (only investment gains are tax-free). The basic idea is to first secure your emergency funds, then split your spare funds between iDeCo (retirement funds) and NISA (medium-to-long-term asset building).

Upcoming revisions (planned from January 2027)

Contribution caps set to rise further

Under the FY2025 (Reiwa 7) tax reform and related measures, contribution caps are planned to rise from the January 2027 contributions onward. Revisions have been outlined such as self-employed people from ¥68,000 to ¥75,000 per month and company employees and civil servants up to ¥62,000 per month combined with corporate pensions, regardless of whether they have a corporate pension. Raising the eligible age (under 70) is also under consideration. As this is a new scheme, please check the latest details on the confirmed content and effective dates on the official iDeCo site or with financial institutions.

FAQ

Where do I claim iDeCo contributions to save tax?

Company employees enter the amount on the payment certificate in the "deduction for iDeCo/small-business mutual-aid contributions" box of the year-end adjustment's Insurance Premium Deduction Declaration; the self-employed and people with a side job enter it in the same box on their tax return. This lightens your income tax and residence tax.

What is the iDeCo cap for company employees?

Those with no corporate pension have ¥23,000/month; corporate-type DC, DB, and civil servants were raised to ¥20,000/month in the December 2024 revision (formerly ¥12,000). It is set to rise further from January 2027.

Can I withdraw partway through?

As a rule you cannot withdraw until age 60. The basic approach is to join only after securing separate emergency funds for sudden cash needs.

Is there tax when I receive the money?

A lump sum can use the retirement income deduction and an annuity form can use the public pension deduction, but the portion exceeding the deduction is taxed. Note that if the timing is close to your company retirement allowance, the retirement income deduction is aggregated.

Sources / official information

This article is based on the official information below. Rules may be revised; please check each official site for the latest details.

※ This article is for general information only and is not tax or legal advice. For individual tax matters, consult your local tax office or a licensed tax accountant (zeirishi).