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Global Expansion Guide

Japan

Manage and pay easily your employees easily with BIPO in Japan and 170+ other markets. Build your international teams today with our global Employer of Record service!

employment guide_currency

Currency

Japanese Yen (JPY)

employment guide_language

Language

Japanese

employment guide_capital

Capital

Tokyo

Employer of Record Japan

Employment Contract

Statutory Contributions

Minimum Wage

Public Holidays

Working Hours

Leave

Termination and Compensation

BIPO as your Employer of Record

Benefits of BIPO EOR Service in Japan

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Employer of Record Japan

Embark on your business expansion in Japan with BIPO’s Employer of Record (EOR) services. Designed to assist you in navigating the intricacies of local employment laws and regulations, we can help ensure a smooth transition for your business and workforce.

As an Employer of Record (EOR), we act as your legal employment entity, streamlining the process of business expansion. Allowing businesses to focus on their core business operations while the EOR manages all aspects of compliance, payroll, HR, and employee benefits when venturing into the Japan market. An EOR provider addresses the common challenges associated with local employment laws, payroll regulations, and work permit requirements.

This guide was last updated on 26 January 2026. The content in this guide is current as of this date and based on common business practices.

Employment Contract

Types of Employment Contracts

  • Fixed-term contracts: Generally up to 3 years; extendable to 5 years for employees with highly specialised expertise or those aged 60 and above.
  • Project-based contracts: For the completion of specific projects.
  • Open-ended (indefinite-term) contracts.

Mandatory Contract Particulars

The following items must be addressed when concluding an employment contract:

  1. Contract term.

  2. Renewal terms (Fixed-term contracts only):

    • Maximum total contract duration.
    • Maximum number of renewals (if applicable).
  3. Workplace and job scope, including permitted changes.

  4. Working hours and work arrangements:

    • Start and end times.
    • Overtime requirements.
    • Rest periods, holidays, and leave.
    • Shift arrangements (if applicable).

  5. Remuneration:

    • Amount, calculation method, and payment method.
    • Wage settlement and payment cycles.
    • Policies on salary adjustments.

  6. Retirement and termination matters:

    • Categories of employees covered.
    • Determination, calculation, and payment of retirement benefits.
    • Payment timing.

  7. Severance pay:

    • Eligibility, calculation method, payment method, and payment timing.
  8. Special payments, bonuses, and minimum wage compliance.
  9. Employee-borne expenses, such as meals or work supplies.
  10. Occupational safety and health provisions.
  11. Vocational training.
  12. Compensation for work-related injuries and assistance for non-work-related illnesses.
  13. Disciplinary and reward systems.
  14. Leave entitlements.

Notes:

  • Items 7–14 are not required if the employer has no corresponding systems in place.
  • Items 1, 3, 4, and 6 must be explicitly stated in writing (or equivalent form) in accordance with applicable law.

Statutory Contributions

Scope of Application: Applicable to employees of private enterprises.

Types Contribution Base (Upper & Lower Limits) Employee Contribution Employer Contribution

Workers’ Compensation Insurance

(Labour Insurance)

 – – Varies by industry (0.25–8.8%) + 0.02‰ Asbestos Insurance
Employment Insurance –

0.55% (General)

0.65% (Agriculture, Forestry, Fishery, Sake Manufacturing)

0.65% (Construction)

 0.9% (General)

1% (Agriculture, Forestry, Fishery, Sake Manufacturing)

1.1% (Construction)
Health Insurance

Lower Limit:

Wages: 58,000 JPY / month

4.955% (Tokyo)

Rates may vary by prefecture

4.955% (Tokyo)

Rates may vary by prefecture

Upper Limit:

Wages: 1,390,000 JPY / month

Bonuses: 5,730,000 JPY / year

Employees’ Pension Insurance

(Pension)

Lower Limit:

Wages: 88,000 JPY / month

 9.15% 9.15% + 0.36% (Childcare Subsidy)

Upper Limit:

Wages: 650,000 JPY / month

Bonuses: 1,500,000 JPY / month

Minimum Wage

Prefecture NameMinimum Hourly Wage (JPY)Effective Date
Hokkaido1,0754 October 2025
Aomori1,02921 November 2025
Iwate1,0311 December 2025
Miyagi1,0384 October 2025
Akita1,03131 March 2026
Yamagata1,03223 December 2025
Fukshima1,0331 January 2026
Ibaraki1,07412 October 2025
Tochigi1,0681 October 2025
Gunma1,0631 March 2026
Saitama1,1411 November 2025
Chiba1,1403 October 2025
Tokyo1,2263 October 2025
Kanagawa1,2254 October 2025
Niigata1,0502 October 2025
Toyama1,06212 October 2025
Ishikawa1,0548 October 2025
Fukui1,0538 October 2025
Yamanashi1,0521 December 2025
Nagano1,0613 October 2025
Gifu1,06518 October 2025
Shizuoka1,0971 November 2025
Aichi1,14018 October 2025
Mie1,08721 November 2025
Shiga1,0805 October 2025
Kyoto1,12221 November 2025
Osaka1,17716 October 2025
Hyogo1,1164 October 2025
Nara1,05116 November 2025
Wakayama1,0451 November 2025
Tottori1,0304 October 2025
Shimane1,03317 November 2025
Okayama1,0471 December 2025
Hiroshima1,0851 November 2025
Yamaguchi1,04316 October 2025
Tokushima1,0461 January 2026
Kagawa1,03618 October 2025
Ehime1,0331 December 2025
Kochi1,0231 December 2025
Fukuoka1,05716 November 2025
Saga1,03021 November 2025
Nagasaki1,0311 December 2025
Kumamoto1,0341 January 2026
Oita1,0351 January 2026
Miyazaki1,02316 November 2025
Kagoshima1,0261 November 2025
Okinawa1,0231 December 2025
National Weighted Average1,121–

Public Holidays

The public holidays listed below are national public holidays observed across Japan. Individual states and territories may observe additional public holidays. Please refer to official government announcements for the latest updates.

  • New Year’s Day
  • Coming of Age Day
  • National Foundation Day
  • Emperor’s Birthday
  • Vernal Equinox Day
  • Shōwa Day
  • Constitution Memorial Day
  • Greenery Day
  • Children’s Day
  • Marine Day
  • Mountain Day
  • Respect for the Aged Day
  • Autumnal Equinox Day
  • Sports Day
  • Culture Day
  • Labour Thanksgiving Day

Notes:

  • If a statutory holiday falls on a regular rest day, the next available non-statutory holiday shall be observed as the rest day.
  • If both the preceding and following days of a given day are statutory holidays, that day shall also be treated as a rest day.

Compensations and Exemptions: Refer to the provisions under 3. Working Hours.

Working Hours

Normal Working Hours

  • 8 hours/day.
  • 40 hours/week.

Rest Time

  • Daily Rest

    • Minimum 45 minutes for workdays exceeding 6 hours.
    • Minimum 1 hour for workdays exceeding 8 hours.

  • Weekly Rest Days

    • At least 1 day per week, or 4 days within any 4-week period.

Overtime Restrictions

Scenario Principle Upper Limit Absolute Upper Limit
Employees engaged in underground work or other work particularly harmful to health 2 hours/day –
Standard working hour system

45 hours/month

360 hours/year

 –
Flexible working hour system

42 hours/month

320 hours/year

 –
Special circumstances of a temporary and urgent nature

100 hours/month

720 hours/year

100 hours/month (including overtime + public holidays)

720 hours/year

6-month rolling average ≤ 80 hours/month
Notes:
  • Monthly average overtime limit: The average monthly total of overtime beyond standard working hours plus work on public holidays over the most recent 2–6 months must not exceed 80 hours/month.
  • Maximum months exceeding 45 hours: In a year, the number of months where overtime exceeds 45 hours must not exceed 6 months (excluding months with special exceptions).
  • Application to certain industries: From April 1, 2024, the overtime restrictions for special circumstances of a temporary and urgent nature apply to the construction, motor vehicle driving, and related industries, with some exceptions. Research and development for new products is excluded.

Overtime Compensation

Category Minimum Overtime Rate
Work beyond statutory working hours 25%
Night work (10:00 PM to 5:00 AM) 25%
Work on rest days or public holidays 35%
Overtime + night work 25% + 25%
Work on rest days / public holidays + night work 25% + 35%
Overtime exceeding 60 hours/month 50%
Overtime exceeding 60 hours/month + night work 25% + 50%

Notes:

  • Overtime pay is calculated based on the regular hourly wage, excluding family allowances, commuting allowances, and other wages prescribed by law, such as living-alone allowances, child education allowances, housing allowances, special payments, and wages with a payment cycle exceeding one month.

  • Employers may grant paid leave in lieu of overtime pay provided that both of the following conditions are met:

    1. A written agreement has been concluded with the trade union representing the majority of employees at the workplace, or – where no such union exists – with a representative elected by the majority of employees.
    2. The agreement has been filed with the relevant government authority.

Exemptions from Working Hour Regulations

  • Employees engaged in agricultural activities, including land cultivation or reclamation, planting, cultivation, harvesting, logging, and other related operations.
  • Employees engaged in livestock and fisheries activities, including animal breeding, aquaculture, sericulture, harvesting, and the cultivation of aquatic plants and animals.
  • Supervisory or managerial employees, as well as those handling confidential matters, regardless of the industry.
  • Employees engaged in monitoring or intermittent work, provided that the employer has obtained the required approval from the relevant administrative authority.
  • Certain highly paid and highly skilled employees in designated workplaces, subject to approval by the enterprise’s internal committee, the employee’s consent, and the implementation of appropriate health and rest safeguards.

Leave

Annual Leave

  • Employer Type: Single employer
  • Eligibility: Employees who have completed at least six months of continuous service and achieved an attendance rate of 80% or higher during the preceding year.
  • Length of Annual Leave:
Years of Service Weekly Working Hours ≥ 30 Hours (Days) Weekly Prescribed Working Hours < 30 Hours (Based on Weekly Working Days) (Days)
4 days/week 3 days/week 2 days/week 1 day/week
0.5 10 7 5 3 1
1.5 11 8 6 4 2
2.5 12 9 6 4 2
3.5 14 10 8 5 2
4.5 16 12 9 6 3
5.5 18 13 10 6 3
≥ 6.5 20 15 11 7 3
  • Annual Leave Allowance: Full pay.
  • Conversion of Annual Leave: If an employee leaves the company without using their annual leave, the employer shall pay full compensation.

Sick Leave

Japan has no statutory paid sick leave requirement under national law. Eligibility, duration, and remuneration for sick leave shall be governed by the employer’s internal policies.

Maternity Leave

  • Eligibility:

    • Female employees who are pregnant or giving birth.
    • Application must be submitted at least 6 weeks before the expected due date (14 weeks in the case of multiple pregnancies).

  • Duration:

    • Single birth: 98 days (6 weeks before childbirth + 8 weeks after childbirth).
    • Multiple births: 154 days (14 weeks before childbirth + 8 weeks after childbirth).
    • After 6 weeks post-childbirth, an employee may return to approved work upon request, provided a physician confirms it is safe.

  • Maternity Leave Benefits:

    • Leave itself is unpaid.
    • A one-time maternity benefit, equivalent to two-thirds of the average daily wage, is payable through health insurance.

Other Leave Types

  • Paternity Leave

    • Employees must notify the employer at least 2 weeks in advance.
    • Up to 4 weeks of leave, which may be taken in up to two instalments within 8 weeks after childbirth.
    • Allowance: Two-thirds of the average daily wage, paid through Employment Insurance.

  • Parental Leave

    • Applicable to regular employees and eligible fixed-term employees whose contract expiry is not earlier than the child reaching 1 year and 6 months of age.
    • Employees must have completed at least 1 year of continuous service.
    • Notification must be given at least 1 month in advance.

    • Leave may be taken in up to two instalments from 8 weeks after childbirth until the child reaches 1 year of age.

      • Where childcare facilities are unavailable or similar circumstances apply, leave may be extended until 1 year and 6 months of age.
      • If such circumstances persist, leave may be further extended until the child reaches 2 years of age.

    • Allowance (paid through Employment Insurance):

      • Two-thirds of the average daily wage for the first 6 months;
      • One-half of the average daily wage thereafter.
    • Employers with 300 or more full-time employees must publicly disclose, at least once per year, the utilisation status of parental leave.

  • Extended Parental Leave (Both Parents Taking Leave)

    • Where both parents take leave and the following conditions are met, the child’s eligible age for parental leave may be extended to 1 year and 2 months:

      • The spouse applied for parental leave before the child reaches 1 year of age;
      • The applicant’s planned leave start date is before the child’s first birthday;
      • The applicant’s leave start date is on or after the first day of the spouse’s leave.
    • The maximum total leave duration per parent remains unchanged.

  • Childcare Leave

    • Applicable to employees raising a child under 9 years of age.
    • Leave must be used by 31 March following the child reaching 9 years of age.

    • Entitlement:

      • 5 days per year for one child;
      • 10 days per year for two or more children.
    • Any portion of a day taken is counted as one full day.

  • Family Care Leave

    • Applicable where a family member requires care.
    • Entitlement: 5 days per family member per year, up to a maximum of 10 days per year.

  • Long-Term Care Leave

    • Employees must have completed at least 1 year of service.
    • For fixed-term employees, the contract expiry date must not be earlier than 93 days plus 6 months after the commencement of leave.
    • For the same care recipient, leave may be taken up to three times, with a cumulative maximum of 93 days.
    • Allowance: Two-thirds of the average daily wage, paid through Employment Insurance.

  • Breastfeeding Breaks

    • Applicable to female employees caring for a child under 1 year of age.
    • Two breaks of 30 minutes per day.
    • Breaks are fully paid by the employer.

  • Menstrual Leave

    • Where a female employee experiences significant difficulty working due to menstruation, the employer shall not require her to work upon request.
    • The duration of leave shall be determined based on actual circumstances.

  • Civic Duty Leave

    • Employers may not refuse an employee’s request to exercise voting rights, other civil rights, or to perform public duties during working hours.
    • Employers may reschedule the time requested, provided it does not interfere with the exercise of such rights or duties.
    • The duration of leave shall be determined based on actual circumstances.

Termination and Compensation

Reasons for Termination

1. Fixed-Term Contracts

  • General rule: An employer may not terminate a fixed-term employee before the contract expires, except for unavoidable reasons.

  • Long-term or indefinite termination clauses: If the employment period exceeds five years or the termination date is uncertain, either party may terminate the contract after five years.

    • Employer must provide at least 3 months’ notice.
    • Employee must provide at least 2 weeks’ notice.

  • Immediate termination for unavoidable reasons:

    1. Even if the contract specifies a term, either party may terminate immediately if unavoidable reasons exist.
    2. If the fixed-term contract is over one year, the employee may terminate after one year, without the need to justify “unavoidable reasons.”

  • Bankruptcy of employer:

    • If the employer is adjudicated bankrupt, the employee or bankruptcy trustee may issue a termination notice.
    • The employment relationship terminates 2 weeks from the issuance of the notice.

2. Open-Ended (Indefinite Contracts)

  • Termination by Employer

    1. The employer may terminate the contract unilaterally, but only for objectively reasonable and socially acceptable grounds, such as:

    • Employee misconduct or fault.
    • Problematic work attitude.

    • Violations of instructions or workplace discipline.

      • Termination cannot be based solely on a single mistake. The court will ultimately assess the reasonableness of the termination by considering factors such as the employee’s degree of fault, the nature of the conduct, the extent of the employer’s resulting loss, whether the conduct was malicious or intentional, and the presence of any unavoidable circumstances.

    2. Employers must still fulfill their obligation to provide notice or payment in lieu of notice.

  • Termination by Employee

    • An employee may terminate the contract immediately if the actual working conditions significantly differ from the agreed terms.
    • If the employee has relocated for work and returns home within 14 days of termination, the employer is obliged to cover travel expenses.

Termination Notice Period

  • Employer’s Obligations

    1. Employers must provide at least 30 days’ advance notice prior to terminating employment; or
    2. Where such notice is not given, or the notice period is shortened, the employer must make payment in lieu of notice.

  • Payment in Lieu of Notice

    • Calculation:

      Number of required notice days (30 days or more) or the number of days by which the notice period is shortened × average daily wage.

  • Exemptions from Notice Obligations

    The employer is exempt from the notice or payment obligation in the following circumstances:

    1. Employees who have not completed the prescribed minimum continuous service period, including:
      2. Employee Type Prescribed Continuous Service Period
      Daily wage earners 1 month or more
      Fixed-term employees (term ≤ 2 months) Agreed contract term
      Seasonal workers (fixed term ≤ 4 months) Agreed contract term
      Probationary employees 14 days or more

    2. Suspension of business due to force majeure, such as natural disasters.
    3. Termination attributable to the employee’s own fault or reasons.

  • Employee Resignation

    • Fixed-term contracts: Employees may resign at any time after completing one year of service, except where completion of a specific project or business is an essential contractual condition.
    • Open-ended contracts: Employees must provide at least two weeks’ prior notice.

Compensation

Severance pay and other termination compensation are generally determined by agreement or negotiation. Any applicable severance arrangements must be clearly stipulated in the employer’s work rules or employment regulations.

BIPO as your Employer of Record

BIPO’s total HR solutions include our award-winning HR Management System, Global Payroll Outsourcing, Employer of Record service, and Athena BI.

As your EOR partner, our services are designed to provide a comprehensive, hassle-free experience:

  • Initial Consultation:

    The journey typically begins with an in-depth discussion to understand your specific business needs, ensuring our EOR services perfectly align with your objectives.

  • Payroll Management:

    We offer a streamlined payroll system that ensures timely and accurate salary disbursement, complete with statutory deductions and contributions in full compliance with Japanese regulations.

  • Contributions and Taxes:

    Our expertise in managing local social security requirements ensures your business complies with in-country financial obligations.

  • Compliance with Minimum Wage and Working Hours:

    We guarantee that your employment practices adhere to Japan’s minimum wage and working hours standards, safeguarding your business against potential legal issues.

  • Leave and Paid Time Off Management:

    Implement and manage leave policies that comply with Japan’s laws, ensuring a fair and transparent leave management system for your employees.

  • Regulatory Compliance:

    Stay ahead of local labour laws and regulations with our up-to-date compliance services, minimising legal risks for your business.

  • Other services:

    Work visa, permit applications, termination procedures.

Services may vary across countries.

Benefits of BIPO Employer of Record Service in Japan

Unlock your growth potential with BIPO’s Employer of Record service in Japan. Our EOR service empowers businesses with seamless scalability while ensuring regulatory compliance.

From smooth onboarding to risk mitigation, BIPO handles the administrative HR tasks, enabling companies to concentrate on core business functions and accelerating growth. Our local expertise and global reach ensure efficient operations, enhancing flexibility and reducing operational complexities

Stay up to date with the latest employment regulations.

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Frequently Asked Questions

An Employer of Record (EOR) is a partner company that acts as the official employer for your employees. 

An EOR company handles all the HR aspects and processes, including the legal complexities associated with regulatory and tax compliance.

As your EOR, BIPO supports your organisation by providing a comprehensive range of HR, payroll and advisory services to ensure your business stays compliant. These include end-to-end on/offboarding services for your employees (e.g.: payroll processing, HR and benefits administration, labour contracts, visa applications, payroll/tax compliance, and more).

By engaging BIPO as your EOR, your business benefits from: 

  • Compliance in the global markets where you operate
  • Reduced costs and risk mitigation
  • Overall workforce productivity, effectiveness, and efficiencies

A global EOR benefits organisations regardless of size or industry. It is especially useful for organisations that want to:

  • Scale their global business and be fully operational in foreign markets quickly
  • Reduce financial and HR complexities while expanding internationally
  • Minimise time spent trying to understand local labour laws and foreign tax systems
  • Stay compliant across global markets while reducing HR and administrative workflows
  • Benefit from a centralised and intuitive cloud HR platform to manage international teams

A global EOR enables businesses to fast-track their market entry into international market, and reduce the complexities of setting up multiple foreign entities.

When you partner with BIPO, we take on the the day-to-day administrative tasks, while you maintain full control of the business and delegate HR workflows and hiring needs.

Our vast network of business partners across 170+ markets globally supports your business expansion plans, with in-country HR experts providing localised support. Going global has never been easier!

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