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SALARY PAYMENT IN Japanese Yen (JPY, ¥)
CONTRACT LANGUAGES Japanese / English
PAYROLL TAX 14.98% – 24.43%
PAYROLL CYCLE Monthly
TIME TO HIRE 24 hours
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Hire and pay talents
with Horizons in
180+ countries
For decades, Japan has been an economic powerhouse of the Asia-Pacific region. A range of free-trade agreements, both regionally and with North America and Europe ensure that Japan retains its spot as a major source of industrial manufacturing and innovation.
When it comes to hiring employees, Japan presents a highly skilled, industrious workforce — an ideal location for tech company expansion, in particular. This coupled with a business-friendly and predictable regulatory framework makes Japan an ideal location for international hiring.
Population 125.7 million 68.7M labor force) | Capital City Tokyo | Languages Spoken Japanese, Ainu (indigenous) |
Currency Japanese Yen (JPY, ¥) | GDP per capita $36,200 (USD) | Ease of Doing Business 29th in the world |
Minimum Wage ¥1,072.00/hour | Average Wage ¥313,161/month | Paid Leave 10 days |
The most important piece of employment legislation in Japan is the Labour Standards Act (LSA) of 1947. This is the principal statute that governs the employment relationship and such matters as wages, annual leave, working time, discrimination, maternity rights and termination of employment.
Other significant labour legislation includes:
Japanese labour law is further supported by collective agreements, ordinances and work rules.
When doing business in Japan respect for age and hierarchy is very important and bowing to seniors is seen as a sign of respect. In initial meetings, the exchange of business cards is to be expected and trust is highly valued when entering business relationships. Decisions commonly require approval from many layers within an organisation first.
Many companies in Japan recruit candidates through a process known as shinsotsu. Here, graduates from prestigious universities are sought by employers to fill specialized positions based on their character and potential rather than on their skills and experience.
Job boards and recruitment agencies are other methods commonly used to hire employees in Japan.
Workplace culture in Japan places priority on business etiquette and showing respect for customs. This will likely include behaviours such as bowing, exchanging appropriate greetings, and waiting to be seated. If business cards are exchanged they should be presented and received with both hands.
Punctuality is essential in Japan as tardiness is considered rude and may disqualify a candidate from being hired. Unlike some western countries where skills and accomplishments are confidently expressed, in Japan these should be stated more modestly. Employers in Japan tend to take a more collectivist approach when hiring, where the candidate’s suitability and benefit to the company and its culture are given greater weight than the emphasis placed on independence and individuality, as is the case in some other parts of the world.
While this question may be asked in an interview, it is unlikely as the issue of salary is a sensitive topic in Japan. It is more likely that the candidate will be asked what their desired annual salary is.
Economic conditions in Japan following the COVID-19 pandemic coupled with its inability to free itself from decades of deflation have led to little to no salary increases among job changers.
Before a new employee joins an organization, the employer must provide a variety of documents to the appropriate authorities within certain deadlines. For example, the application forms enrolling an employee into the company’s health and pension insurance must be submitted to the Japan Pension Service within five days of their start date.
To ensure the smooth integration of new employees into your organization it is good practice to prepare an induction program that equips them with the information, training and resources they need to become confident and productive members of your business.
Below are three of the best remote working tools to used by employees in Japan:
Japan observes 16 national holidays in 2023. The dates are as follows:
| Date | Holiday name |
|---|---|
| 1 Jan Sunday | New Year’s Day |
| 2 Jan Monday | Day off for New Year’s Day |
| 9 Jan Monday | Coming of Age Day |
| 11 Feb Saturday | National Foundation Day |
| 23 Feb Thursday | Emperor’s Birthday |
| 21 Mar Tuesday | Spring Equinox |
| 29 Apr Saturday | Shōwa Day |
| 3 May Wednesday | Constitution Memorial Day |
| 4 May Thursday | Greenery Day |
| 5 May Friday | Children’s Day |
| 17 Jul Monday | Sea Day |
| 11 Aug Friday | Mountain Day |
| 18 Sep Monday | Respect for the Aged Day |
| 23 Sep Saturday | Autumn Equinox |
| 9 Oct Monday | Sports Day |
| 3 Nov Friday | Culture Day |
| 23 Nov Thursday | Labor Thanksgiving Day |
A survey by Tokyo Shōkō Research reveals that the average annual salary in 2021 for over 3,000 listed companies was ¥6.05 million. This amounts to a year-on-year salary increase of ¥104,000, or 1.7%.
It is possible to hire both freelancers or full-time employees in Japan and the decision will largely depend on the needs of your business.
Traditionally, a country of lifetime employment, Japan is gradually embracing freelancing as an alternative form of employment. A freelancer may be suitable for short-term projects and can be a more affordable way to manage your staff compared to hiring full-time employees. Start-ups and other businesses that need to keep their costs down would, therefore, benefit from hiring freelancers.
However, in a country where company employment is valued, employees may be viewed as more reliable and likely to show greater commitment and loyalty to their work and to the company itself.
Yes, however, you must comply with all relevant regulations pertaining to hiring foreigners. When hiring foreign employees in Japan, you must check if they have the correct visa/status of residence to live and work in Japan. There should be no issue in hiring a foreigner if they hold one of the following types of visa:
It is common practice in Japan to hire top-level candidates at graduate level from prestigious universities. Online job posting sites and recruitment agencies are other methods through which employees can be hired.
Horizon’s PEO services offer a solution to your recruitment needs by connecting you with top talent in Japan from across every industry, helping you to expand your business operations and support your international growth.
Your business can easily hire employees in Japan without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.
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