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 Registering a legal entity in Japan as a means for employment is an outdated practice that takes both time (months) and money (thousands of USD).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

  1. With EOR/PEO solutions you can manage client meetings, sales, quality control, marketing, R&D and customer support without a local company in Japan.
  2. Pay as you go
  3. ​​Dedicated account manager – One point of contact for multiple locations
  4. Employment & termination processing
  5. Complete payroll solution and statutory benefit according to local laws
  6. With EOR/PEO solutions you can hire staff while waiting for the registration of your company in Japan.
  7. NNRoad only works with professional locally licensed partners
  8. GDPR compliant
  9. NNRoad manages employee record timekeeping, bonus and allowance, expenses claims and personal leaves according to local law.
  10. 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

Resources

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