Payroll Information

Japanese law requires employers to provide employees with a written explanation of their wages and deductions, as well as any bonuses or other benefits. Employers are also required to keep accurate records of their employees' working hours and other employment-related information.

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Payroll Cycle

The standard payroll cycle in Japan is monthly. Employees are typically paid on the 25th of the month for the previous month's work. However, some companies may have different payroll cycles, such as biweekly or bimonthly.

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Employment Law

In Japan, employment law is governed by the Labor Standards Act (LSA) and other related laws and regulations. The LSA sets minimum standards for working conditions, including maximum working hours, minimum wages, and requirements for overtime pay, paid leave, and other benefits. Employers in Japan are also required to contribute to social insurance programs on behalf of their employees, including health insurance, pension insurance, and employment insurance.

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Employment Contract

In Japan, an employment contract is typically required for all employees. The contract should include information such as the employee's job duties, salary, working hours, and other terms and conditions of employment. The contract should also specify the duration of the employment, which can be either a fixed-term contract or an indefinite-term contract. Fixed-term contracts are common in Japan and are often renewed multiple times, but employers are required to provide certain protections for employees on fixed-term contracts.

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Probation Period / Trial Period

In Japan, it is common for employers to have a probation period for new employees, typically ranging from 3 to 6 months. During this time, either the employee or the employer can terminate the employment without notice or compensation. However, there are certain restrictions on the use of probation periods, and employers must provide a valid reason for termination.

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Working Hours

The standard working hours in Japan are 8 hours per day and 40 hours per week. However, some industries may have different standards, and employers can set their own working hours as long as they comply with the maximums set by law. Overtime work is also common in Japan, and employees are entitled to receive overtime pay for work performed beyond their regular hours.

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Overtime

Employees in Japan are entitled to overtime pay for work performed beyond their regular hours. The overtime rate is typically 125% of the regular hourly rate for the first 8 hours of overtime and 150% for any additional hours. Employers are required to keep accurate records of their employees' working hours and overtime hours.

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Bonus

Bonuses are a common form of compensation in Japan, especially in the form of end-of-year bonuses. The amount of the bonus is typically based on the employee's performance and the company's financial performance. Employers are not required by law to provide bonuses, but they are considered a standard practice in many industries.

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Termination

Termination of employment in Japan is subject to certain legal requirements. Employers must have a valid reason for termination and must provide notice and/or compensation to the employee. The amount of notice or compensation required depends on the length of the employee's service and the reason for termination.

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Notice Period

The notice period required for termination depends on the length of the employee's service. For employees with less than one year of service, the notice period is 2 weeks. For employees with more than 1 year of service, the notice period is 1 month. However, employers can also provide compensation in lieu of notice.

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Redundancy / Severance Pay

In the event of redundancy, employers in Japan are required to follow a specific process, including providing notice to the affected employees and consulting with the labor union or other employee representatives. Employers are also required to provide compensation to the affected employees, which is typically based on the length of their service.

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Maternity Leaves

Female employees in Japan are entitled to maternity leave, which is typically 6 weeks before the expected due date and 8 weeks after the birth of the child. During this time, employees are entitled to receive a maternity allowance, which is typically 67% of their regular wages. The cost of the maternity allowance is shared between the employer and the government. All female employees are eligible for maternity benefits, consisting of 14 weeks paid leave, 6 weeks before the due date, and 8 weeks after.

The maternity payment is made by the Social Insurance based on the National Health Insurance rates, which are currently 420,000 JPY per child.  However, suppose the employee is enrolled in the employees’ Health Insurance. In that case, they may receive a Maternity Allowance of 2/3rds of the regular salary rate from 42 days before birth until 56 days after delivery.

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Paternity Leaves

Male employees in Japan are entitled to paternity leave, which is typically up to a total of 14 days. During this time, employees are entitled to receive a paternity allowance, which is typically 67% of their regular wages. The cost of the paternity allowance is shared between the employer and the government.

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Parental Leaves

In addition to maternity and paternity leave, Japan also has a parental leave system. Employees are entitled to take up to one year of parental leave to care for a child under the age of 1. During this time, employees are entitled to receive a parental allowance, which is typically 50% of their regular wages. The cost of the parental allowance is shared between the employer and the government.

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Vacation and Annual Leaves

Employees in Japan are entitled to paid annual leave, which typically ranges from 10 to 20 days per year depending on the length of their service. However, employers may require employees to take their annual leave at specific times, such as during the company's annual shutdown.

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Sick Leaves

Employees in Japan are entitled to sick leave, which typically ranges from five to 10 days per year depending on the length of their service. Employers are required to provide sick leave to employees who are unable to work due to illness or injury.

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Other Leaves

Japan also has several other types of leave, including bereavement leave, nursing care leave, and family care leave. Bereavement leave is typically up to 3 days for the death of an immediate family member. Nursing care leave is available to employees who need to care for a family member who is ill or disabled. Family care leave is available to employees who need to care for a child or family member due to a sudden illness or injury.

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Holidays

Japan has several national holidays, including New Year's Day, Coming of Age Day, National Foundation Day, Vernal Equinox Day, Showa Day, Constitution Memorial Day, Greenery Day, Children's Day, Marine Day, Mountain Day, Respect for the Aged Day, Autumnal Equinox Day, Health and Sports Day, Culture Day, and Labor Thanksgiving Day. However, employers are not required to provide paid time off for national holidays.

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Taxation

Personal Income Tax

In Japan, personal income tax is levied on a progressive scale, with tax rates ranging from 5% to 45%. The tax rates are based on the taxpayer's income level, with higher income earners paying a higher tax rate. The tax rates are as follows:

• Up to JPY 1.95 million: 5%
• JPY 1.95 million to JPY 3.3 million: 10%
• JPY 3.3 million to JPY 6.95 million: 20%
• JPY 6.95 million to JPY 9 million: 23%
• JPY 9 million to JPY 18 million: 33%
• JPY 18 million to JPY 40 million: 40%
• Over JPY 40 million: 45%

In addition to the national income tax, local taxes may also apply, such as prefecture and municipal income taxes.

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Social Security

Social security in Japan includes several components, including health insurance, pension, and unemployment insurance. Both employers and employees are required to contribute to these programs.

• Health Insurance: Employers are required to provide health insurance for their employees, which typically covers around 70% of medical expenses. Employees are responsible for paying the remaining 30%.
• Pension: Japan has a national pension system, which provides retirement benefits to eligible individuals. Both employers and employees are required to contribute to the system.
• Unemployment Insurance: Employers are required to provide unemployment insurance for their employees, which provides financial assistance to employees who lose their job due to reasons beyond their control.

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Visas and Foreign Worker

General Information

Types of Work Visas

There are several types of work visas available in Japan, depending on the nature of the work and the qualifications of the applicant. The most common types of work visas include:

1. Highly Skilled Professional Visa: This visa is intended for individuals with advanced degrees or extensive experience in certain fields, such as science, engineering, or business. The visa allows for a longer period of stay in Japan and offers preferential treatment for immigration procedures.
2. Engineer/Specialist in Humanities/International Services Visa: This visa is intended for individuals who have specific skills or knowledge in fields such as engineering, social sciences, or international business.
3. Intra-Company Transferee Visa: This visa is intended for individuals who are transferring from a foreign branch of a company to a Japanese branch of the same company.
4. Technical Intern Training Visa: This visa is intended for individuals who are participating in a technical intern training program in Japan.

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Application Process

To apply for a work visa in Japan, the applicant must have a job offer from a Japanese employer. The employer must first apply for a Certificate of Eligibility (COE) from the Immigration Bureau of Japan, which confirms that the applicant meets the requirements for the work visa. Once the COE is approved, the applicant can then apply for the work visa at a Japanese embassy or consulate in their home country.

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Requirements

The requirements for a work visa in Japan vary depending on the type of visa. In general, the applicant must have a job offer from a Japanese employer and meet certain qualifications, such as a degree or relevant work experience. The applicant must also have a valid passport, a completed visa application form, and a Certificate of Eligibility (COE).

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Duration of Stay

The duration of stay for a work visa in Japan varies depending on the type of visa and the specific circumstances of the applicant. In general, work visas are granted for a period of one to 5 years, with the possibility of extension.

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Restrictions

Work visas in Japan are subject to certain restrictions, such as limitations on the type of work that can be performed and the employer that can be worked for. In addition, work visas may be revoked if the applicant violates Japanese immigration laws or engages in criminal activity.

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