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- AUG (Authorized User Group) Certified
- Nasscom Certified
- SNA Certified
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Japan offers a highly skilled workforce, advanced industries, and strong employment protections. Employers must comply with the Labour Standards Act, Shakai Hoken social insurance, and strict compliance rules.
This guide summarizes everything you need to know before hiring or paying employees in Japan.
Currency
Languages
Minimum wage
Standard Working Hours
Probation period
Paid leave
Employment Cost
Hiring GuideWhen hiring in Japan, ensure your employment contracts, working hours, overtime rules, and social insurance registrations meet Japanese labour regulations.
Learn more
Employment ContractsContracts can be fixed-term or indefinite. Must include:
Notice Periods:
Minimum 30 days or payment in lieu.
Termination of Employment:
Allowed for:
Japan has strict termination rules.
Learn more
Employee BenefitsMandatory Benefits
Leave Policies
Annual Leave:
Starts at 10 days, increases annually (up to 20 days)
Sick Leave:
Not mandated; employer policy applies
(Employees often use paid leave)
Parental Leave:
Healthcare
Universal health insurance system, funded jointly by employer & employee.
Many employers offer additional private medical benefits.
Taxes in JapanJapan uses progressive income tax rates with national + local taxes.
Personal Income Tax:
Ranges from 5% to 45% depending on income
Social Contributions:
Employers must deduct:
Payroll in JapanBase Salary
Must meet prefectural minimum wage.
Payment Schedule
Monthly, fixed date.
Additional Payments
Taxes and Social SecuritySocial Insurance Contributions:
Employer contributes approx:
Employee contributes similar (except accident insurance).
Payroll ReportingMonthly:
Annual:
Payroll Currency: JPY
Learn more about payroll
Legal RegulationsJapan's labour laws cover working hours, leave, overtime pay, minimum wage, and social insurance obligations.
Total Employment Cost:
Employer cost adds ~15–20% above gross salary.
Work Permits & Visas for Japan
Common work permits include:
Employer of Record in JapanEOR services in Japan enable companies to hire employees legally without establishing a local entity, while ensuring full compliance with Japanese labor laws. This helps businesses expand into Japan efficiently while reducing administrative and compliance complexity.
Your EOR handles:
PEO Services in JapanPEO services in Japan support companies with a local entity by managing HR operations and compliance, allowing employers to run their workforce efficiently while adhering to local labor requirements.
PEO solutions provide:
Payroll CalculatorEstimate salary, social insurance, and employer cost for Japan.
Go to Payroll Calculator
| COUNTRY | TAXES / COSTS | NETPAY |
|---|---|---|
|
$52,600 | $430,820 |
|
$52,600 | $430,820 |
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An Employer of Record (EOR) helps by handling local employment contracts, payroll, taxes, and statutory compliance.
Japan's Labour Standards Act governs wages, working hours, leave entitlements, and employee benefits.
Employees are typically paid monthly in JPY, with all mandatory taxes and social security deductions applied.
You can use a Dhi ADT EOR service or establish your own legal entity in Japan.
Innovative solutions for global workforce management and payroll services.
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