Japanese Yen JPY
Onboard, pay and manage employees in Japan with Deel.
Usually, to hire in Japan, your business needs an entity. That means a local office, an address registered as a subsidiary, and an account with a local bank. All of this, plus navigating regional benefits, payroll, tax, and HR laws, can take months.
Deel lets you hire employees in Japan quickly, easily, and compliantly. We even automate tax document collection, payroll, benefits, and more. For your existing direct employees, we can manage your entire payroll operation from end-to-end.
All the necessary benefits for Japan
built right in
Deel allows you to provide localized benefits for employees in Japan within minutes. All in one manageable online dashboard.
- Private Healthcare - Allianz (optional)
Our quickstart guide to hiring in Japan
Navigate the tabs below to learn everything you need to know about hiring an employee in Japan
Minimum Wage Requirements
Individual Income Tax
The individual income tax ranges from 5% to 45%. Income tax is calculated according to progressive rates. Multiple additional factors may impact overall rates, such as household status and the number of children.
|Gross Annual Income||Tax Rate (%)|
|Up to JPY - 1.95 million||5%|
|Up to JPY - 3.3 million||10%|
|Up to JPY - 6.95 million||20%|
|Up to JPY - 9 million||23%|
|Up to JPY - 18 million||33%|
|Up to JPY - 40 million||40%|
|Over JPY - 40 million||45%|
The employer cost is generally estimated at 16.67% of the employee salary.
- Health Insurance* - 5%
- Pension Insurance* - 9.15%
- Unemployment insurance - 0.95%
- Long Term Care insurance* (over 40 only) - 0.91%
- Workers Compensation Insurance - 0.30%
- Contributions to Childcare* - 0.36%
- Asbestos Contribution - 0.002%
Annual Medical Check - JPY 45,000
*Health Insurance, Pension Insurance, Long Term Care insurance, and Contributions to Childcare are calculated on amounts determined by social insurance and based on the employee’s salary. Please note that social insurance also determines maximum salaries for these contributions, so percentages may vary.
Overtime Pay & Maximum Hours
Standard working hours are 8 hours per day, 40 hours per week. The standard work week is from Monday to Friday.
Overtime payment is only mandatory if the employee is not an exempt manager. For that case, overtime payment can’t be included in the salary. Hours outside of standard work hours are considered overtime. Employees can work a maximum of 360 hours of overtime per year.
For additional hours, employees are paid at different rates according to different variables:
|Classification||Rate of increase|
|Work in excess of statutory working hours||25%|
|Work in excess of statutory working hours exceeding 60 hours in a month||50%|
|Work on statutory days off||35%|
|Work late at night (between 10 p.m. and 5 a.m.)||25%|
|Work late at night in excess of statutory working hours||50%|
|Work late at night in excess of statutory working hours exceeding 60 hours in a month||75%|
|Work late at night on statutory days off||60%|
There is no paternity leave currently required by law.
Employees can use parental leave instead.
Employees are entitled to 12 months of parental leave, including maternity/paternity leave. Both parents can decide how to distribute the time off, which should be 8 weeks after paternity and maternity leave. Either parent can take parental leave. Social security will pay 67% of the salary during this period for the first 180 days and then 50% for the remaining days.
Parental can be extended up to 2 years for at 50% pay.
Employees are not entitled by law to sick leave and it will depend on the employer’s sole discretion.
Deel employees are entitled to 3 paid days of sick leave.
Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.
Terminations in Japan can be complex. There is no at-will termination in Japan for employers outside the probation period and termination must be done for just cause.
Compliant terminations include:
- Voluntarily by the employee
- By mutual agreement
- Unilaterally by the employer based on:
- probation period
- objective grounds
- disciplinary dismissal
- performance due to unsuitability for the job
- By the expiration of the contract
Severance for Employees
Paid Time Off
Full-time and Part-time employees are entitled to 10 working days of paid time off (PTO) a year. All 10 days will be given after 6 months of work. PTO doesn’t accrue monthly in Japan but increases according to the employee's length of service in the same company. Annual paid leave leftover from one year may be carried over and taken the next year.
Japan celebrates 16 national holidays
National public holidays include:
- The first day of the year
- Coming of age day
- Foundation Day
- The emperor's birthday
- Vernal Equinox Day
- Showa Day
- Constitution Memorial Day
- Greenery day
- Children's day
- Marine day
- Mountain day
- Respect for the Aged Day
- Autumnal Equinox Day
- Sports day
- Culture Day
- Labor Thanksgiving Day
Additional Regional Holidays here
Employment Contract Details
Contracts must be in Japanese and can be bilingual. They must be in writing and signed by both parties.
A contract must include:
- Start date
- Length of the employment
- Job description
- Duration of labor contract
- Place of work
- Nature of work to be performed
- Working hours
- Rules for shift work (if applicable)
- Whether or not work is performed in excess of the prescribed working hours
- Break times, holidays, and leave
- Methods for determining, calculating and paying wages, deadlines, and payment dates
- Rules on resignations and terminations
Probation periods are not mandatory. There are no laws stipulating minimum and maximum length. However, generally, the trial period lasts between 3 to 6 months.
After completing the probationary period, it can be extended for 6 additional months.
Hiring in Japan, hassle-free
With Deel, your business can easily hire employees in Japan with our EOR solution. If you have an entity, our Global Payroll solution takes care of payroll and compliance for your direct employees. Our 250+ in-house experts handle everything from managing local laws, complex tax systems, or your payroll in Japan and 150+ countries.
Estimate Employer Cost
*of employee salary