The services related to payroll in Japan include managing all of the aspects related to the compensation of a company’s employees. They are calculating the wages, according to the salary scale, delivering the payment to the employees, calculating bonuses and any other due amounts to the company’s staff.
Our payroll Japan experts assist companies needing professional services in this area. Many businesses choose to work with a third-party when handling payroll and this is because this choice allows them to access professional-grade services at the same or lower costs compared to having an internal payroll and human resources department. For small and medium companies, handling payroll internally may not even be possible, this is why outsourcing is a convenient solution.
Our team of company formation experts in Japan assists investors who wish to open a company and those who need specialized services once their business has started its activities.
Our payroll services are tailored according to the size of the business and its number of employees. We can help you with:
Quick Facts | |
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Dedicated payroll tax in Japan (YES/NO) | NO |
Our payroll services | – calculating wages, – calculating social security contributions, – maintaining payroll records, – processing bonuses & premiums, etc. |
Social security contributions | 16.62% – 26.74% paid by employer, approximately 15% paid by employee |
Contributions paid by employer | – pension, – health insurance, – unemployment insurance, – work injury insurance, – nursing care insurance & family allowance (in certain cases) |
Contributions paid by employee | – pension, – health insurance, – unemployment insurance, – nursing care insurance (in certain cases) |
Personal income tax | Progressive, based on earned income. Might be different for employees without Japanese residency. |
Overtime compensation | 25% – 60% of the employee’s regular pay rate |
Payroll cycle in Japan | Generally monthly |
Severance pay | No statutory requirements for severance pay |
Employees bonuses | – 13th salary, – summer/winter bonus, etc. |
Annual paid time off | 10-20 days (depending on employment duration) |
Sick leaves | No statutory sick leave requirements, depends on the employer. |
Standard working hours in Japan | 40 hours/week |
Personalized payroll services (YES/NO) | YES |
Assistance | We can help with payroll if you just opened a company in Japan or if managing an existing one. |
Our payroll Japan experts can also give you information on whether or not certain tax incentives can apply in your case.
When investors open a company in Japan, they will need to consider their human capital, an important resource that will have a significant impact on the evolution of their business. This means now only looking for suitable candidates for the open job positions, it also means properly managing all employee-related matters.
In Japan, the Labor Standards Bureau is the one tasked with supervising companies in terms of lawful working conditions. The Bureau is part of the Ministry of Health, Labor and Welfare.
We list the following:
You can reach out to us for more information about our payroll service packages.
There are various employment rules and regulations in Japan that employers must adhere to. These rules are outlined in the Labor Standards Act (LSA). Our payroll specialists in Japan are fully compliant with these regulations, ensuring accurate and lawful compensation for your employees. These regulations apply to both individuals with residency in Japan and to legal foreign workers.
Some of the key employment rules in Japan include:
If you plan to open a company in Japan and hire employees, our payroll services simplify the complexities of managing employee compensation.
Employees’ paid-time-off is essential for payroll management because it impacts how an employee’s compensation is determined and administered. Our payroll specialists in Japan are aware of these factors and ensure accurate and compliant payroll processing. It is important to know these aspects even if you just started the procedure of company registration in Japan.
The standard amount of paid leave that employees in Japan are entitled to is based on their years of service. When employees take paid leave, they are typically paid their regular salary for those days. Our payroll services in Japan accurately reflect the paid leave taken by employees and ensure they receive the correct compensation.
While there may be no legal requirement to pay employees extra for public holidays, many employers choose to provide additional compensation or paid time off on these days.
Sick leave is also not mandatory in Japan, but some companies have their sick leave policies. Our payroll services in Japan track and account for sick leave days and ensure that employees are paid appropriately during periods.
We can help you with payroll services, as well as with company formation in Japan.
The payroll Japan tax system is based on the fact that the employer withholds the national and local social security contributions at source. The following tax rates are relevant:
The total percentage of the total annual wage payable by the employer in Japan amounts between 16.62% – 26.74%, but this percentage might vary. The employees also pay their part of the contribution. For work injuries, employers must pay between 0.25 and 8.88% to their employees.
You can reach out to our accountant in Japan for complete information about the tax requirements, tax filing dates, applicable exemptions and incentives.
When you choose to work with our agents specializing in payroll in Japan you have access to a team of dedicated professionals.
If you are thinking of opening a company in Japan and are interested in payroll services, here are some statistics regarding employment in Japan:
Contact our Japan company formation agents to find out more about our payroll solutions, as well as other services.
We also assist branches in Japan.