Minimum Wage

General

The National Minimum Wage in Japan is based on Prefecture. The minimum hourly wage for Tokyo is 985 JPY, Osaka is 936 JPY, and Kyoto is 882 JPY.

Payroll

Payroll Cycle

The payroll cycle in Japan is generally monthly, and payments are to be made on the 25th of each month.

13th Salary

In Japan, it is customary to pay a “13th month,” or even “14th-month” salary as a summer bonus paid in June and as a winter bonus paid in December. However, today, more international companies are adopting a straightforward 12-month pay period setup.

Working Hours

General

The standard working hours within Japan are 8 hours per day, 40 hours per week.

Overtime

All work above the standard weekly working hours is paid as overtime and regulated by employment contract/collective agreements. In general, if an employee is expected to work overtime regularly, a written agreement must be filed with the Labour Inspection Office.

Overtime work of up to 60 hours per month must be at least 25% of the normal hourly wage and overtime work that exceeds 60 hours per month, must be at least 50% of the normal hourly wage. Employees in managerial and supervisory positions as defined under the Labour Standards Act are exempt from the aforementioned, however, the late-night work allowance is still applicable.

Overtime payment is calculated as an additional payment to the hourly base salary as follows:

• Overtime (typically over 8 hours a day): additional 25.00%
• Night-time (22:00 – 05:00): additional 25.00%
• Weekends and Holidays: an additional 35.00%
• Night-time (continuing from overtime): additional 50.00%
• Holiday (continuing from night-time): additional 60.00%

Working Week

Monday-Friday

Leave

Paid Time Off

Paid leave in Japan is set in the employment contract as dependent upon the years of employment. This paid leave is in addition to any public holidays.

• Employees with up to six months of service are entitled to 10 days of paid leave
• Employees with up to one and a half years’ service are entitled to 11 days of paid leave
• Employees with up to two and a half years of services are entitled to 12 days of paid leave
• Employees with up to three and a half years of services are entitled to 14 days of paid leave
• Employees with up to four and a half years of services are entitled to 16 days of paid leave
• Employees with up to five and a half years of services are entitled to 18 days of paid leave
• Employees with up to six and a half years of services are entitled to 20 days of paid leave

Public Holidays

They are 16 public holidays. While there are no legal requirements to pay for public holidays, it is common to grant those days as paid days off.

If a national holiday falls on a Sunday, the next working day will become a public holiday.

Sick Days

Sick leave is not mandatory; some companies may introduce their own sick leave policies, and employees often use their holiday to cover sick leave or claim social insurance.

Maternity Leave

All female employees are eligible for maternity benefits, consisting of 14 weeks paid leave, six weeks before the due date, and eight weeks after.

The maternity payment is made by the Social Insurance based on the National Health Insurance rates, which are currently 420,000 JPY per child.  However, suppose the employee is enrolled in the employees’ Health Insurance. In that case, they may receive a Maternity Allowance of 2/3rds of the regular salary rate from 42 days before birth until 56 days after delivery.

Paternity Leave

The father is entitled to paid paternity leave for up to one year after the birth as childcare leave. Paternity leave is referred to as ‘childcare leave’ in Japan, and new fathers are entitled to this benefit. However, the employee does not receive a salary while on leave unless stated in the employment contract. They are entitled to a partial allowance from social security.

Parental Leave

Childcare leave can be taken by the mother or the father and starts from the day after the maternity leave ends. Labor insurance covers childcare leave, and an employee can take childcare leave until the child is one year old.  If both parents take childcare leave, the leave is then extended to when the child is one year and two months old.

Other Leave

In Japan, in the event of the death of an immediate family member, an employee is entitled to bereavement leave. For the death of a father, mother, spouse, or child, an employee is entitled to 5 days of leave and three days for the death of a grandparent, grandchild, sibling, child’s spouse, or spouse’s parent.

In addition, when the employee is the person in charge of funeral arrangements, they can request an additional two days’ leave.

Employees can also take Family care leave, which is an unpaid leave to care for a spouse, child, parent, or grandparent for up to 3 months.

Termination

Termination Process

The termination process varies according to the employment agreement and collective agreement in place. It is based on the type of contract, the job role, the region, and the reason for termination.

Notice Period

The notice period in Japan is usually 30 days, and if notice isn’t given, the employer can provide payment in lieu.

Severance Pay

In Japan, there is no statutory severance pay regulation.

Probation Period

The probation period in Japan for permanent employees is generally between 3 and 6 months.

VISA

VISA

Before arriving in Japan, foreign nationals who want to work in Japan need a work visa from their local Japanese Embassy or consulate.  There are many different statuses for residence visas allowing the holder to only work in the specified industry.  It is expected that a university degree or extensive professional experience in the specialist field is needed to qualify for a working visa, which usually requires an employer to sponsor.

All Foreign workers need an ‘Individual Number’ for administrative procedures for social security, taxation, and disaster response.

VAT

General

The standard rate of VAT in Japan is 10.00%.