Hire in Japan

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.

Onboard your talent in Japan

in 10 minutes

Power icon

Accelerated onboarding

Fast-track your talent onboarding while ensuring 100% compliance with local regulations.

Calculator icon

Net salary calculator

Calculate net salary post deductions and compare it with the salary in other countries instantly.

Reading icon

Guidance & payroll management

Receive process support by an experienced team of experts & pay your talent on time and in their local currency

People icon

Hire in Japan through an

EOR

Easily onboard your remote talent in Japan through our Employer of Record (EOR) solution. Our subsidiaries and network partners make this process fast and 100% compliant.

A quick overview of Japan

Calendar remove icon
Cost of living index

$$$$ (15 of 139 countries)

Euro icon
Currency

Japanese Yen (JPY, ¥)

Dollar bill icon
Payroll frequency

Monthly

Basic facts

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

Official language/s

Japanese

People icon
Population

124.516 million (2023 est.)

US dollar icon
VAT - standard rate

5%

The national holidays mentioned below are valid for the year 2025.

January 1New Year’s Day
January 13Coming of Age DayMovable - The second Monday of January
February 11National Foundation Day
February 24Emperor's BirthdayIn lieu
March 20Vernal Equinox DayMovable - The date of the Northward equinox in Japan Standard Time
April 29Shōwa Day
May 3Constitution Memorial Day
May 5Children’s Day
May 6Greenery DayIn lieu
July 21Marine DayMovable - The third Monday in July
August 11Mountain Day
September 15Respect for the Aged DayMovable - The third Monday of September
September 23Autumnal Equinox DayMovable - The date of Southward equinox in Japan Standard Time
October 13Sports DayMovable - The second Monday in October
November 3Culture Day
November 24Labor Thanksgiving DayIn lieu

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.

  • There is a Happy Monday system where public holidays are planned on Mondays to grant the benefit of an extended weekend to employees on a five-day workweek.
  • A 2019 regulation has made it mandatory for managers to take at least five days off out of their annual leave allocation of 10-20 days. Japan has one of the lowest utilization of holidays in the world.
  • There is no statutory provision for sick leave.
  • A physical checkup is mandatory for all companies. The cost of the physical checkup varies depending on the employee’s age and the clinics, as clinics/doctors are able to decide the cost at their discretion.
  • Stress checkup is only mandatory when the company has more than 50 employees. For companies with up to 50 employees, the stress check up is just an optional, non-statutory benefit.
  • Employers with more than 50 employees are required to provide access to all employees for consultations with an Industrial Doctor that are authorized by the Japan Doctors’ Association.
  • Guidelines to promote the appropriate introduction and implementation of telework indicate that it is important for labor and management to establish rules on telework in advance.

Social Insurance consists of:

  • Health and nursing insurance
  • Employment insurance
  • Employee Pension Insurance
  • Worker’s accident compensation insurance

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 0.9% 0.55% No limit
Workmen’s accident compensation insurance
  • 0.25-2.60%* (Manufacturing)
  • 0.25-8.8%** (Other businesses)
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.

Working Hours

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. 

Overtime

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:

  • Overtime (typically over eight hours a day): an additional 25%, at maximum, 50%
  • Overtime (above 60 hours in a month): additional 50%
  • Night-time (defined as working between 10 pm and 5 am): additional 25%
Probation Period

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. 

Termination Notice Period

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:

  • A person hired on a day-to-day basis who has been employed consecutively for a period of less than one month;
  • A person employed for a fixed period of no longer than two months;
  • A person employed in seasonal work for a fixed period of no longer than four months;
  • A person who is in a probationary period and who has been employed consecutively for a period of fewer than 14 days.
Working Hours

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. 

Overtime

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:

  • Overtime (typically over eight hours a day): an additional 25%, at maximum, 50%
  • Overtime (above 60 hours in a month): additional 50%
  • Night-time (defined as working between 10 pm and 5 am): additional 25%
Probation Period

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. 

Termination Notice Period

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:

  • A person hired on a day-to-day basis who has been employed consecutively for a period of less than one month;
  • A person employed for a fixed period of no longer than two months;
  • A person employed in seasonal work for a fixed period of no longer than four months;
  • A person who is in a probationary period and who has been employed consecutively for a period of fewer than 14 days.

Book a free demo to access this information

Social Insurance consists of:

  • Health and nursing insurance
  • Employment insurance
  • Employee Pension Insurance
  • Worker’s accident compensation insurance

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 0.9% 0.55% No limit
Workmen’s accident compensation insurance
  • 0.25-2.60%* (Manufacturing)
  • 0.25-8.8%** (Other businesses)
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.