Japan, an island nation in East Asia, is an archipelago of 6,852 islands in the Pacific Ocean that stretch for approximately 1,500 miles (2,400 km) in a northeast-southwest arc. Nearly the entire land area is taken up by the country’s four main islands; from north to south these are Hokkaido, Honshu, Shikoku, and Kyushu.
The country is a constitutional monarchy. Japan has a large and, to a great extent, ethnically homogeneous and heavily concentrated population in the low-lying areas along the Pacific coast of Honshu. More than 99% of the population speaks Japanese. A heavy emphasis is placed on education, and Japan is one of the world’s most literate countries. The economy of Japan is the third-largest in the world after the United States and the People’s Republic of China.
*Please note that the official currency is the currency of remuneration when employed through WorkMotion in Japan.
Capital : Tokyo | Currency : Japanese Yen (JPY, ¥) | Languages spoken : Japanese |
Population : 125.5 million (2022 est.) | Minimum wage 2023 : JPY 930 hourly (National Average) | Cost of Living index : $$$$ (15 of 139 countries) |
Payroll Frequency : Monthly | VAT - standard rate : 5% | GDP - real growth rate : 1.6% (2021 est.) |
The national holidays mentioned below are valid for the year 2023.
The approximate time for sharing the contract with an employee in Japan is 14 business days assuming no special requests or changes to our standard employment contract. Any such requests or changes would need to undergo internal and external review, directly leading to a time delay.
NOTE: This number is subject to change and is only an estimation of the Contract Sharing Time. The estimated Contract Sharing Time begins from the moment that WorkMotion has received all required information from both the client and the employee.
Employers must not have workers working more than eight hours per day for each day of the week, or 40 hours per week, excluding break periods. An employer should provide workers with at least 45 minutes of rest periods during working hours when working hours exceed six hours, and at least one hour when working hours exceed eight hours.
If an employee is expected to work overtime on a regular basis, there must be a written agreement and it has to be filed with the Labor Inspection Office.
Employees cannot be required to perform overtime exceeding 45 hours per month or 360 hours per year. In special circumstances such as unexpected orders, employers are allowed to cross the basic limit rule. However, overtime hours on statutory holidays (such as Sundays) cannot exceed 100 hours per month. The yearly extended limit rule lies at 720 hours per year.
When employees work overtime or work on holidays, an additional payment to the hourly base salary applies:
There is no mention of the probationary period in the employment law. Probation periods are, however, common in Japan and normally range from three to six months, and should not exceed one year.
If an employer wishes to dismiss a worker, the employer must provide at least 30 days advance notice. An employer not giving 30 days’ advance notice must pay the worker the average wage they would earn while working for a period of at least 30 days.
The provision of a month’s advance notice of dismissal does not apply to a worker falling under one of the following items:
An employer must grant paid leave of 10 consecutive or non-consecutive working days to a worker who has been employed continuously for six months from the day of their hiring and who has reported to work on at least 80% of the total working days.
Further, every year of seniority adds to the annual paid leave to the employees’ account in the following manner:
| Seniority | Total Annual Leave |
| 6 months | 10 days |
| 1 year | 11 days |
| 2 years | 12 days |
| 3 years | 14 days |
| 4 years | 16 days |
| 5 years | 18 days |
| 6 years | 20 days |
There is no statutory provision for sick leave. Employees may use their accumulated paid vacation leave when sick.
A worker may take child care leave upon application to their employer, provided the child to be cared for is less than one year of age and if they have been employed for a continuous period of at least one year. During childcare leave, the beneficiaries get 67% of their gross monthly salary including allowances excluding honorariums for the first 180 days after maternity leave ends that reduces to 50% until the child turns one-year old within the first continuous leave.
A worker raising a child who is not yet of elementary school age may obtain unpaid leave to care for the child in the event of injury and/or illness upon application to their employer. This leave is limited to five working days per fiscal year.
A pregnant employee may take up to 14 weeks’ leave, commencing up to six weeks prior to the anticipated date of birth and finishing eight weeks after childbirth. All women employees insured by the Employees’ Health Insurance system are eligible for paid maternity leave. 66.67% of the insured’s average daily basic wage in the last 12 months is paid, depending on wage class. The benefit is paid for 42 days before (98 days for expected multiple births and 56 days after the expected date of childbirth. If the insured receives wages, benefits are suspended or partially reduced.
Male employees are entitled to four weeks’ leave, in one or two installments, within eight weeks after birth (Childcare at Birth Leave). Benefits will be payable by social security at the same rate as maternity leave (67% of covered pay).
Fathers must provide two weeks’ notice to their employer when intending to take paternity leave.
Although there are no special leave provisions for adoption, adoptive children by ‘special adoption’ (including those who are being given care by the worker before the completion of the adoption process) are treated in the same way as biological children for the purposes of Parental leave.
If a woman who finds it to be extremely difficult to work on a day of her menstrual period requests leave, the employer must not make her work on the day of her menstrual period.
There is no statutory provision for unpaid leave except for the short-term child care leave discussed in the parental leave section.
Social Insurance consists of:
An overview of the required contributions is presented below:
| Category | Employer Contribution | Employee Contribution | Maximum Premium |
| Health insurance | 5% | 5% | JPY 1,390,000 |
| Welfare pension insurance | 9.15% | 9.15% | JPY 650,000 |
| Employment insurance | 0.95% | 0.6% | No limit |
| Workmen’s accident compensation insurance |
| – | No limit |
| Family allowances | 0.36% | 0.36% | JPY 650,000 |
| Long Term Care Insurance | 0.91% | 0.91% | JPY 1,390,000 |
| Business Facility Tax or Establishment Tax*** | 0.25% | – |
*Maximum per year as of 2018.
**Depends on the type of business. 0.002% is added to the above premium to fund benefits for asbestos-induced diseases.
**** Those aged between 40 and 64 (the second insured persons under long-term care insurance) are charged a nationwide uniform long-term care insurance premium rate of 1.82%.
****Business Facility Tax or Establishment Tax only applies to employers with 100 employees or more.
Enrollment in public health insurance is compulsory, regardless of citizenship, for all those who have resided in Japan for three months or more. Rather than being freely selected by enrollees, public health insurance schemes are designated according to employment status, age, and residence. If an enrollee is neither the head of the household nor eligible through their own employer, then the scheme is designated based on the head of the household’s employment status, age, and residence.
The health insurance premium is 10%, shared equally between the employer and the employee.
The employer contributes 0.25% to 8.8% of payroll, depending on the type of business.
If a worker sustains an injury or suffers illness in the course of employment, the employer must furnish the necessary medical treatment at their expense and compensation for that absence from work at the rate of 60% of the worker’s average wage.
The employer pays 0.95% towards unemployment insurance whilst the employee pays 0.6%.
Contributions made by the:
The retirement age is 65 years. The old-age pension in Japan is split into two different programs, the National Pension and the Employees’ Pension systems. The National Pension scheme covers the Japanese Old Age Basic Pension, Old Age Welfare Pension, Disability Pension, Survivors’ Pension, childless widow’s pension, and death grant.
In Japan, the Business Facility Tax or Establishment Tax of 0.25% per worker is payable every month based on the employees’ monthly gross salary. This tax is applicable for employers whose total number of employees in offices located in the 23 special wards in Tokyo is more than 100 (tax exemption limit).
If a worker has died in the course of employment, the employer must pay a compensation equivalent to 1,000 days of the average wage to the bereaved family.
If a worker has died in the course of employment, the employer must pay an amount equivalent to 60 days at the average wage as funeral expenses to the person managing the funeral rites.
A lump sum is paid to a dependent who pays for the funeral. If there is no dependent, the actual cost is paid to the person who pays for the funeral.
The employer contributes 0.36% of wages for employees’ children up to age three while the rest is paid by the government.
The beneficiaries must satisfy an income test that varies depending on family composition.
JPY 15,000 a month is paid for each child younger than age three and JPY 10,000 a month is paid for each of the first two children aged three up to graduation from elementary school (JPY 15,000 a month for each subsequent child), and JPY 10,000 Ja month for each child in junior high school. For persons who do not meet an income test, JPY 5,000 a month is paid for each child up to graduation from junior high school.
The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. WorkMotion Software GmbH disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.
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