Talent Wiki - Japan
Your quick guide on talent and labor compliance norms in Japan
Capital
Tokyo
Currency
Japanese Yen (JPY)
Languages
Japanese
Payroll Frequency
monthly
GDP per Capita
$39,243.37
Employer Tax
15.045%
Talent Overview
Known as the “Land of the Rising Sun”, Japan’s distinction from the rest of the world is not only its strategic geographical location but also due to its rich cultural virtues. Japanese people are known to be polite, organized, and have a good work ethic. In turn, the country has many merits to its name and is considered one of the most developed countries in the world.
Japan’s economy is ranked as the third-largest in the world by nominal GDP and fourth by Purchasing Power Parity (PPP) GDP. The country is also one of the world’s leading investors, having more than $220 billion in FDI (foreign direct investments) outflows each year.
Major economic hubs:
Tokyo, Osaka, and Kyoto
Skills in demand:
IT engineer, Cloud Computing Engineer, IoT Engineer, Country Manager.
Local Universities
The top universities in Japan are:
The University of Tokyo
Ranking
Local: 1
World: 78
Kyoto University
Ranking
Local: 2
World: 125
Keio University
Ranking
Local: 3
World: 201
Osaka University
Ranking
Local: 4
World: 303
Hokkaido University
Ranking
Local: 5
World: 323
Salary Data
Below listed are the average salaries for some common jobs in Japan.
| Job Title | Average Monthly Salary (in JPY) | Average Monthly Salary (in USD) |
| Financial Manager | 1,050,000 | 8008.24 |
| General Manager | 931,000 | 7100.64 |
| Business Development Manager | 834,000 | 6360.83 |
| Financial Analyst | 708,000 | 5399.84 |
| Business Analyst | 642,000 | 4896.46 |
| Project Manager | 619,000 | 4721.05 |
Talent Sourcing Tips
Top Local Job Boards:
GaijinPot, Daijob, Craigslist, JobsinJapan
Number of LinkedIn users:
3,372, 000
Top Recruitment Agencies:
Employing in Japan
Onboarding Japanese employees can be a real asset to businesses expanding their operations in the country. The first step to realizing this is to be familiarized with the Japanese labor regulations. The following section shall guide you through the onboarding process.
Employee Contract
There is no required language in Japanese employment contracts, provided it is written in a medium that all parties understand. However, most employers use the Japanese language for these documents.
Probation period
Employees in Japan can have 3 to 6 months of probation period.
Public and Provincial Holidays
| Date | Name | Type |
| January 1 | New Year | National Holidays |
| January 2nd | Holiday | National Holidays |
| January 9 | Coming-of-age day | National Holidays |
| February 11th | Foundation Day | National Holidays |
| February 23rd | Emperor birthday | National Holidays |
| March 21st | Vernal Equinox Day | National Holidays |
| April 29th | Showa Day | National Holidays |
| May 3rd | Constitution day | National Holidays |
| May 4th | Greenery day | National Holidays |
| May 5th | Children’s day | National Holidays |
| July 17th | Marine day | National Holidays |
| August 11th | Mountain day | National Holidays |
| September 18th | Respect for the Aged Day | National Holidays |
| September 23rd | Autumnal equinox | National Holidays |
| October 9 | Sports day | National Holidays |
| November 3rd | Culture Day | National Holidays |
| November 23rd | Labor Thanksgiving Day | National Holidays |
Employee Leaves
| Type of Leave | Time Period | Mandatory |
| Annual Leave | 10-20 days | Yes |
| Sick Leave | 0 days | No |
| Maternity Leave | 14 weeks | Yes |
Payroll
Payroll Cycle
Employees in Japan are paid monthly.
Minimum Wage
Minimum wage in Japan varies with location, ranging from 790 JPY to 1,072 JPY.
Overtime Pay
The standard working hours in Japan are 8 hours per day and 40 hours per week. Overtime is legal in the country, with a cap of 45 hours per month and 360 hours per year. The overtime pay varies as per the table below:
Bonus
13th Month Pay
13th month pay is customary in Japan. Most employers offer these incentives for their employees as a winter bonus, usually around December.
Employee Benefits
Japanese employees are entitled to numerous benefits during their employment. Below are some of them:
- Health & Medical Insurances
- Holidays & Annual Leave
- Maternity & Paternity Leave
- Sickness & Special Ability Leave
- Pensions
Taxes
Employer Payroll Tax
| Category | Tax Rate |
| Health Insurance | 4.935% |
| Welfare Pension | 9.15% |
| Employment Insurance | 0.6% |
| Child Allowance | 0.36% |
| Worker’s Accident Compensation Insurance | Varies on the type of business |
Employee Payroll Tax
| Category | Tax Rate |
| Health Insurance* | 4.905% |
| Welfare Pension | 9.15% |
| Unemployment Insurance | 0.5% (Upto March 2023) |
| Child Allowance | 0.36% |
*Note: There is an additional fixed rate of 0.82% for the long term health insurance that is applicable for ages of 40 and 64.
Employee Income Tax
| Taxable Income (JPY) | Tax Rate | Deduction (JPY) | Tax on base amount (JPY) |
| 0 – 1,950,000 | 5% | 0 | 0 |
| 1,950,000 – 3,300,000 | 10% | 97,500 | 97,500 |
| 3,300,000 – 6,950,000 | 20% | 427,500 | 232,500 |
| 6,950,000 – 9,000,000 | 23% | 636,000 | 962,500 |
| 9,000,000 – 18,000,000 | 33% | 1,536,000 | 1,434,000 |
| 18,000,000 – 40,000,000 | 40% | 2,796,000 | 4,404,000 |
| 40,000,000 and above | 45% | 4,796,000 | 13,204,000 |
VAT
The standard VAT rate in Japan is 10%. However, few goods and services are levied a VAT of 8%.
Offboarding & Termination
Employers terminating their employees must provide a notice of termination informing them of the reasons for the decision. In cases of summary dismissal, an employer may do so without any notice but must pay their employees 30-days worth of wages, known as a “notice allowance.”
A notice period of up to 30 days is generally observed in Japan.
A severance pay is not mandatory in Japan.
Visa and Immigration
According to the Japan Immigration Authority, foreign workers can legally work in the country if they have secured a Japanese work visa. Below are the types of visas in Japan:
- Regular Japan Work Visa
- Japan Highly Skilled Professional Visa
- Japan Working Holiday Visa
