Hire full time talent anywhere
Hire contractors abroad
Pay your teams globally
Insurance for your employees
Employee relocation assistance
Global Recruitment Service
Hire fulltime talent anywhere through our EOR/PEO
Hire contractors abroad
Hire employees from $299
Outsource your international payroll
Employee relocation assistance
Source talent with our recruitment experts
Hire in +180 countries
Hire in 180+ countries in 24 hours
Streamline global hiring & payments
Simplify global operations
Hit your hiring targets faster
Save time on admin and payroll
Hire abroad without legal admin
Shape your strategy with key insights
A behind-the-scenes look at the best EOR
Learn about the Horizons platform
Contact our support team
Learn our story
Inspiring case studies with real customers
Become a Horizons partner
Discover our international offices
Accelerate your career with Horizons
SALARY PAYMENT IN Japanese Yen (JPY, ¥)
CONTRACT LANGUAGES Japanese / English
PAYROLL TAX 14.98% – 24.43%
PAYROLL CYCLE Monthly
TIME TO HIRE 24 hours
Get Started
Hire and pay talents
with Horizons in
180+ countries
Horizons ensures day-to-day guidance to help your business navigate Japan’s labor laws and regulations. We also provide mandatory monthly payroll requirements, and absorb all local employment liabilities. Partnering with our Japan PEO is the quickest and most cost-effective way to enter the Japan market.
PEO Platform Hire in Japan, and pay employees through our platform or app. | PEO Cost Our Japan PEO solution is the most affordable on the market. | Time-to-hire Fast onboarding in Japan, hire in as little as 24 hours. |
Contracts We draft labor contracts compliant with Japanese labor law. | Local Benefits We administer all mandatory benefits and contributions in Japan. | 180+ Countries It doesn’t stop with Japan — we are an international PEO |
Whilst Japanese laws do not specify an exact format for employment contracts, employers should draft written contracts for all work arrangements. Contracts should provide employees with the terms and conditions relevant to their job role. Employers can fulfill these requirements by giving employees a written employment contract and/or a copy of the company’s ‘work rules’ (shuugyou kisoku).
All employees engaged through Horizons’ Japan PEO are onboarded with a locally compliant employment contract.
In Japan, it is best practice for employers to draft a written employment contract that clearly states employment terms. This should include the employee’s compensation, benefits, responsibilities, and rules around termination. Any letter of offer or employment contract should state the compensation and benefits in Japanese Yen, rather than a foreign currency.
Probationary period | 3 – 6 months (standard) |
Termination notice period | 0 – 14 days of employment: none 14+ days of employment: 30 days Must be justified by a reason in the employment agreement. |
Severance | Only in cases where employee is dismissed without reason: 2 months’ salary per year of service, up to maximum 12 months |
Probationary period | 3 – 6 months (standard) Recommended: Using a fixed-term contract as a probationary period ‘Shokai Yotei Haken‘ |
Termination notice period | 0 – 14 days of employment: none 14+ days of employment: 30 days Must be justified by a reason in the employment agreement. |
Severance | Only in cases where employee is dismissed without reason: 2 months’ salary per year of service, up to maximum 12 months |
In Japan, a standard work week runs from Monday to Friday. Each day is generally eight hours, for a total weekly limit of 40 hours. For a full-time employee, these would be normal hours, unless otherwise agreed with a union or local employee representative. Work agreements must clearly set out the maximum hours of applicable overtime.
Minimum overtime rates are as follows:
Small and medium sized companies are exempt from the final two overtime rates above. Additionally, employees that hold positions of management or supervision are typically exempt from such overtime rates.
Note that, in addition to these pay requirements for overtime, there are strict limits on the amount of overtime allowed. As of 2019 (larger employers), and 2020 (small businesses), the ‘basic limit rule’ is 45 overtime hours per month, or 360 hours per year.
There is also an ‘extended limit rule’ which provides that in special circumstances (such as unexpected orders), the basic limit rule can be breached. However, in that case there is still a limit of 100 hours per month, with a maximum if 720 hours per year.
Quick, compliant hiring in 24 hours—no subsidiary required.
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 |
In Japan, there is the National Universal Health Care System. Through this system, employees generally receive four standard types of insurance:
Both health and welfare pension insurance are classified as social insurance. As such, directors are also entitled to these benefits. Insurance premiums are jointly contributed by employers and employees.
In Japan, female employees are entitled to maternity leave within six weeks of the expected birth date, and eight weeks after childbirth. Female employees are not allowed to recommence work within eight weeks of childbirth – unless they meet the following criteria:
Unless an employment contract states otherwise, it is not mandatory for employers to pay maternity leave to their employees.
Employees in Japan are eligible for family care leave – of up to 93 days per family member. Unless stipulated in a contract or work rules, family care leave is not paid.
Employees are also eligible to receive childcare leave, during the period in which maternity leave ends and the day before a child turns one. In some circumstances, this period can be extended, up until the day a child becomes one and a half year’s old.
Childcare leave benefits:
1) JPY 420,000 of lump-sum benefit for childbirth
2) Exemption of social insurance premium
3) Maternity allowance: Approximately 2-3 month’s salary during maternity leave
4) Childcare leave benefit: Approximately 2-3 month’s salary during childcare leave
Termination laws in Japan offer a significant degree of legal protection for employees. It is extremely difficult for employers to terminate an employee working in Japan. As such, there are restrictions surrounding what is considered as a ‘justified termination’. Dismissals can even be deemed as an abuse of an employee’s rights under the country’s local laws.
Throughout the previous decades, it has been challenging for employers to successfully prove a valid legal cause for termination. The exceptions to this rule include: employees committing crimes or violations such as theft, violence, excessive insubordination, dishonesty regarding their professional credentials, or long-term poor performance in their work role.
The tradition in Japanese business culture is to place poor performing employees on a 3-6 month probationary period. If the employee continues to underperform or not meet the expectations of the company, they can then be terminated, without it being deemed unacceptable under Japan law.
Employers are legally required to provide employees with at least 30 day’s notice of termination. This stipulation is commonly included in the ‘work rules’ that are provide to the employee at the time of hire.
Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. Horizons’ Japan PEO can mitigate risk for foreign companies and provide guidance through this process.
Minimum Wage Country Comparison Chart | (Per month in USD) |
Switzerland (Geneva) | $4,000 |
Italy | $2,255 |
Australia | $1996 |
Algeria | $156 |
Uzbekistan | $22 |
Because wages in Japan can start quite low, employers often rely on additional benefits to entice prospective employees. Guaranteed benefits in Japan include paid annual leave of 10 days – after six month’s company service. Employees receive a leave increase of one day per year, for the following two years. This continues for each subsequent year, until they reach the maximum of 20 day’s paid annual leave.
Employees have access to excellent health care coverage under Japan’s social security system. As a result, many employers do not provide supplemental health benefits.
Employment law in Japan requires employers to offer annual physicals to all employees. This can be extended to ‘stress checkups’, if related to the nature of work. Employers are advised to budget between 10% and 15% – on top of an employee’s salary – to be allocated towards benefits.
For employers that conduct benefit management themselves, it’s important they understand both Japan’s guaranteed benefits and what is accepted as the ‘norm’. Employers should start by researching what other businesses provide for their employees. Based on this research, employers can then decide what works best for their business. However, it should be acknowledged that this process often involves a great deal of time and travel to Japan.
Alternatively, employers can elect to work with a benefits outsourcing company. By partnering with a company that has experience in Japanese benefit management, this can make the process much more straightforward. A global PEO like Horizons’ Japan PEO will make sure that employees receive their correct entitlements and that your business maintains employment compliance.
Because Japan’s compensation laws vary by city, it is vital that employers keep up-to-date on regulations in their area. Additionally, employers must comply with Japanese tax laws – so as not to face fines and penalties.
There are also strict maternity leave restrictions in Japan. Female employees are entitled to maternity leave within six weeks of their expected birth date and then another eight weeks post childbirth. A woman is prohibited from returning to work within eight weeks of childbirth, unless the following criteria are met:
The female employee wants to resume her work at least six weeks after giving birth
The female employee has doctor’s certification that resuming work will not cause medical problems
Rather than struggling to handle Japan benefit management on your own, it pays to work with Horizons. We make sure that all employees receive sufficient benefits and that your business remains compliant with Japanese employment laws.
With Horizons, you get quick service, transparent pricing, and expert support.
A Japan PEO and a Japan EOR are two types of companies which specialize in providing human resources services to businesses in Japan.
The main difference between a Japan PEO and a Japan EOR is in the scope of their services.
Japan PEOs provide a full range of HR services, including payroll, benefits administration, and employee recruiting—all under one roof as a co-employer. Engaging a Japan PEO is essentially outsourcing your HR duties in Japan.
Japan EORs actually take over as the legal employer of your employees based abroad. Japan EORs become responsible for labor compliance for your employees in Japan.
At Horizons, we offer both PEO and EOR services in Japan. Get in touch now and let us know what service you are seeking.
A PEO in Japan can feasibly hire both local and foreign nationals to work in Japan.
However, the ability of Horizons to sponsor your foreign national employee in Japan may be limited due to visa quotas practiced in many countries.
Contact us with your requirements and our Global Mobility team with review the case and get back to you within 2 business days.
In most cases, Horizons’ Japan PEO can hire & onboard your employee within 24 hours. The actual start date of the employee will depend on their notice period obligation to their previous employer as well as any relevant hiring rules in Japan.
It is possible to get a work visa in Japan. Horizons’ Global Mobility team is a dedicated team of work visa experts. They assess the details of each case to determine feasibility and costs before Horizons applies for the work visa on behalf of your employee. If the Global Mobility team determines that your case is feasible, the process is smooth and transparent. Visa spots in Japan are limited, however—get started today to secure your employees’ visa spot.