Hiring in Japan

A foreign company can hire in Japan through its own entity, an employer of record where the actual arrangement is lawful, or a contractor agreement for genuinely independent services. The minimum wage depends on the work prefecture and the rate's effective date. 4dev.com is a global contractor platform working with contractors in Japan.

Three ways to hire in Japan

For ongoing employment, your own Japan entity is the direct route. Before using an employer of record, establish who will direct the worker. Use a contractor agreement only for genuinely independent services.

Route	Legal employer	What you pay on top of salary	How you end it
Your own entity	Your Japan entity	15.4% for the specified employer contribution components. Long-term care for insured people aged 40–64 and industry-rated workers' compensation are additional conditional costs.	Ordinary dismissal requires 30 days' notice, payment in lieu, or a combination. Notice does not make a dismissal valid without objectively reasonable grounds and social acceptability.
Employer of record	The employing provider identified in the actual arrangement	The provider's quote and the employment costs it allocates; there is no universal provider fee.	The employing provider handles the employment end, but the arrangement must be tested for actual work direction and any worker-dispatch consequences.
Contractor	No employer where the engagement is genuinely independent; the client contracts for services	The agreed service price and any contract-specific costs.	Apply the service contract's ending terms. A services label does not decide status: direction, time and place constraints, substitutability, business character and exclusivity are among the actual-arrangement factors.

The employer of record label alone does not establish the legal structure. If one company employs a worker and another directs the work, the arrangement meets the statutory definition of worker dispatch. The operator then needs the required licence, and establishment-level or organisational-unit limits can generally reach three years unless an extension or exception applies. Whether those rules apply depends on the proposed arrangement.

A secondment to an existing Japanese group entity calls for a separate review of the functional employer, how salary is funded and paid, and the applicable visa category. The question of who directs and supervises the work belongs to that group-entity analysis; it does not establish the legality of a third-party employer of record arrangement.

The Japan labour market: where pay differs

The national scheduled-pay average gives a starting point for a Japan salary budget. The prefecture, industry and role can change what a particular hire costs.

Salary reference points

General workers, Japan	¥340,600 scheduled monthly pay in 2025	MHLW wage trend
Tokyo prefecture	¥418,300 scheduled monthly pay in 2025	MHLW prefectures
Information and communications industry	¥406,000 scheduled monthly pay in 2025	MHLW industries

These are survey averages, not statutory wage floors or role-specific offers. The national ¥340,600 / month result measures June 2025 scheduled cash earnings for general workers before deductions; it excludes bonuses and overtime. Tokyo is the highest prefectural average in the survey, while the information-and-communications figure covers all occupations and genders in that industry, so it is not a software-engineer salary.

The national survey also reports ¥373,400 for men and ¥285,900 for women in scheduled monthly pay; these figures show a survey split without explaining its causes. A bonus or 13th-month payment is not a universal statutory entitlement, although a clear commitment in work rules can make it payable.

Registering as an employer, step by step

Insurance coverage and opening a salary-paying office trigger different filing deadlines. Their dates do not establish how long incorporation, a first hire or first payroll will take.

Step	What happens	Takes
Social insurance establishment	File the new establishment application once the employer becomes subject to health and pension insurance.	Within 5 days after the triggering event
Labour-insurance relationship	File the relationship-establishment notice when coverage begins.	Within 10 days of the start of coverage
Employment insurance establishment	File the establishment notice when the labour-insurance relationship arises.	Within 10 days from the following day
Employment-insurance insured person	File the acquisition notice for the worker when the worker becomes insured.	By the 10th day of the following month
Salary-paying office	Notify the tax office after opening an office that handles salary payments.	Within 1 month of opening
Total	Each deadline runs from its own trigger; the rows are not a statutory sequence.	Unknown: separate statutory deadlines do not establish a total incorporation or first-payroll duration.

For health and pension insurance, use the Japan Pension Service new-establishment procedure and the MHLW employment-insurance procedure list for employment-insurance establishment and insured-person filings. The National Tax Agency's opening-notice guidance covers the salary-paying office notice.

Hiring and onboarding a worker

Before a worker starts, document the employment conditions and check that the role fits the person's status of residence. Set up the required insurance coverage, time records and conduct processes for the role.

Legal limits

No statutory limit applies to probation duration in Japan. The dismissal-notice exemption for a probationary worker lasts only through the first 14 days; ordinary notice rules apply after that.

At the formation of an employment contract, the employer must disclose working conditions, with specified items delivered in writing. The MHLW provides a working-conditions notice template; electronic delivery has qualifications, so the rule does not mean that paper is always required.

Even though a written agreement is not required, employers are required to provide a written notice of employment conditions

— Yoshikazu Abe, Partner, and Tetsu Yuasa, Senior Associate, Mori Hamada

For qualifying professional activity, Engineer/Specialist in Humanities/International Services is a work-authorizing status of residence. The employer should match the planned role to the worker's permitted activity rather than treating that status as a general permission to work in any role.

Since 1 October 2026, employers must also take measures to prevent customer harassment and sexual harassment of job applicants.

Onboarding checklist

• Give the worker the agreed employment conditions and the required working-conditions notice, including the items that must be delivered in writing.
• Check that the planned activity fits the worker's work-authorizing status of residence.
• Identify which insurance coverage applies and complete the separate filings described in Registering as an employer; their deadlines run from different triggers.
• Set up working-time records and a process for the current harassment-prevention duties before the worker starts.

Which minimum wage applies in Japan?

Japan has no single nationwide minimum wage. Use the statutory rate for the worker's prefecture on the date the work is done.

On 15 October 2026, the applicable prefectural range is ¥1,023–¥1,280 / hour. The MHLW FY2026 prefectural rate list shows why the range changes during the year: each prefecture has its own rate and effective date.

Tokyo	¥1,280 / hour from 1 October 2026	MHLW FY2026 prefectural rates
Osaka	¥1,231 / hour from 1 October 2026	MHLW FY2026 prefectural rates
Miyazaki	¥1,023 / hour until 24 October 2026; ¥1,085 / hour from that date	MHLW FY2026 prefectural rates
Okinawa prefecture	¥1,023 / hour until 2 December 2026; ¥1,086 / hour from that date	MHLW FY2026 prefectural rates

The FY2026 weighted average of prefectural rates is ¥1,177 per hour, up from ¥1,121 in FY2025. It is a statistic, not the legal floor for every workplace; the prefectural rate and effective date still govern.

Across FY2017–FY2024, the weighted average rose from ¥848 to ¥1,055. It then rose from ¥1,121 in FY2025 to ¥1,177 in FY2026. The figures describe a national statistic; the work-prefecture rate determines the legal floor.

Taxes and contributions on a Japan salary

National income tax and employer insurance charges enter a salary budget differently. The employer charges depend on the insurance plan, worker age, industry and assigned remuneration band.

Japan's national income-tax schedule is progressive from 5–45% of taxable income: the first band runs from ¥1,000 to ¥1,949,000 and the highest rate applies from ¥40,000,000. In 2026, special reconstruction income tax adds 2.1% of the national income tax, rather than to taxable income. From January 2027, the 2.1% combined surtax remains, split between a new 1% special defence income tax and 1.1% reconstruction tax. These national rates are not an employee's total tax or take-home calculation.

The 15.4% employer baseline is the sum of five specified employer rates: 9.15% employees' pension insurance, 4.925% Tokyo Association health insurance, 0.115% child and childcare support premium, 0.36% employer-only child and childcare contribution, and 0.85% general-business employment insurance. The employee separately bears the other half of the shared pension, health and support premiums, plus a 0.5% general-business employment-insurance rate; those employee shares are not employer additions. The baseline also excludes the 0.81% employer long-term-care share for insured workers aged 40–64 and employer-borne workers' accident compensation, which varies by industry. The cost examples use the 0.3% miscellaneous-business accident rate.

The ¥88,000 monthly wage test for short-time workers' employee health and pension insurance ended on 1 October 2026, while other worker and employer eligibility conditions continue. From October 2027, the employer-size threshold is scheduled to extend to workplaces with 36–50 covered employees; that future change still applies only where the other eligibility conditions are met.

What an employee actually costs you

These examples apply FY2026 employer contribution rules to three 2025 scheduled-pay observations. Each uses the Tokyo Association plan, a worker aged 40–64, general-business employment insurance and the 0.3% miscellaneous-business workers' accident compensation rate.

Gross scheduled salary	Employer additions	Monthly employer total	Effective additions
¥340,600	¥56,140.90	¥396,740.90	16.48%
¥406,000	¥67,645	¥473,645	16.66%
¥418,300	¥67,786.45	¥486,086.45	16.21%

The ¥340,600 scenario uses a ¥340,000 standard monthly remuneration band; the ¥406,000 and ¥418,300 scenarios use a ¥410,000 band. Those bands determine the health, pension, childcare support, employer-only childcare and applicable long-term-care amounts. Employment insurance and the miscellaneous-business accident-compensation illustration use gross scheduled salary instead.

The Tokyo Association premium table applies the age-40–64 care assumption in these examples. An assigned standard monthly remuneration can differ from one month's cash salary because assessable remuneration includes commuting allowances and in-kind pay, and the regular September determination uses April–June remuneration. The examples exclude bonus, benefits and provider fees; they are employer budgets, not net pay or a universal percentage.

When an employer deducts the employee's half premium from salary, fractions of 50 sen or less are rounded down and larger fractions are rounded up, unless an employer–worker agreement specifies another method. The table calculates employer cost, not an individual worker's payroll deductions.

Working time and overtime in Japan

For employees, the normal statutory limit is eight hours a day and 40 hours a week, with overtime requiring a filed Article 36 agreement before the work is performed.

Where work exceeds six hours, the employee must receive at least 45 minutes' break; where it exceeds eight hours, the break rises to one hour. The employer must also provide at least one day off each week, or four days off across four weeks.

An employer must conclude a labour-management Article 36 agreement and file it with the Labour Standards Inspection Office before requiring overtime or statutory-holiday work. The ordinary ceiling is 45 overtime hours in a month and 360 in a year. Even where a special agreement applies, overtime remains capped at 720 hours in a year, below 100 hours in one month including holiday work, and at an 80-hour multi-month average including holiday work.

The statutory minimum premiums differ by type of work:

• 25% for overtime;
• 35% for legal-holiday work;
• 25% for night work; and
• 50% for monthly overtime beyond 60 hours.

Breaching the overtime ceilings can lead to up to six months' imprisonment or a ¥300,000 fine. These are employee working-time rules; a service-contract label does not decide status, so an independent-services arrangement must be assessed from the actual work arrangement rather than treated as employment by default.

Leave, sick pay and parental leave

Annual paid leave grows with service and requires the qualifying attendance record. National holidays, sick leave and parental benefits follow separate rules.

Annual paid leave	10–20 days: 10 days after six months' continuous service and at least 80% attendance, rising with service to 20 days after 6.5 years for a full-time worker	MHLW working hours and holidays
Required use	Employers must ensure that workers entitled to at least 10 annual-leave days take five days each year	MHLW annual paid leave
National holidays	16 national holidays named in the 2026 calendar, alongside substitute and bridge holidays	Cabinet Office holiday calendar

National holidays do not automatically become employer-mandated days off under the Labour Standards Act. Confirm the working calendar and any additional holiday terms in the employment conditions rather than assuming that the statutory holiday list sets the employee's days off.

Japan has no general statutory paid sick-leave allowance. An employer may establish special sick leave as a policy, while Association health insurance can provide a sickness allowance for a cumulative one year and six months at two-thirds of standard remuneration per day when its conditions are met. The insurance benefit and an employer's leave policy are separate questions.

Eligible insured workers taking childcare leave generally receive 67% of base daily wage through day 180 and 50% from day 181. Where both parents meet the 14-day leave test after birth, an additional 13% can apply for up to 28 days, producing a combined 80% rate; neither figure applies without the stated eligibility conditions.

Two 2025 changes affect leave administration. From 1 April 2025, child nursing leave extends through completion of primary-school grade 3 and covers specified school closures plus entry and graduation occasions. From 1 October 2025, an employer with a worker raising a child aged three to school entry must offer at least two listed flexible-work measures, from which the worker may select one; this obligation does not create an unconditional cash benefit.

Termination: notice and payments

An employer needs both a valid substantive reason and the correct notice or notice allowance: 30 days' notice alone does not make a dismissal valid.

For an ordinary dismissal, the employer must ordinarily give at least 30 days' notice. If it gives less notice, it must pay at least 30 days of average wages as a dismissal notice allowance; a partial notice period can be combined with payment. Dismissal without objectively reasonable grounds and social acceptability is invalid under the Labour Contracts Act, so the notice process does not cure an invalid decision.

For fixed-term employment, a worker renewed at least three times or continuously employed for more than one year must generally receive 30 days' notice of nonrenewal. The probation exception to dismissal notice ends after the first 14 days, even if the agreed probation continues longer.

A retirement allowance is separate from dismissal notice allowance. Japan does not require a general retirement allowance, but an employer that sets one in its work rules must follow those rules. Do not infer an automatic severance formula or fixed damages amount from the notice rules.

Recent changes in Japan, 2025–2027

Leave, premium, coverage and wage rules have different effective dates in 2025 and 2026. The list also identifies scheduled changes through 2027.

• 1 April 2025: Child nursing leave extended through completion of primary-school grade 3 and added specified school closures plus entry and graduation occasions.
• 1 October 2025: For a worker raising a child aged three to school entry, the employer must offer at least two listed flexible-work measures; the worker may select one of those offered.
• March 2026 premiums, paid in April: Tokyo Association health insurance became 9.85%, and long-term care insurance became 1.62% in total. The employer half of the care premium is 0.81% for insured workers aged 40–64.
• April 2026 premiums, paid in May: The child and childcare support premium began at 0.23%, split 0.115% each between employer and employee. The employer-only child and childcare contribution remained 0.36%; FY2026 general-business employment insurance is 0.85% employer and 0.5% employee.
• 1 October 2026: Tokyo's minimum wage became ¥1,280 an hour and Osaka's became ¥1,231. The ¥88,000 monthly wage test for short-time workers' health and pension coverage was abolished, while other eligibility conditions continued. Employers also took on customer-harassment and applicant sexual-harassment prevention duties. If the arrangement qualifies as worker dispatch, the dispatch employer must tell the worker that they may request an explanation of treatment differences and reasons.
• 24 October 2026: Miyazaki's minimum wage is scheduled to move from ¥1,023 to ¥1,085 an hour.
• 1 December 2026: Changes to the basic income-tax deduction, the minimum employment-income deduction and dependent-income tests generally take effect for 2026 income. December year-end adjustment and later withholding work change; withholding through November does not.
• 2 December 2026: Okinawa's minimum wage is scheduled to move from ¥1,023 to ¥1,086 an hour.
• January 2027: The combined 2.1% income-tax surtax continues, with 1% special defence income tax and 1.1% reconstruction tax replacing the former 2.1% reconstruction-tax composition.
• October 2027: The short-time worker social-insurance employer-size threshold is scheduled to extend to workplaces with 36–50 covered employees, subject to the remaining eligibility conditions.

What a hiring mistake costs and who pays

A wage shortfall must be paid in addition to any minimum-wage fine. The other penalties below attach to specific overtime or dispatch breaches; an invalid dismissal has no fixed compensation amount under the cited rule.

Party	Risk	Amount
Entity employing the worker	Paying below the applicable prefectural minimum wage	The shortfall is payable, and the fine can be up to ¥500,000.
Entity employing the worker	Breaching the overtime ceilings	Up to six months' imprisonment or a ¥300,000 fine.
Actual worker-dispatch business operator	Operating dispatch without the required permission	Up to one year's imprisonment or a ¥1 million fine.
Employer dismissing an employee	Dismissal without objectively reasonable grounds and social acceptability	The dismissal can be invalid; no fixed monetary amount follows from this rule.

Who employs the worker and who directs the work matters before the dispatch row applies. Where one company employs the worker and another directs that worker, the arrangement meets the statutory definition of worker dispatch, and the business carrying it out needs permission. That does not mean every employer of record arrangement is dispatch or that a client automatically carries the operator's penalty; use the Japan employer of record guide to check licence and duration diligence for the actual structure.

Confirm the prefectural wage before payroll, and conclude and file the Article 36 agreement before requiring overtime. When using a provider, establish who directs the work and which party bears the relevant obligations; any indemnity depends on the contract.

Frequently asked questions

Is there one minimum wage for all of Japan?

Japan has no single national minimum wage. The applicable statutory rate depends on the prefecture where the employee works and its effective date: on 15 October 2026, the range was ¥1,023–¥1,280 an hour, with Tokyo at ¥1,280 from 1 October and Okinawa at ¥1,023 until its ¥1,086 rate was scheduled to begin on 2 December.

What is the average monthly salary in Japan?

The 2025 Basic Survey on Wage Structure reports ¥340,600 in average scheduled monthly pay for general workers. It is a June 2025 survey measure before deductions and excludes bonuses and overtime, so use it as a budget reference rather than a statutory floor or a role-specific offer.

How much does a ¥340,600 salary cost an employer?

In the stated Tokyo Association-plan example, a ¥340,600 scheduled monthly salary produces a monthly employer total of ¥396,740.90, including ¥56,140.90 in employer additions. That illustration assumes a worker aged 40–64, general-business employment insurance and 0.3% workers' accident compensation for miscellaneous businesses; a different industry, plan, age or remuneration band can change the result.

Can a foreign company hire in Japan without a local entity?

It can use an employer of record where the actual arrangement is lawful, or buy genuinely independent services where the engagement remains independent. If one company employs the worker while another directs the work, the arrangement meets the statutory definition of worker dispatch and the operator needs a licence; a services label also does not decide worker status, which turns on the actual arrangement.

Does Japan have a 40-hour work week?

The normal statutory limit is eight hours a day and 40 hours a week for employees. Work beyond it requires the applicable Article 36 labour-management agreement to be concluded and filed before overtime or statutory-holiday work, and employees also receive the applicable break and weekly-rest protections.

Do employees get national holidays as paid days off?

Japan's 2026 calendar names 16 national holidays, with substitute and bridge holidays also listed. A national holiday is not automatically an employer-mandated day off under the Labour Standards Act, so the employment conditions and working calendar determine whether the employee is off.

Can a foreigner work in Japan?

Work must fit the person's status of residence and the permitted activity. Engineer/Specialist in Humanities/International Services is a work-authorizing status for qualifying professional activity, so an employer should match the planned role to that status rather than treating it as permission for any role.

Is a written employment contract required?

At the formation of an employment contract, the employer must disclose working conditions, with specified items delivered in writing. A written agreement itself is not always required, and electronic delivery of the conditions has qualifications; ensure the delivery method meets those conditions.

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