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Payroll and benefits guide

Japan

CapitalTokyo
Fiscal Year1 January - 31 December
Date Formatyyyy/mm/dd
CurrencyJPY (Japanese Yen)
Payroll FrequencyMonthly
Employer Taxes15.65% – 16.46%
Employee Costs14.69% – 15.5%

Overview

Languages
Japanese
Income tax
5% – 45%
VAT
10%
Reduced rates: 8%. Consumption tax; the 8% rate covers food and beverages (excluding dining out) and newspaper subscriptions

Contributions

Employer

4.925%
Health insuranceTokyo rate under the Japan Health Insurance Association from March 2026; varies by prefecture and insurer. Capped at standard monthly remuneration of JPY 1.39 million
9.15%
Employees' pension insuranceCapped at standard monthly remuneration of JPY 650,000
0.81%
Long-term care insuranceOnly for employees aged 40–64
0.85%
Employment insuranceGeneral business rate from April 2026
0.36%
Child allowance contributionEmployer only
0.115%
Child and childcare support levyNew from April 2026; collected with health insurance
0.25% – 8.8%
Workers' accident compensation insuranceEmployer only; 0.25% for most office-based businesses
15.65% – 16.46%
Total employer costFor office-based roles in Tokyo; higher for high-risk industries

Employee

4.925%
Health insuranceTokyo rate; varies by prefecture and insurer
9.15%
Employees' pension insurance
0.81%
Long-term care insuranceOnly for employees aged 40–64
0.5%
Employment insuranceFrom April 2026
0.115%
Child and childcare support levy
14.69% – 15.5%
Total employee costExcludes national income tax and resident tax

Authority Payments

Authority Payment
National Tax Agency (local tax office)
Paid To
Income tax withheld from salaries
Due Date
By the 10th of the following month; small employers can apply to pay twice a year
Method
Bank, e-Tax, or direct debit
Authority Payment
Municipal governments
Paid To
Resident (inhabitant's) tax withheld from salaries
Due Date
By the 10th of the following month
Method
Payment slip or eLTAX to each employee's municipality
Authority Payment
Japan Pension Service and health insurer
Paid To
Health, pension, and long-term care insurance
Due Date
By the end of the following month
Method
Automatic bank debit
Authority Payment
Labor Standards Inspection Office
Paid To
Labor insurance (employment insurance and workers' compensation)
Due Date
Annual declaration and payment from 1 June to 10 July, with installments available
Method
Annual labor insurance declaration

Minimum Wage & Working Hours

Minimum wage
JPY 1,085 – 1,280 / Hourly
Prefectural rates for fiscal 2026, taking effect between 1 October and early December 2026. Tokyo is the highest; the national weighted average is JPY 1,177
Standard working hours
8 hours per day, 40 hours per week
Overtime requires a labor-management agreement (Article 36) and is generally capped at 45 hours a month and 360 hours a year
Overtime
125% for overtime, 150% beyond 60 hours a month, 135% on statutory rest days, and an extra 25% for late-night work (10 p.m. – 5 a.m.)

Leave

  • Annual leave10–20 days10 days after 6 months with 80% attendance, rising to 20 days after 6.5 years. Employers must ensure employees take at least 5 days a year
  • Sick leaveNo statutory paid sick leaveHealth insurance pays a sickness allowance of about two-thirds of standard pay from day 4, for up to 18 months
  • Maternity leave14 weeks (6 weeks before and 8 weeks after birth)Health insurance pays about two-thirds of standard pay; social insurance premiums are waived
  • Paternity leaveUp to 4 weeks within 8 weeks of birthPostnatal childcare leave that can be split in two; employment insurance pays 67% of wages
  • Parental leaveUntil the child turns 1, extendable to 2Employment insurance pays 67% for the first 180 days and 50% after; a top-up applies when both parents take leave
  • Public holidays16 national holidaysNot legally required paid days off, but most companies close

Termination

Probation period
Commonly 3–6 months; notice rules apply after the first 14 days
Notice period
30 days, or 30 days' average wages in lieu
Severance pay
No statutory severance; many employers pay a retirement allowance under company rules
13th salary
Not mandatory; summer and winter bonuses are common and often written into work rules
Notes
Dismissal must be objectively reasonable and socially appropriate, so negotiated exits with a package are common

Benefits

  • Social insuranceMandatory

    Health, pension, employment, and workers' compensation insurance

  • Commuting allowanceCommon

    Reimbursement of commuting costs, tax-free up to set limits

  • Summer and winter bonusesCommon

    Often 1–3 months' salary each, paid in June or July and December

  • Retirement allowanceCommon

    Lump sum on leaving under company rules

Visas & Work Permits

  • Engineer/Specialist in Humanities/International Services

    Duration
    3 months to 5 years, renewable
    Requirements
    Certificate of Eligibility sponsored by the employer, a relevant degree or experience, and pay comparable to Japanese staff

  • Highly Skilled Professional

    Duration
    5 years, with a fast track to permanent residence
    Requirements
    At least 70 points for education, experience, salary, and other factors

  • Intra-company Transferee

    Duration
    3 months to 5 years
    Requirements
    Transfer from an overseas affiliate after at least 1 year with the group

FAQ

Sources

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