The Year the '1.06 Million Yen Wall' Disappears: Dividing the Increasing Administrative Work Before It Overwhelms You

2026 looks set to be a year where the 'administrative work' of small and medium-sized enterprises quietly increases.
On June 13, 2025, the Pension System Reform Act was enacted. What was decided is a major shift in direction: people working as part-timers or side-job workers for 20 hours or more per week will now be enrolled in social insurance (Employees' Pension and Health Insurance) 'regardless of company size.' At the same time, a policy was indicated to eliminate the wage threshold of 88,000 yen per month, which has been known as the '1.06 million yen annual income wall' (Source: Ministry of Health, Labour and Welfare, 'Expansion of Social Insurance Coverage').
News reports focus only on 'take-home pay for workers' and 'increased future pensions.' But what concerns me is something else. This is actually a story about how 'procedures' on the company side will gradually increase. Today, I would like to think together about how to face that increasing administrative work.
What changes is 'who joins,' what increases is 'the procedures'
Let's list the key points of this reform from the company's perspective, rather than the worker's.
・Part-time workers working 20 hours or more per week will be eligible for social insurance regardless of company size (to be expanded in stages over 10 years)
・The wage requirement of '88,000 yen per month (1.06 million yen annual income)' is planned to be abolished. A decision will be made after observing that the national minimum wage reaches 1,016 yen or more
・Individual proprietorships with 5 or more regular employees will also be covered in principle for all industries (from October 2029; civil engineering and construction industries were already covered)
(Source: Ministry of Health, Labour and Welfare, 'Expansion of Social Insurance Coverage')
This is where the minimum wage comes into play. The minimum wage for fiscal year 2025 is 1,121 yen as a national weighted average. It increased by 66 yen from the previous year, exceeding 1,000 yen in all prefectures (Source: The Japan Institute for Labour Policy and Training). In other words, the benchmark for abolition—'when it reaches 1,016 yen or more'—has already been exceeded in many regions. The day the wall disappears is closer than you think.
The fact that workers are newly enrolling means that administrative work will pile up on the company side. The 'Qualification Acquisition Notification' (documents to report enrollment) at the time of joining, monthly insurance premium calculations, the annual 'Basic Calculation Notification' (procedures to report remuneration that forms the basis for insurance premiums), and the 'Monthly Change Notification' if salaries change. Every time one person is added, this is repeated. Part-timers who previously worked within the scope of dependency will now be eligible for enrollment one after another. The total volume of administrative work will increase without anyone noticing.
Even if you install a system, 70-80% is 'only known by that person'
Some may think, 'We are fine because we have payroll software.' But the data shows a slightly different picture.
In a survey on the actual state of payroll calculation, even in companies that have introduced systems, about 70% of those in charge felt burdened by the monthly 'payroll closing.' Furthermore, when looking at the content of the burden by process, the rate of personalization (a state where only that person knows or can do it) is high as follows:
・Collection and confirmation of attendance information: 82.0%
・Collection and confirmation of variable information (changes in overtime, allowances, etc.): 77.6%
・Additional procedures after calculation: 76.0%
・Calculation of salary and deductions: 72.8%
(Source: LayerX Inc., 'Survey on the Actual State of Payroll Calculation')
Software speeds up the calculation itself. But the preparation before and after—'whose attendance to collect, from where, and how to correct it'—is ultimately in the head of the person in charge. That is why even if the number of people increases or the system changes, the burden remains stuck on one person. If social insurance enrollment procedures are added on top of this, what will happen? I think you can imagine. It will be secretly absorbed by one person's overtime hours.
Before increasing, 'write it out' once
So, what should you do? What I would like to recommend is to 'write out' the procedures once before increasing the number of administrative staff. Paper or Excel is fine. Write down the work related to social insurance and payroll line by line, and try to sort it into three categories:
・Work that can only be decided in-house (who to enroll, what the wage structure should be)
・Work that can be outsourced (preparation of notifications, monthly calculations, year-end adjustment aggregation)
・Work that is not needed or can be stopped (double entry, superficial checks)
There are areas in social insurance procedures that can only be handled by a certified social insurance labor consultant. That is precisely why it is powerful to draw the line between 'handling it in-house / leaving it to experts / outsourcing' before the system changes. And the one sheet you write out will become handover material when hiring people, and an order form when outsourcing. One preparation works twice.
Let me ask you one question here. Can you say off the top of your head how many people, which processes, and how many hours per month are currently being spent on social insurance and payroll procedures at your company? If you cannot say, it means that when the system changes, it will be absorbed by 'someone's invisible overtime.' Conversely, the moment you write it out and make it visible, that work can be divided and handed over.
Summary—Now, before the wall disappears, is the easiest time to move
The flow of the system cannot be stopped by us. The wall will disappear, the number of people enrolling will increase, and the procedures will increase. This is already decided.
But 'who holds the increasing administrative work and how' can be designed from now on. Instead of hiring people in a panic or silently making the person in charge carry the burden, first write it out on one sheet and divide it. If you start from there, change will not be a threat, but just a warm-up exercise. I believe that now, before the wall disappears, is the time when you can move most lightly.
Recommended reading
Deepening today's idea of 'dividing work before adding people' in the context of recruitment.

The 'other face' of social insurance. It is a story about how personalization corners employees.

A concrete example of how 'invisible administrative work' creates overtime on the front lines.

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