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

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.

Employment Contract

In Japan, there are generally four types of labour contract(work contract):

  • Part-time Job or arubaito
  • Dispatch or Haken-shain
  • Fixed contract or keiyaku-shain
  • Non-fixed contract or seishain

Due to amendments to the Enforcement Regulations of the Labor Standards Law, the rules for clearly stating working conditions have been changed from 1st of April 2024. Specifically, new items will be added to the list of items that must be clearly stated when concluding or renewing a labor contract:

  • At the time of conclusion of all labor contracts and at the time of renewal of fixed-term labor contracts.
  • Explicit statement a: Scope of change in place of work and duties

The “scope of change” here refers to the location of employment and job duties that may change due to future reassignment.

Explicit item b: Existence and details of renewal limits (total contract period or maximum number of renewals)

In addition, if the renewal limit is established or shortened after the initial labor contract is signed, the reason for the change must be explained to the worker in advance.

  • At the time of renewal of a contract for which the right to apply for indefinite conversion based on the indefinite conversion rule arises
  • Explicit statement c: Opportunity to apply for indefinite conversion
  • Explicit statement d: Working conditions after indefinite conversion

Statutory Contributions

Employees’ Pension Insurance enrolls employees; National Pension System enrolls people who are not eligible for Employees’ Pension Insurance.

TypeDetailsEmployer ContributionEmployee Contribution
Health Insurance – for employee under 40 years of ageMedical benefits

4.955%
Maximum Contribution Base: 1,390,000 JPY

Rates vary by prefectures

4.955%
Maximum Contribution Base: 1,390,000 JPY

Rates vary by prefectures

Nursing Care Insurance – for employees over 40 years of ageMedical benefits0.8%
Maximum Contribution Base: 1,390,000 JPY
0.8%
Maximum Contribution Base: 1,390,000 JPY
Employees’ Pension InsuranceRetirement benefits9.15%
Maximum Contribution Base: 650,000 JPY
9.15%
Maximum Contribution Base: 650,000 JPY
Workers’ CompensationUnemployment securityRates vary by industries, 0.25%-11.8%
Employment insuranceWork injury benefits0.95%0.6%
Child Care InsuranceChildcare allowance0.36%
Cap: 650,000 JPY
 Total of aboveAbout 16.5-28%About 15.5%

Minimum Wage

The statutory minimum wage of Japan had been adjusted and taken effect from October 2024 as following:

Name of PrefecturesMinimum Hourly RateEffective Date
Hokkaido1,010 JPY1 October 2024
Aomori953 JPY5 October 2024
Iwate952 JPY27 October 2024
Miyagi973 JPY1 October 2024
Akita951 JPY1 October 2024
Yamagata955 JPY19 October 2024
Fukushima955 JPY5 October 2024
Ibaraki1,005 JPY1 October 2024
Tochigi1,004 JPY1 October 2024
Gunma985 JPY4 October 2024
Saitama1,078 JPY1 October 2024
Chiba1,076 JPY1 October 2024
Tokyo1,163 JPY1 October 2024
Kanagawa1,162 JPY1 October 2024
Toyama998 JPY1 October 2024
Ishikawa984 JPY5 October 2024
Fukui984 JPY5 October 2024
Niigata985 JPY1 October 2024
Yamanashi988 JPY1 October 2024
Nagano998 JPY1 October 2024
Gifu1,001 JPY1 October 2024
Shizuoka1,034 JPY1 October 2024
Aichi1,077 JPY1 October 2024
Mieken1,023 JPY1 October 2024
Shiga1,017 JPY1 October 2024
Kyoto1,058 JPY1 October 2024
Osaka1,114 JPY1 October 2024
Hyogo1,052 JPY1 October 2024
Nara986 JPY1 October 2024
Wakayama980 JPY1 October 2024
Tottori957 JPY5 October 2024
Shimane962 JPY12 October 2024
Okayama982 JPY2 October 2024
Hiroshima1,020 JPY1 October 2024
Yamaguchi979 JPY1 October 2024
Tokushima980 JPY1 November 2024
Kagawa970 JPY2 October 2024
Ehime956 JPY13 October 2024
Kochi952 JPY9 October 2024
Fukuoka992 JPY5 October 2024
Saga956 JPY17 October 2024
Nagasaki953 JPY12 October 2024
Kumamoto952 JPY5 October 2024
Oifen954 JPY5 October 2024
Miyazaki952 JPY5 October 2024
Kagoshima953 JPY5 October 2024
Okinawa952 JPY9 October 2024

Public Holidays

The Public Holidays in Japan in 2025 (Reiwa 7) is shown as following. Please refer to the announcement of cabinet office, government of Japan.

Holiday Name Date
New Year’s Day 1 January 2025
Coming of Age Day 13 January 2025
National Day 11 February 2025
Emperor’s Birthday 23 February 2025
Emperor’s Birthday Holiday 24 February 2025
Spring Equinox 20 March 2025
Shōwa Day 28 April 2025
Constitution Memorial Day 3 May 2025
Greenery Day 4 May 2025
Children’s Day 5 May 2025
Greenery Day Holiday 6 May 2025
Sea Day 21 July 2025
Mountain Day 11 August 2025
Respect for the Aged Day 15 September 2025
Autumn Equinox 23 September 2025
Health and Sports Day 13 October 2025
Culture Day 3 November 2025
Labour Thanksgiving Day 23 November 2025
Labour Thanksgiving Day 24 November 2025

Working Hours

Normal Working Hours

  • The Labor Standards Act sets the regular Japanese workweek at no more than 40 hours and the standard workday at no more than 8 hours, excluding rest periods, subject to certain exceptions relating to flexible work schedules.
  • Normal Working Hours is normally from 8.30am to 5.00pm.

Rest Time

  • An employer shall provide workers with at least 45 minutes of rest periods during working hours when working hours exceed 6 hours; An employer shall provide workers with at least 1 hour when working hours exceed 8 hours.
  • Employers must provide workers with at least 1 rest day per week (7 days) or at least 4 rest days during a four-week period.

Night Work

  • Night working hours are regarded as work between 10:00 pm on one day and 5:00 am the next day.

Overtime

  • Any hours worked in excess of standard working hours are considered overtime.
  • Overtime on regular days:

Normal working hour from 8.30am to 5.00pm, with one-hour lunch break

8:30AM – 5:00PM 5:30PM 10:00PM – 5:00AM
7.5H 0.5H 4.5H 7H
Regular Hours Overtime within Regular Hours Overtime beyond Regular Hours Overtime beyond Regular Hours + Night Work
Overtime Rate: 125% Overtime Rate: 150%
  • Overtime on non-working days:

From 8.30am to midnight

9:00AM 10:00PM – 12:00AM
12H 2H
Work on Days Off Overtime beyond Regular Hours + Night Work
Overtime Rate: 135% Overtime Rate: 160%

Other Regulations

  • Employers need to track employees’ working hours (attendance) to ensure their health. Employers are responsible for providing one annual physical check-up for their employees, special industries may have two annual physical check-ups.
  • Japan is a country prone to natural disasters such as earthquakes and typhoons. Employers should organise regular training and formulate safety guidance / escape manual and other preventions to ensure the workplace safety.

Probationary Period

There is no concept of legal probationary period in Japan, but the employment relationship can be terminated within 14 days from the contract start date.

Leave

Statutory leaves in Japan include:

TypeApplicable toDetails
Paid Annual LeaveEmployees who have served continuously for 6 months or more and have been worked at least 80 % attendance of total working days in their continuous service10-20 days(Vary by work hours, service year)
Pregnancy and Maternity LeaveFemale EmployeesPre-natal leave: 6 weeks (multiple births: 14 weeks) + post-natal leave:8 weeks(2/3 of ordinary daily rate)+ Antenatal check-up leave
Child Care LeaveEmployees who have served for one year and have been working two days or more every weekOne year (not fully paid, until child reaches one year old)
Breast Feeding LeaveFemale Employees with child ≤ one year of ageTwice, 30 minutes per each (unpaid)
Menstruation LeaveFemale EmployeesAccording to the situation (unpaid)
Family Care LeaveAll Employees5-93 days (could be unpaid if not specific in the work rule)
Sick Child LeaveAll employees whose children are under school age,effective from 1st of April, 2025, it is applicable to employees whose children are under grade 3Vary by number of children
• One child: 5 days
• Two or more children: 10 days
Leave for Civil Rights and Public DutyAll EmployeesAccording to time on voting or performing public duties

Termination and Compensation

Termination Notice

Termination by the employer

30 days, with proper preparation 3 months in advance. Because it is almost impossible to dismiss employees in Japan.

Resignation by the employee

Most companies in Japan will set up a one-month notice period for the employee and such term would be stated in the duly signed labour contract (work contract).

Compensation

The compensation is paid according to the mutual agreement signed between the employee and the employer.

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 Singaporean 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 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 United States 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.

Subscribe to newsletter*
This field is for validation purposes and should be left unchanged.

Share this guide

Share on facebook
Share on linkedin
Share on email

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!

Find out more?

Explore our award-winning platform

One-all-one HR global platform with integrated features to manage your business.

Privacy Consent*
This field is for validation purposes and should be left unchanged.