Hire in Japan with confidence. Covers Shakai Hoken, welfare pension, employment insurance, labor standards and hiring compliance for 2026.
Capital
Tokyo
Language
Japanese
Average Salary
JPY 375,000
Payroll Cycle
Monthly
Employer Cost
15-17%
Paid Leave
10-20 days
Public Holidays
16 days
Tax Rates
5-45%
Detailed guides on the employment topics that matter most when hiring in Japan. Independently researched, updated for 2026.
A Godo Kaisha (GK) is Japan's equivalent of an LLC, introduced in 2006 under the Companies Act. It offers lower setup costs (~\u00A560,000 registration tax vs ~\u00A5200,000 for a KK), no board of directors requirement, flexible profit distribution, and 100% foreign ownership. Apple, Amazon, and Google all operate in Japan through GK structures. This guide covers formation steps, costs, the identical GK/KK tax treatment (effective 30-35%), the critical October 2025 Business Manager Visa reform (capital requirement increased to \u00A530 million), and when an Employer of Record makes more sense than setting up an entity.
Read ArticleJapan's minimum wage hit a record national average of JPY 1,121/hour in October 2025, the largest annual increase in history. With the government targeting JPY 1,500 by the late 2020s and a new Child Rearing premium launching in April 2026, employer costs are rising fast. This guide covers regional rates, employer social insurance, overtime rules, income tax, and what it means for EOR arrangements.
Read Article
We independently review and rank providers based on their actual performance in Japan, covering pricing transparency, onboarding speed, in-country support and hiring compliance.
Japan’s labor standards enforcement is among the strictest globally. The Labor Standards Inspection Office conducts unannounced audits, and violations carry criminal penalties. A provider cutting corners on overtime tracking or leave management creates direct legal exposure.
When you hire in Japan, the doctrine of abusive dismissal makes termination near-impossible, semi-annual bonuses of 2-4 months are culturally expected and social insurance applies separately to both salary and bonuses.
| Fact | Value |
| Minimum Wage | JPY 1,121/hour national avg (Tokyo JPY 1,238) |
| Probation Period | 3-6 months (contractual) |
| Standard Working Hours | 40 hours/week (8 hours/day) |
| Paid Annual Leave | 10-20 days (by years of service) |
| Notice Period | 30 days minimum (employer-initiated) |
| 13th Salary | Not statutory (2-4 month bonuses common) |
| Sick Leave | No statutory paid (Shakai Hoken 2/3 from day 4) |
| Maternity Leave | 14 weeks (6+8) at 2/3 pay via social insurance |
Good to Know: Japan has no statutory paid sick leave. Employees use annual leave for short illness. For longer absence, Shakai Hoken pays approximately two-thirds of salary from day 4, for up to 18 months. Semi-annual bonuses (typically June and December) of 2-4 months’ salary are culturally near-mandatory for retention, though not legally required. The 5-year conversion rule means consecutive fixed-term contracts totaling 5 years give the employee the right to request permanent status. Golden Week (April 29 to May 5) and New Year (January 1-3) effectively shut down most businesses. The April 2026 Child and Childcare Support Contribution of 0.23% is a new employer-only levy collected alongside health insurance.
When you hire in Japan, employer social insurance of 15-17% is moderate, but culturally expected bonuses of 2-4 months and separate social insurance calculations on those bonuses push true annual cost well above the headline rate.
| Employer Contributions | |
| Contribution | Employer Rate |
| Health Insurance (Kenko Hoken) | ~4.9-5.0% (varies by prefecture, Tokyo 9.85% total / 2) |
| Nursing Care Insurance (age 40+) | ~0.81% (1.62% total / 2) |
| Welfare Pension (Kosei Nenkin) | 9.15% (18.3% total / 2) |
| Employment Insurance (Koyou Hoken) | 0.95% |
| Workers’ Accident Insurance (Rosai Hoken) | 0.25-8.8% (by industry, employer only) |
| Child/Childcare Contribution (from Apr 2026) | 0.23% (employer only) |
| Total Employer Cost | ~15-17% of standard remuneration |
| Employee Taxes | |
| Tax / Contribution | Employee Rate |
| Income Tax (national, progressive) | 5-45% |
| Resident Tax (prefectural + municipal) | ~10% |
| Reconstruction Surtax | 2.1% of income tax (until 2037) |
| Health Insurance (employee share) | ~4.9-5.0% |
| Nursing Care Insurance (age 40+) | ~0.81% |
| Welfare Pension (employee share) | 9.15% |
| Employment Insurance (employee share) | 0.55% |
Japan’s headline employer cost of 15-17% looks moderate by European standards, but the real cost is higher. Semi-annual bonuses of 2-4 months’ salary are culturally expected (though not legally required), and social insurance applies to bonuses separately. For an employee on JPY 6,000,000 base with a JPY 2,000,000 bonus, total employer cost including social insurance on both salary and bonus runs approximately JPY 7,300,000 to JPY 7,500,000. Budget for the bonus as a near-certainty, not an optional extra.
| Date | Holiday |
| January 1 | New Year’s Day (Ganjitsu) |
| January 12 | Coming of Age Day (Seijin no Hi) |
| February 11 | National Foundation Day (Kenkoku Kinen no Hi) |
| February 23 | Emperor’s Birthday (Tenno Tanjobi) |
| March 20 | Vernal Equinox Day (Shunbun no Hi) |
| April 29 | Showa Day (Showa no Hi) |
| May 3 | Constitution Memorial Day (Kenpo Kinenbi) |
| May 4 | Greenery Day (Midori no Hi) |
| May 5 | Children’s Day (Kodomo no Hi) |
| May 6 | Substitute Holiday |
| July 20 | Marine Day (Umi no Hi) |
| August 11 | Mountain Day (Yama no Hi) |
| September 21 | Respect for the Aged Day (Keiro no Hi) |
| September 23 | Autumnal Equinox Day (Shubun no Hi) |
| November 3 | Culture Day (Bunka no Hi) |
| November 23 | Labor Thanksgiving Day (Kinro Kansha no Hi) |
Many Japanese companies observe additional days off during New Year (typically January 1-3) and Obon (mid-August) that are not national holidays but are standard practice. Golden Week (April 29 to May 5) often becomes a full week off when companies bridge the gaps. Employees required to work on public holidays are entitled to a 135% overtime premium.
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