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Good to know
Tokyo is the capital city of Japan and one of the most populous cities in the world.
Currency
Japanese Yen (JPY)
Capital
Tokyo
Employee Costs
10%
Local Language
Japanese
Employer Taxes
16.23%
Public Holidays
16 Days
Payroll Frequency
Monthly
Tax Year
Japanese Yen (JPY)
Are you ready to hire in Japan?
Japan has a strong education system and a highly skilled and disciplined workforce. Hiring locally can give you access to well-educated and capable professionals. The country is also is the third-largest economy in the world, and a presence in the Japanese market can be a crucial component of a long-term global business strategy.
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Minimum Wage
The national minimum wage in Japan is based on location. However, the minimum hourly wage for Tokyo is 1,072 JPY, Osaka is 931 JPY increased to 961 JPY in April 2023, and Kyoto is 882 JPY.
Working Hours
Standard Working Hours
In Japan, the standard work week consists of 40 hours, spread over 5 days, each lasting 8 hours. Additionally, working hours can be flexibly organized as long as the overall weekly total does not exceed the standard 40 hours.
For employees working for over 6 hours daily, it is obligatory to provide a rest break of a minimum of 45 minutes – and this extends to 60 minutes if their daily work hours extend to 8 hours or more. Additionally, each employee must be granted at least one day of rest per week.
Overtime
Overtime labour is allowed but necessitates additional compensation. As per Japanese regulations, the initial 60 hours of overtime performed within a month should be compensated at a minimum rate of 125% of the employee’s standard hourly wage. Any further hours worked must be rewarded at a rate of 150%.
Payroll
It is mandatory for employers to pay employees in Japan at least once a month. Payments are issued at the 25th of each calendar month.
Leave
Paid time off
Paid leave in Japan is dependant on the duration of employment as stipulated in the employment agreement.
Sick Pay
There are no statutory regulations pertaining to sick pay, it is the responsibility of the employer to establish suitable guidelines determining both the amount and duration of sick pay for employees. Employers are also required to specify a maximum timeframe within which employees must resume work to avoid termination.
In cases where an employee’s absence from work results from a work-related injury, they are entitled to a legally mandated allowance equal to 60% of their standard wages, which is to be provided by the employer.
Maternity Leave
Every woman employed is entitled to maternity benefits, which include 14 weeks of paid leave. This period covers 6 weeks preceding the expected due date and an additional 8 weeks post-birth. The maternity allowance is administered by the Social Insurance and is calculated based on the prevailing National Health Insurance rates, currently set at 420,000 JPY per child.
Paternity Leave
Fathers are eligible for paid paternity leave, referred to as “childcare leave,” for a period of up to 1 year following the birth. New fathers in Japan are entitled to this benefit, however, during this leave the employee does not receive a salary unless specified in the employment agreement. Instead, they are eligible for a partial allowance provided through social security.
Termination
Termination of Employment
The termination procedure differs depending on the terms set in the employment contract and collective agreement. It depends on factors like the contract type, job position, geographic location, and the cause for termination.
Japan does not have legal mandates for severance pay. As a result of the strict constraints on the employer’s ability to terminate an employee, many employers provide a severance payment in return for the employee’s waiver of rights and voluntary resignation.
Notice Period
In Italy, the notice period varies depending on whether the termination is initiated by the employer or the employee. The length of the notice period is determined by the relevant National Collective Bargaining Agreement (NCBA), the duration of the employment, and the classification of the employee.
Probation Period
The probationary period for permanent employees in Japan is usually a period from 3 to 6 months.
Visa
Prior to their arrival in Japan, foreign nationals seeking employment in the country must obtain a work visa through their local Japanese embassy or consulate. Various categories of residence visas are available, each permitting the holder to work exclusively in the specified industry.
VAT
The standard rate of VAT in Japan is 10.00%.
