Overview

Capital
Tokyo
Currency
Yen (JPY)
Date Format
yyyy/mm/dd

Taxes

Employer

Employer Payroll Tax

9.15%
Pension
4.98% - 5.815%
Health Insurance
0.6%
Unemployment Insurance
0.25% to 8.8%
Work Injury
~0.29%
Family Allowance
Up to 24.66% Total Employment Cost
Employee

Employee Payroll Taxes

9.15%
Pension
4.935%
Health Insurance
0.3%
Unemployment Insurance
14.39% Total Employee Cost

Employee Income Tax

5.00%
Up to 1.95M
10.00%
1.95M - 3.3M
20.00%
3.3M - 6.95M
23.00%
6.95M - 9M
33.00%
9M - 18M
40.00%
18M - 40M
45.00%
Over 40M
Employer Taxes
3 HIGHEST
3 LOWEST
China
Brazil
Belarus
Japan
South Africa
Georgia
Macedonia
41.12%
36.8%
34%
24.66%
2%
2%
0%
Employee taxes
3 HIGHEST
3 LOWEST
Romania
Macedonia
Netherlands
Japan
Georgia
Belarus
Ukraine
45%
28%
27.65%
14.39%
2%
1%
0%

Minimum Wage

General

Japan’s hourly minimum wage depends on the region. The highest being 985 Yen in Tokyo and the lowest being 761 Yen in Kagoshima.

Minimum wage (per month)
$4000
$2663
$2491
$1336
$36.80
$22
$2.33
Geneva
Luxembourg
Australia
Japan
Angola
Uzbekistan
Venezuela
3 HIGHEST
3 LOWEST

Payroll

Payroll Cycle

Payments are made monthly typically by the 25th.

13th Salary

Not required by law.

Working Hours

General

Full time working is considered to be 40 hours weekly, and 8 hours daily.

Overtime

If an employee exceeds 40 hours a week, the employer is obligated to pay overtime.  If the employee is a manager, they are expected to work overtime and the company is not obligated to pay.

If an employee is expected to work overtime on a regular basis, there must be a written agreement and has to be filed with the Labor Inspection Office.

When employees work overtime or work on holidays, an additional payment to the hourly base salary applies:

  • Overtime (typically over 8 hours a day): additional 25%
  • Night-time (22:00 – 05:00): additional 25%
  • Weekends and Holidays: an additional 35%
  • Night-time (continuing from overtime): additional 50%
  • Holiday (continuing from night-time): additional 60%

The overtime hours must remain within the following limits in Japan:

  • 5 hours per day
  • 45 hours per month
  • 360 hours per year.

Leave

Paid Time Off

The minimum number of paid vacation days for employees varies based on the length of service: 

  • 6 months seniority: 10 days paid vacation earned  
  • 1.5 years seniority: 11 days paid vacation earned  
  • 2.5 years seniority: 12 days paid vacation earned 
  • 3.5 years seniority: 14 days paid vacation earned  
  • 4.5 years seniority: 16 days paid vacation earned  
  • 5.5 years seniority: 18 days paid vacation earned  
  • 6.5 years seniority: 20 days paid vacation earned 

Employees may accumulate up to two years of unused paid vacation.

Vacation days
Public holidays
3 HIGHEST
3 LOWEST
Brazil
Peru
Georgia
Japan
Malaysia
China
Federal
30
13
43
30
12
42
24
17
41
10
16
26
8
6
14
5
7
12
10
10
Public Holidays

They are 16 public holidays. While there are no legal requirements to pay for public holidays, it is common to grant those days as paid days off.

If a national holiday falls on a Sunday, the next working day will become a public holiday.

Sick Days

In Japan, there is no mandatory sick leave. When an employee gets sick, they use their paid vacation to take leave of absence.

Maternity Leave

In Japan, maternity leave is 14 weeks.  This is divided into 6 weeks before the birth and 8 weeks after.  If cleared by a doctor, the woman is able to return to work before the maternity leave expires.   

The woman receives 2/3 of their base salary and is covered by social insurance. 

PAID MATERNITY LEAVE (DAYS)
410
365
365
98
45
30
0
Bulgaria
Serbia
Albania
Japan
United Arab Emirates
Tunisia
Federal
3 HIGHEST
3 LOWEST
Paternity Leave

Male employees who have worked for the same employer for at least a year are entitled to 12 months paid leave.

Parental Leave

In Japan, Childcare leave can be taken by the mother or father and starts from the day after the maternity leave ends.  Childcare leave is covered by the labor insurance and an employee is able to take it till the day before the child turns 1 year old.  If both parents take child care leave, the leave is extended to when the child is 1 year and 2 months old.

Other Leave

Family care leave: Unpaid leave to care for a spouse, child, parent or grandparent for up to 3 months.

Work-related injury leave:

Employees receive 60% of daily benefits plus an additional 20% special supplement after a 3-day waiting period. The first three days are paid by the employer.

Contributions to workman’s accident compensation insurance is made by:

  • Employee – 0%
  • Employer – .25% – 8.8% depending on business.
  • Government – Subsidies dependent on needs.

Bereavement Leave:

  • Death of a father, mother, spouse, or child: up to five 5 days  
  • Death of a grandparent, grandchild, sibling, child’s spouse, or spouse’s parent: up to three 3 days 

When the employee is the person in charge of arranging the funeral service, up to two 2 days of additional leave is added. 

For the first year of a Buddhist memorial service of a deceased parent, spouse or child receives one day leave. 

Termination

Termination Process

Under Japanese labor law termination of 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. Prior to dismissal 30 days, notice is required.

Notice Period

The employer must provide 30 days’ notice or payment in lieu of the notice period.

Severance Pay

There isn’t a statutory severance payment but due to the difficulties of terminating an employee, employers should follow socially acceptable terms.

Probation Period

Probationary periods in Japan typically last 3 to 6 months.

VAT

General

5% standard rate.

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    Questions & Answers

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    Gregory G.
    Gregory G.
    3 months ago

    What are the rules regarding unpaid wages after an employee has left the job?

    Erez Greenberg
    Admin
    3 months ago
    Reply to  Gregory G.

    When an employee leaves the job, they are entitled to receive unpaid wages within 7 days of request for payment, even if this is before the set payday.

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