Japan offers companies many opportunities to expand or grow your business. Ensuring compliance for your workforce in Japan can be challenging, with labor and payroll regulation changes each year.

Payroll and Tax Considerations

  • Minimum wage differs by prefecture. The national weighted average minimum is JPY 902
  • Overtime cannot exceed 45 hours per month and 360 hours per year, but highly skilled employees are exempt from overtime limits
  • Employment contracts are not mandatory but encouraged where possible
  • Employers must provide at least 30 days notice for termination, unless employee is on probation
  • Employee terminations are managed with a negotiated, voluntary resignation with salary, benefits, and severance pay provided by the employer

HR and Statutory Benefits

  • Employees are entitled to at least 10 days of paid leave a year if they have been employed at least 6 months and have reported to work at least 80% of the time
  • Sick leave is not mandatory in Japan but is often agreen upon in the employment contract. There are minimum standards from 10-20 days per year depending on length of employment
  • Maternity leave is 14 weeks including 6 weeks before the birth and 8 weeks after. This is paid at a rate of 2/3 the daily wage
  • Paternity leave falls under childcare leave taken by either parent until the child turns one year old. The first 180 days are paid at 67% of average earnings and the remaining at 50%
  • The National Pension Law is Japan’s retirement scheme, and it covers all persons living in Japan, including foreigners. There are 3 different categories in the pension scheme
  • The contribution amount for the National Pension is JPY 16,410

There are several withholding and reporting requirements for employers including National insurance and National inhabitant withholding, as well as statutory pension requirements and reporting. Year end reporting includes statutory payroll reporting, end of year income tax adjustments, and residence tax reporting each year.

Holidays in Japan

  • January 1 – New Year’s Day
  • January 10 – Coming of Age Day
  • February 11 – National Foundation Day
  • February 23 – Emperor’s Birthday
  • March 20 – Spring Equinox
  • April 29 – Shōwa Day
  • May 3 – Constitution Memorial Day
  • May 4 – Greenery Day
  • May 5 – Children’s Day
  • July 18 – Sea Day
  • August 11 – Mountain Day
  • September 19 – Respect for the Aged Day
  • September 22 – Autumn Equinox
  • October 10 – Sports Day
  • November 3 – Culture Day
  • November 23 – Labor Thanksgiving Day

Blue Marble has simplified payroll and compliance in Japan with a cloud-based platform, aggregated monthly reporting, and integrated global services. You can view payroll in real-time across all countries and currencies to ensure compliance. Our unique, hybrid service model provides a dedicated US-based team and direct access to our in-country experts when questions come up. Simplify your payroll and compliance in Japan. Click here to learn more