Capital City
Tokyo
Currency
Japanese Yen
(
¥
)
Timezone
GST +9
Payroll Frequency
monthly
Tax Year
1 April - 31 March
Employer Tax
16.20%
Languages
Japanese
Capital City
Tokyo
Currency
Japanese Yen
(
¥
)
Timezone
GST +9
Payroll Frequency
monthly
Tax Year
1 April - 31 March
Employer Tax
16.20%
Languages
Japanese
Hiring in Japan for the first time can be overwhelming, especially when navigating unfamiliar employment laws. Whether you hire independent contractors, set up a legal entity, or use an EOR service, understanding the local employment landscape is crucial for success. Playroll’s comprehensive guide can help you get started if you're hiring locally or relocating a team member.
Companies can hire employees in Japan in the following three ways:
Hiring in Japan offers access to a highly educated and skilled workforce known for its strong work ethic and dedication to quality.
The country's stable economy and business-friendly environment provide a solid foundation for companies seeking growth opportunities.
pan's emphasis on innovation and technology makes it an attractive location for industries ranging from automotive to electronics.
Additionally, its rich cultural heritage and reputation for reliability make it an appealing destination for businesses looking to establish a presence in the Asia-Pacific region.
Businesses can only operate smoothly in Japan if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Japan below, to avoid any compliance issues.
While it is not mandatory for employment agreements to be documented to be legally binding in Japan, it is advisable to create a written employment contract that outlines key terms of the employment relationship. This includes:
We can help you get a new employee started in Japan quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.
The standard working hours in Japan are 8 hours per day, 40 hours per week.
Limits on overtime are set at a maximum of 45 hours per month, and 365 hours per year. Managers and supervisors, as defined by the Labour Standards Act, are exempt, but late-night work allowance still applies. Overtime payment rates are additional percentages of the normal hourly wage, with different rates as follows:
Probation is not mandatory in Japan. However, they are commonly practiced and are limited to a duration of three to six months, with an upper limit of one year.
1 April - 31 March is the 12-month accounting period that businesses in Japan use for financial and tax reporting purposes.
The payroll cycle in Japan is usually monthly, with employees being paid by the last day of the month.
The minimum wage for employees in Japan is typically 1,064 JPY per hour, amounting to ~187,264 JPY per month for a typical 40 hour work week.
Although not mandatory, many employees get an extra paycheck, a 13th-month salary, given in June and December. Whether employees receive this bonus depends on the company's choice, and this applies to both part-time and full-time workers.
Employer payroll contributions are generally estimated at an additional 16.2% on top of the employee salary in Japan.
In Japan , the typical estimation for employee payroll contributions cost is around 15.34%.
Japan's individual income tax ranges from 5% to 45% based on a progressive scale, influenced by factors like household status. Non-residents face a flat 20.42% national income tax with no deductions and potentially a 10% local inhabitant's tax if registered as residents by January 1st.
The retirement age is 65, and Japan has two pension programs: the National Pension and the Employees' Pension systems. Contributions from employers, employees, and the government collectively fund retirement benefits.
The annual leave entitlement in Japan is 10 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.
Japan observes 16 public holidays. While technically employers aren't legally obligated to pay employees on national holidays, in practice, the majority of employers do provide payment for these days.
The allocation of paid leave is specified in employment contracts and is based on the length of employment and unused days expire after two years. The entitlements are as follows:
Female employees are entitled to 14 weeks of paid maternity leave. A mandatory 6-week period must be taken before the child's birth. During maternity leave, the employee will receive approximately 2/3 of their salary, and Social Security is responsible for providing this payment.
Although not mandatory, most companies offer fathers four weeks off after their child is born, known as Childcare at Birth Leave. They can take it all at once or in two parts within eight weeks of the birth. Social security pays 67% of their salary during this time.
Sick leave is not mandatory by law. While some companies may implement their own sick leave policies, it is not a universal requirement. Employees usually resort to using their vacation days to cover sick leave or make claims through social insurance systems.
Parental leave, known as childcare leave, is available to both mothers and fathers in Japan. It begins the day after the conclusion of maternity leave for a maximum of one year. Labour insurance provides coverage, allowing employees to take this leave until their child reaches one year of age. Companies with 1,000 or more employees are obligated to disclose annually the rate at which their staff takes childcare leave
Employees are entitled to paid leave of five days for the death of a 1st-degree relative, three days for 2nd-degree relatives, and two days for 3rd-degree relatives.
Female employees have the right to unpaid time off during their menstrual period for health reasons. This is a statutory leave mandated by government legislation.
Termination depends on factors such as the employment agreement, collective agreement, contract type, job role, region, and the reason for termination. Given the complexity of termination procedures, they usually occur through mutual agreement and often involve additional compensation.
The standard notice period for termination is typically 30 days. If notice is not given, the employer can compensate with a payment in lieu of notice. However, this rule doesn't apply to employees serving a probationary period of 14 days or less.
There are no legal obligations for employers to provide severance payments. However, due to the strict regulations on terminating employees, many employers choose to offer severance payments as a way to secure a waiver and encourage voluntary resignation from the employee.
Copied to Clipboard
Take your business to new places
Capital City
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.
Employer Tax
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.
Hiring in Japan for the first time can be overwhelming, especially when navigating unfamiliar employment laws. Whether you hire independent contractors, set up a legal entity, or use an EOR service, understanding the local employment landscape is crucial for success. Playroll’s comprehensive guide can help you get started if you're hiring locally or relocating a team member.
Companies can hire employees in Japan in the following three ways:
Hiring in Japan offers access to a highly educated and skilled workforce known for its strong work ethic and dedication to quality.
The country's stable economy and business-friendly environment provide a solid foundation for companies seeking growth opportunities.
pan's emphasis on innovation and technology makes it an attractive location for industries ranging from automotive to electronics.
Additionally, its rich cultural heritage and reputation for reliability make it an appealing destination for businesses looking to establish a presence in the Asia-Pacific region.
Businesses can only operate smoothly in Japan if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Japan below, to avoid any compliance issues.
While it is not mandatory for employment agreements to be documented to be legally binding in Japan, it is advisable to create a written employment contract that outlines key terms of the employment relationship. This includes:
We can help you get a new employee started in Japan quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.
The standard working hours in Japan are 8 hours per day, 40 hours per week.
Limits on overtime are set at a maximum of 45 hours per month, and 365 hours per year. Managers and supervisors, as defined by the Labour Standards Act, are exempt, but late-night work allowance still applies. Overtime payment rates are additional percentages of the normal hourly wage, with different rates as follows:
Probation is not mandatory in Japan. However, they are commonly practiced and are limited to a duration of three to six months, with an upper limit of one year.
1 April - 31 March is the 12-month accounting period that businesses in Japan use for financial and tax reporting purposes.
The payroll cycle in Japan is usually monthly, with employees being paid by the last day of the month.
The minimum wage for employees in Japan is typically 1,064 JPY per hour, amounting to ~187,264 JPY per month for a typical 40 hour work week.
Although not mandatory, many employees get an extra paycheck, a 13th-month salary, given in June and December. Whether employees receive this bonus depends on the company's choice, and this applies to both part-time and full-time workers.
Employer payroll contributions are generally estimated at an additional 16.2% on top of the employee salary in Japan.
In Japan , the typical estimation for employee payroll contributions cost is around 15.34%.
Japan's individual income tax ranges from 5% to 45% based on a progressive scale, influenced by factors like household status. Non-residents face a flat 20.42% national income tax with no deductions and potentially a 10% local inhabitant's tax if registered as residents by January 1st.
The retirement age is 65, and Japan has two pension programs: the National Pension and the Employees' Pension systems. Contributions from employers, employees, and the government collectively fund retirement benefits.
The annual leave entitlement in Japan is 10 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.
Japan observes 16 public holidays. While technically employers aren't legally obligated to pay employees on national holidays, in practice, the majority of employers do provide payment for these days.
The allocation of paid leave is specified in employment contracts and is based on the length of employment and unused days expire after two years. The entitlements are as follows:
Female employees are entitled to 14 weeks of paid maternity leave. A mandatory 6-week period must be taken before the child's birth. During maternity leave, the employee will receive approximately 2/3 of their salary, and Social Security is responsible for providing this payment.
Although not mandatory, most companies offer fathers four weeks off after their child is born, known as Childcare at Birth Leave. They can take it all at once or in two parts within eight weeks of the birth. Social security pays 67% of their salary during this time.
Sick leave is not mandatory by law. While some companies may implement their own sick leave policies, it is not a universal requirement. Employees usually resort to using their vacation days to cover sick leave or make claims through social insurance systems.
Parental leave, known as childcare leave, is available to both mothers and fathers in Japan. It begins the day after the conclusion of maternity leave for a maximum of one year. Labour insurance provides coverage, allowing employees to take this leave until their child reaches one year of age. Companies with 1,000 or more employees are obligated to disclose annually the rate at which their staff takes childcare leave
Employees are entitled to paid leave of five days for the death of a 1st-degree relative, three days for 2nd-degree relatives, and two days for 3rd-degree relatives.
Female employees have the right to unpaid time off during their menstrual period for health reasons. This is a statutory leave mandated by government legislation.
Termination depends on factors such as the employment agreement, collective agreement, contract type, job role, region, and the reason for termination. Given the complexity of termination procedures, they usually occur through mutual agreement and often involve additional compensation.
The standard notice period for termination is typically 30 days. If notice is not given, the employer can compensate with a payment in lieu of notice. However, this rule doesn't apply to employees serving a probationary period of 14 days or less.
There are no legal obligations for employers to provide severance payments. However, due to the strict regulations on terminating employees, many employers choose to offer severance payments as a way to secure a waiver and encourage voluntary resignation from the employee.
Copied to Clipboard
Take your business to new places