Payroll and HR in Japan

Local Information

Local Time (LIVE):3:59 PM
Local Currency:$1 = ¥109.92
Business Language(s):Japanese
Tax Year Dates:1st January – 31st December

 

Formally known as “Nippon-koku” or “Nihon-koku”, Japan has a population of over 126 million people. Known for its bustling neon cities, imperial palaces and mountainous national parks, it’s no surprise the country welcomes millions of tourists from across the globe every year.

It’s also no wonder many businesses look to expand their operations overseas to Japan. With a highly advanced infrastructure, a market of consumers with high levels of disposable income and a large economy, Japan is a win-win country to expand into. However, though the country may welcome you with open arms, expanding your business there isn’t without its challenges.

The country’s official language is Japanese, with English rarely used outside of hotels and restaurants catered to foreigners. This means you’ll likely need translation assistance during your expansion. The language barrier also presents a challenge when it comes to payroll and HR compliance. You want to make sure your processes remain compliant with the country’s laws and guidelines, which can be a challenge itself – let alone being in foreign language.

Fortunately, FMP Global are the xperts you need by your side. We have the experience you need to ensure your business remains compliant and your employees are paid on time, every time.

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Details correct at time of publication. You should not rely on these details without first seeking professional international advice.

Employer Must-Dos

In Japan, the following reports must be submitted to strict deadlines.

  • Withholding tax Report
  • Fixed Asset Tax Return
  • Consumption Tax Return
  • Corporate Tax Return

Payroll in Japan

What tax considerations are there?

Income tax is taxed at three levels in Japan dependent on income – national, prefectural and municipal. Under prefectural and municipal levels this is known as ‘resident tax’. Permanent residents in Japan are taxed on their worldwide income, whilst foreign residents employed in Japan will only be taxed on their Japanese income.

HR in Japan

What are the regular working hours in Japan?

Since 1987, Japan adopted the principle of a 40-hour week, however, Japan is well known for its long working hours. Overtime is taken consistently and workers often have second jobs on top of their primary income. If an employee works an 8 hour day they are entitled to a 1 hour break.

Vacation and illness

Employees in Japan are entitled to a minimum 10 days of paid annual leave per year after 6 months of employment. Additional days of paid vacation are added for each subsequent year of service. For example, after 2.5 years of service a worker will be entitled to 12 days holiday. Workers on part-time contracts are also entitled to paid annual leave depending on the number of days they work.

There is no sick leave right in Japan, if an employee is sick, they generally use a paid vacation day instead. However, some companies will grant sick leave as a special benefit.

Termination

There is a minimum 30-day notice period before an employer can dismiss an employee. Employees can only be let go if there is just cause based on Japan’s Civil Code and Labor Standards Law.

Want to know more about international payroll?

Download our international payroll guide for more information on international payroll and discover key considerations.

Download Our Guide

FMP’s Japanese Payroll and HR Solutions

Whether you’re looking for payroll and HR in Tokyo or Osaka, FMP Global are the experts you need to help you streamline your international payroll and HR. Our services include but are not limited to:

  • Employment Contracts
  • Payroll Processing
  • Year End Income Tax Reconciliation
  • Coordinating with the Company HR Department
  • Regulatory Compliance
  • Benefits Administration
  • Multi-currency Salary Payments and Bonuses
  • Withholding tax payments to respective authorities
  • Payroll Audit Services
  • Email Payslip Services
  • Pension Administration
  • Employee Local Tax Administration
  • Tax and Labor Consulting
  • Legal representation / Assistance
  • Handling of confidential Payroll
  • Translation Services

Maintain Compliance with Your Japanese Payroll & HR

We'll ensure your business's payroll and HR processes remain compliant in Japan. Get in touch with our experts today and see how we can take the headache out of your expansion.

Start your International Expansion Today