Japan

Employment

A thorough contract must be signed by employer and employee. At-will employment is non-existent in Japan, therefore a probation period is in place to ensure the employer and employees can continue working together.

Payroll

Salaries are paid on a monthly basis. Payday is the 25th of every month.

HR & Labor

Full time employment is 40 hours a week (8 hours a day). Employees receive either 1 day of rest during the work week, or 4 days (or more) in a 4-week period. Compensation for overtime is 125% of their regular wage and 135% of regular wage for work on holidays. Minimum Age is 15 years old.
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If the employee works on holidays, the employer must pay at least 135% of the wages. If the employees work during midnight hours, employer must pay 125%. Minimum working age is 15 years old.

Immigration

To enter Japan, non-Japanese nationals must obtain a “Landing Permit”. To receive a working permit 14 days are allotted to register with the local ward office or city hall.

Minimum Wage

The minimum wage is 780JPY per hour.

Pension Fund

The employer contributes 8.56%.

The employee contributes 8.56% to the pension fund. The cap for monthly salary is 635,000 YEN or more.

Severance Payments

No legal requirement

Advance Notice

Advance notice is one month.

Termination Procedure

Under Japanese labor law termination full-time employees is difficult. Should they not want to leave, employees may dispute and proceed with negotiations generally leading to compensation in the sum of a minimum of one-month salary per year worked.

Sick Days

Officially none. Ill employees tend to use their vacation days.

Public Holidays

There are 14 public holidays.

Vacation Days

No legal requirement for first 6 months, following employees are allotted 10-12 days with an additional day for each year employed by the company.

Additional Employee Withholdings

1) Employment Insurance
2) Health Insurance

1) Employer contributes 0.85%.
2) Employer contributes 4.99%.

1) Employee contributes 0.5%.
2) Employee contributes 4.99%

Expat Benefits

Japanese companies offer expat benefits such as accommodation allowance, international schools for the children of expats, utilities, transportation and etc. Benefit packages vary from company to company. Foreign employees on short-term assignments (less than 12 months)
For a non-resident (present in Japan for less than one year) the national tax is 20% flat rate without any deductions. Residence tax is generally not imposed on a non-resident individual.
Please note, that in order to be considered a non-resident, the foreign employee needs to sign an employment agreement for a period of less than 1 year.

VAT

VAT is 5% standard rate.

Income Tax

Non-Resident Tax: Foreign employees on short-term assignments (less than 12 months) are required to pay a national tax of 20% flat rate. To be considered a non-resident the foreign employee must sign an employment agreement for a period of less than 1 year.

Earthquake Reconstruction Tax

A rate of 2.1% of the national income tax that applies to both resident and non-resident tax payers

Resident Tax

In Japan residence tax are levied on taxable income. The residence tax rate is a flat rate of 10% and it includes Prefectural Residence Tax (4% of taxable income) and Municipal Residence Tax (6% of taxable income.