Japan
Japan is a beautiful country filled with great remote talent and, unfortunately, complicated labor laws. If you’ve found someone in Japan you’d like to hire—but are less excited about the prospect of wading through legal jargon and thousands of dollars—you’re in the right place. Read on to learn the best way to hire someone in Japan.
Country snapshot
CURRENCY
Yen (JPY)
EMPLOYER TAXES
14.94% - 24.37%
PAYROLL FREQUENCY
Monthly
OFFICIAL LANGUAGE
Japanese
It’s the fastest way to hire globally
Hiring employees takes months, at the minimum. When you hire with Thera's locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It’s a lot cheaper
It costs just $0 to sign up for Thera, then $25 per month to hire your contractors with Thera. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
It’s more flexible for you & your team
Can be less risky than hiring employees
Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.
Some people want to be employees
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
You might not have as much control over your talent
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
Laws about hiring are complicated, and the same is true in Japan. But there are ways to sidestep the headaches—if your company hasn’t already established a physical presence in Japan, you have two real options when it comes to hiring. We’ll detail both below.
Hire talent as contractors
Hire talent as employees
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Japan than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Japan.
Employer tax
Pension
Health Insurance
Unemployment Insurance
Work Injury
Family Allowance
Paid Time Off (PTO)
Paid leave in Japan is set in the employment contract as dependent upon the years of employment. This paid leave is in addition to any public holidays.
- Employees with up to six months of service are entitled to 10 days of paid leave
- Employees with up to one and a half years’ service are entitled to 11 days of paid leave
- Employees with up to two and a half years of services are entitled to 12 days of paid leave
- Employees with up to three and a half years of services are entitled to 14 days of paid leave
- Employees with up to four and a half years of services are entitled to 16 days of paid leave
- Employees with up to five and a half years of services are entitled to 18 days of paid leave
- Employees with up to six and a half years of services are entitled to 20 days of paid leave
Public Holidays
There are 16 public holidays. While there are no legal requirements to pay for public holidays, it is common to grant those days as paid days off.
Sick Days
Sick leave is not mandatory; some companies may introduce their own sick leave policies, and employees often use their holiday to cover sick leave or claim social insurance.
Maternity Leave
All female employees are eligible for maternity benefits, consisting of 14 weeks paid leave, six weeks before the due date, and eight 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.
Paternity Leave
The father is entitled to paid paternity leave for up to one year after the birth as childcare leave. Paternity leave is referred to as ‘childcare leave’ in Japan, and new fathers employees are entitled to this benefit.
However, the employee does not receive a salary while on leave unless stated in the employment contract. They are entitled to a partial allowance from social security.
Parental Leave
Childcare leave can be taken by the mother or the father and starts from the day after the maternity leave ends. Labor insurance covers childcare leave, and an employee can take childcare leave until the child is one year old.
If both parents take childcare leave, the leave is then extended to when the child is one year and two months old.
Other Leave
Family Care Leave - unpaid leave to care for a spouse, child, parent, or grandparent for up to 3 months.
Marriage Leave
No Info.
Bereavement Leave
In Japan, an employee is entitled to bereavement leave. For the death of a father, mother, spouse, or child, an employee is entitled to 5 days of leave and three days for the death of a grandparent, grandchild, sibling, child’s spouse, or spouse’s parent.
Termination Process
The termination process varies according to the employment agreement and collective agreement in place. It is based on the type of contract, the job role, the region, and the reason for termination.
Notice Period
The notice period in Japan is usually 30 days, and if notice isn’t given, the employer can provide payment in lieu.
Severance Pay
In Japan, there is no statutory severance pay regulation.
Probation Period
Probation period for permanent employees is generally between 3 and 6 months.
Working Hours
The standard work week in São Tomé & Príncipe is 8 hours a day, or 40 hours a week.
Overtime
Japanese labor laws generally limit overtime to 45 hours a month. However, if a company goes through extraordinary circumstances and its employees agree to work more overtime, they can be granted an extra dispensation to work up to 80 hours of overtime per month.
If an employee is expected to work overtime regularly, a written agreement must be filed with the Labour Inspection Office. When an employee is requested to work overtime or work on holidays, the maximums are 5 hours per day, 45 hours per month, and 365 hours per year.
Overtime payment is calculated as an additional payment to the hourly base salary as follows:
- Overtime (typically over 8 hours a day): additional 25.00%
- Night-time (22:00 – 05:00): additional 25.00%
- Weekends and Holidays: an additional 35.00%
- Night-time (continuing from overtime): additional 50.00%
- Holiday (continuing from night-time): additional 60.00%
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