Exclusive Webinar - Paying global teams: Strategic compensation and compliant payroll
Save your spot
Speed up your global expansion! Expand smartly in 150+ countries with the #1 rated EOR globally.
Explore Multiplier EOR
Book a demo
Exclusive Webinar - Paying global teams: Strategic compensation and compliant payroll
Save your spot
Speed up your global expansion! Expand smartly in 150+ countries with the #1 rated EOR globally.
Explore Multiplier EOR
Your guide to the employment landscape, working customs and local labor laws in Japan
Capital
Tokyo
Currency
Japanese Yen (JPY)
Languages
Japanese
GDP per Capita
$36,492.15
Employer Tax
15.045%
Payroll Frequency
monthly
Known as the “Land of the Rising Sun”, Japan’s distinction from the rest of the world is not only its strategic geographical location but also due to its rich cultural virtues. Japanese people are known to be polite, organized, and have a good work ethic. In turn, the country has many merits to its name and is considered one of the most developed countries in the world.
Japan’s economy is ranked as the third-largest in the world by nominal GDP and fourth by Purchasing Power Parity (PPP) GDP. The country is also one of the world’s leading investors, having more than $220 billion in FDI (foreign direct investments) outflows each year.
Major economic hubs:
Tokyo, Osaka, and Kyoto
Skills in demand:
Local: 1
World: 100
Local: 2
World: 147
Local: 3
World: 256
Local: 4
World: 347
Local: 5
World: 348
GaijinPot, Daijob, Craigslist, JobsinJapan
3,740,000
Top Local Job Boards:
Top Local Job Boards
Number of LinkedIn users:
Number of LinkedIn users
Top Recruitment Agencies:
Below listed are the average salaries for some common jobs in Japan.
| Job Title | Average Monthly Salary (in JPY) | Average Monthly Salary (in USD) |
| Financial Manager | 1,050,000 | 7,423 |
| General Manager | 931,000 | 6,581 |
| Business Development Manager | 834,000 | 5,895 |
| Financial Analyst | 708,000 | 5,005 |
| Business Analyst | 642,000 | 4,538 |
| Project Manager | 619,000 | 4,376 |
Onboarding Japanese employees can be a real asset to businesses expanding their operations in the country. The first step to realizing this is to be familiarized with the Japanese labor regulations. The following section shall guide you through the onboarding process.
There is no required language in Japanese employment contracts, provided it is written in a medium that all parties understand. However, most employers use the Japanese language for these documents.
Employees in Japan can have 3 to 6 months of probation period.
| National Holiday | 2024 Date |
| New Year’s Day | January 1 |
| Coming of Age Day | January 8 (Second Monday in January) |
| National Foundation Day | February 11 (Observed on February 12) |
| Emperor’s Birthday | February 23 |
| Vernal Equinox Day | March 20 |
| Shōwa Day | April 29 |
| Constitution Memorial Day | May 3 |
| Greenery Day | May 4 |
| Children’s Day | May 5 (Observed on May 6) |
| Marine Day | July 15 (Third Monday in July) |
| Mountain Day | August 11 (Observed on August 12) |
| Respect for the Aged Day | September 16 (Third Monday in September) |
| Autumnal Equinox Day | September 22 (Observed on September 23) |
| Sports Day | October 14 (Second Monday in October) |
| Culture Day | November 3 (Observed on November 4) |
| Labor Thanksgiving Day | November 23 |
| Type of Leave | Time Period | Mandatory |
| Annual Leave | 10-20 days | Yes |
| Sick Leave | 0 days | No |
| Maternity Leave | 14 weeks | Yes |
Leave Compliance
Payroll cycle
Employees in Japan are paid monthly.
Minimum wage
Minimum wage in Japan varies with location, ranging from 790 JPY to 1,072 JPY.
Overtime pay
The standard working hours in Japan are 8 hours per day and 40 hours per week. Overtime is legal in the country, with a cap of 45 hours per month and 360 hours per year. The overtime pay varies as per the table below:
Read more
| Contributions | Rate |
| Health Insurance | 5% |
| Welfare Pension | 9.15% |
| Unemployment Insurance | 0.6% |
| Child Allowance | 0.36% |
| Worker’s Accident Compensation Insurance | Varies on the type of business |
| Contributions | Rate |
| Health Insurance* | 5% |
| Welfare Pension | 9.15% |
| Unemployment Insurance | 0.5% (Upto March 2023) |
| Child Allowance | 0.36% |
*Note: There is an additional fixed rate of 0.82% for the long term health insurance that is applicable for ages of 40 and 64.
| Taxable Income (JPY) | Tax Rate | Deduction (JPY) | Tax on base amount (JPY) |
| 0 – 1,950,000 | 5% | 0 | 0 |
| 1,950,000 – 3,300,000 | 10% | 97,500 | 97,500 |
| 3,300,000 – 6,950,000 | 20% | 427,500 | 232,500 |
| 6,950,000 – 9,000,000 | 23% | 636,000 | 962,500 |
| 9,000,000 – 18,000,000 | 33% | 1,536,000 | 1,434,000 |
| 18,000,000 – 40,000,000 | 40% | 2,796,000 | 4,404,000 |
| 40,000,000 and above | 45% | 4,796,000 | 13,204,000 |
The standard VAT rate in Japan is 10%. However, few goods and services are levied a VAT of 8%.
13th month pay is customary in Japan. Most employers offer these incentives for their employees as a winter bonus, usually around December.
Japanese employees are entitled to numerous benefits during their employment. Below are some of them:
Employers terminating their employees must provide a notice of termination informing them of the reasons for the decision. In cases of summary dismissal, an employer may do so without any notice but must pay their employees 30-days worth of wages, known as a “notice allowance.”
A notice period of up to 30 days is generally observed in Japan.
A severance pay is not mandatory in Japan.
According to the Japan Immigration Authority, foreign workers can legally work in the country if they have secured a Japanese work visa. Below are the types of visas in Japan:
Read more
Expand globally and hire talent in 150+ countries without having to set up an entity. Use Multiplier's Employer of Record to manage the complete employee experience while having the flexibility to enter new markets.
Overtime Pay
Minimum Wage
Overtime Pay
| Time and date of extra work | Rate |
| Overtime | Additional 25% |
| Night-time (22:00 – 05:00) | Additional 25% |
| Weekends and Holidays | Additional 35% |
| Night-time (continuing from overtime) | Additional 50% |
| Holiday (continuing from night-time) | Additional 60% |
Visa and Immigration
By use case
By team
By company size
Japan
