Japan
Employer of Record & PEO in Japan
Hire & manage teams remotely in Japan without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.
Native Language
Japan
Employee Protection
Strong
Payroll Frequency
Monthly
Capital city
Tokyo
Termination
Hard
Internet
Fast
Currency
Japanese Yuan (JPY)
Immigration
Hard
English Speaking
<10%
Population
125.44 Million
Employment Cost
Low
Cost of Living
High
How NNRoad Employment & PEO Services Work?
NNRoad provides professional employment organization (PEO) & employer of record (EOR) services for companies looking to hire and manage teams in Japan. Registering a legal entity in Japan as a means for employment is an outdated practice that takes both time (months) and money (thousands of USD). NNRoad’s employer of record and PEO services enables companies to hire and manage employees in Japan in full accordance with local labor laws in under a week.
Employer of Record in Japan
Employer of Record (EOR) services are for companies who do not have a legal entity in Japan, but who want to hire in Japan. Employment and full liability are outsourced to NNRoad.
➊ You interviews & select the candidates you want to hire in Japan.
➋ NNRoad arranges a local labor contract with your new employee.
➌ NNRoad arranges a service contract between your organization & NNRoad.
➍ NNRoad organizes, manages & processes payroll in Japan in full compliance with local employment laws.
➎ You maintain a normal working relationship and manage your team in Japan while NNRoad manages payroll & HR liabilities.
- Recruiting process outsourcing – including but not limited to resume screening, shortlisting candidates, coordination for interviews, and assistance for salary negotiation
- Hiring of and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire, confidentiality agreement)
- On-boarding and off-boarding employees following local law practice
- Complete payroll solution and statutory benefit administration
- Employee management – employee handbook, employee record retaining, time keeping, bonus and allowance management, expense and claims, and leave employee database management accordingly to the local law
- Mandatory social insurance (health insurance & nursing care insurance, and pension) and labor insurance (employment insurance and workman’s accident compensation insurance) compliance according to the local laws
- Advisory of Social and Labor Insurance Acts updates and compensation & benefit structure
- Working VISA application assistance, if needed
- Local individual income tax reporting, if needed
Payroll & PEO in Japan
Professional Employment Organization (PEO) services are for companies who have a legal entity in Japan, and want to outsource their payroll. Employment liabilities are shared between your organization and NNRoad.
➊ You interviews & select the candidates you want to hire in Japan.
➋ NNRoad organizes, manages and processes payroll for your local employees in full compliance with local employment laws.
➌ You maintain a normal working relationship and manage your team in Japan while NNRoad manages payroll & HR compliance.
- Registering the necessary company and personnel information for payroll calculation in the payroll software and system (raw data collection, employee data maintenance, local government bureau registration, set up payroll policy, maintain employee record
- Monthly payroll processing
- Year-end adjustment and annual declaration
Advantages of NNRoad's Japan Employment Services
- With EOR/PEO solutions you can manage client meetings, sales, quality control, marketing, R&D and customer support without a local company in Japan.
- Pay as you go
- Dedicated account manager – One point of contact for multiple locations
- Employment & termination processing
- Complete payroll solution and statutory benefit according to local laws
- With EOR/PEO solutions you can hire staff while waiting for the registration of your company in Japan.
- NNRoad only works with professional locally licensed partners
- GDPR compliant
- NNRoad manages employee record timekeeping, bonus and allowance, expenses claims and personal leaves according to local law.
- NNRoad provides foreigner VISA application services, if needed
Employment Compliance in Japan
Taxes & Payroll in Japan
Employee Income Taxes:
Individual income tax rates in Japan are based on progressive tax brackets.
Tax Brackets
5%: 0 – 1,950,000 JPY
10%: 1,950,000 – 3,300,000 JPY
20%: 3,300,000 – 6,950,000 JPY
23%: 6,950,000 – 9,000,000 JPY
33%: 9,000,000 – 18,000,000 JPY
40%: 18,000,000 – 40,000,000 JPY
45%: >40,000,000 JPY
Sample Calculation
Yearly income = 10,000,000 JPY
33% * 1,000,000 = 330,000
23% * 2,050,000 = 471,500
20% * 3,650,000 = 730,000
10% * 1,350,000 = 135,000
5% * 1,950,000 = 97,500
330,000+471,500+730,000+135,000 = 1,666,500
Yearly income tax = 166,500 JPY
Employer Costs in Japan
Employer Contributions:
Employer costs vary in Japan, but the maximum employer contribution ranges between 14% & 15.5% of the employee’s salary.
Employee Contributions:
Employee costs vary in Japan, but the maximum employee contribution ranges between 15% & 17% of the employee’s salary.
Working Hours in Japan
Working Hours per Week
The work week in Japan is 40 hours per week and 8 hours per day. Although specific industries vary & overtime laws are nuanced.
Benefits & Insurance in Japan
Social security is a mandatory benefit in Japan for employees. It is common for employers to offer health insurance, pension as well as transportation benefits and contributions to attract potential employees.
Termination Laws in Japan
Notice
It is mandatory for employers inn Japan to provide a 30 days notice prior to termination.
Severance
Severance is oftentimes negotiated in Japan. Japanese law does not mandate severance packages.
Public Holidays in Japan
Public Holidays in Japan
- Japanese New Year
- Coming of Age Day
- National Foundation Day
- The Emperor’s Birthday
- Vernal Equinox Day
- Shōwa Day
- Golden Week
- Constitution Memorial Day
- Greenery Day
- Children’s Day
- Marine Day
- Health and Sports Day
- Mountain Day
- Respect for the Aged Day
- Autumnal Equinox Day
- Culture Day
- Labor Thanksgiving Day
Paid Leave in Japan
Employees working at a firm for 6 months with an attendance record of 80% or more are entitled to a minimum of 10 days of paid annual leave.
Paid annual leave increases by 1 day per year for the first 2 years of employment and by 2 days per year after the first two years, capped at 20 days per year. Employees are entitled to carryover unused annual leave for 1 year.
Employment Contract in Japan
Employment Contract
Employment in Japan requires a labor contract written in Japanese and spelling out the salary and benefits of the job.
Probation Period
Probation is common in Japan and last from three months to one year. Terminating an employee on probation in Japan must be accompanied by legitimate reasons such as performance or company financials.
Types of Leaves in Japan
Sick Leave:
There are no mandatory sick leave entitlements in Japan, but employers may have a sick leave policy.
Maternity Leave:
Female employees are entitled to 14 weeks (6 weeks before and 8 weeks after birth) maternity leave at 2/3rds of normal salary. Covered by Social Security.
Paternity Leave:
New fathers in Japan take up to 4 weeks of paternity leave after the birth.
Unpaid Leave:
Parents in Japan may take unpaid childcare leave, family care leave, and in the case of death of a direct family member.
Immigration Laws in Japan
Japanese laws regarding foreign workers in Japan are strict and structured based on how skilled the foreign worker is and which industry the foreign worker belongs to. More details regarding different types of foreign worker visas can be found at the Ministry of Foreign Affairs of Japan
