Yen (JPY)
Cost of Living
(US 69.92)
Time (UTC)
UTC +9
Parliamentary Constitutional Monarchy

Hire in Japan without an entity and fully compliant with local labor laws

Japan is a stable, highly developed nation with the world's second-largest economy after the United States. The national literacy rate is 99%, and the average IQ is 105. 

The Japanese islands' total land area is roughly 142,000 square miles, approximately 94% of California's total area.

Get to know Japan

The East Sea separates Japan's four major islands, Hokkaido, Honshu, Shikoku, and Kyushu, from the Asian continent.

Japanese life is characterized by complexity and contrast, mixing a long and rich cultural history with robust economic and technological growth since the 1950s. As a result, the country is one of the world's top nations for manufacturing, trading, and financial development.

The World Bank classifies Japan as a highly developed free-market economy with the following trade agreements and alliances: 

Trade Agreements:

  • APEC - Asia-Pacific Economic Cooperation
  • RCEP - Regional, comprehensive economic partnership
  • TPP - Trans-Pacific Partnership


  • ADB - Asian Development Bank
  • G20 - Group of Twenty
  • G8 - Group of Eight
  • OECD
  • UN - United Nations
  • WTO - World Trade Organization

“Must know” if you’re hiring in Japan without an employer of record

Entity requirements
Mandatory hiring contracts & clauses
Different compliance risks for full-time vs. contractor employees
Mandatory probationary periods
Allowable working hours & overtime wage laws
Timecard and attendance records
Required employer payroll, labor insurance, and tax payments
Discrimination protection
Notices & termination regulations

Budgeting for Japanese employees

Hiring remote Japanese professionals is smart and economical, assuming you’re fully compliant with local tax, labor, and wage laws.
Employee Classification–Full-time vs Contractor

Permanent Employee

  • Fixed salaries
  • Promotion opportunities
  • Insurance coverage (social, employment, etc.)
  • Transportation reimbursements
  • Bonuses
  • Maternity and paternity leave

Contract Employee

  • Entitled to overtime pay from their employers 
  • Free to work for other businesses
  • Have the option of enrolling in the National Social Security System
  • Qualified for paid time off after six months of employment


  • Prevalent among housewives and students
  • Having the freedom to pick the timetables that best suit their needs
  • Can have multiple jobs simultaneously


  • A job for a trainee or student, occasionally without compensation
  • Offered to gain work experience or complete certification requirements

The Labor Contracts Act of Japan forbids unjustifiable workplace discrimination between regular and non-regular employees.

Employment Contracts

Employees must get a written notice upon hiring that includes fundamental employment terms such as:

  • The employment period
  • Terms of renewal 
  • Workplace
  • Duties
  • Working hours 
  • Days off
  • Holidays 
  • Salaries
  • Termination of employment
Probation Period
  • Minimum of 3 - 6 months
  • Maximum of 1 year
  • An evaluation period to determine whether the individual is a good fit for the position
Standard Working Hours & Overtime
  • 8 hours a day
  • 40 hours a week
  • 45 hours a month
Payroll Frequency


Wages & Bonuses
  • Minimum monthly wage = $1045.346 USD
  • Minimum hourly wage = $6.32 USD
  • Summer Bonus paid in June or July
  • Winter Bonus paid in December

USD equivalent median salaries

  • Data Scientist = $56,783 USD
  • Electrical Engineer = $28,689 USD
  • Hardware Engineer = $58,048 USD
  • IT Manager = $65,602 USD
  • Mobile Developer = $50,835 USD
  • Product Manager = $60,384 USD
  • Project Manager  = $26,413 USD
  • QA Engineer = $49,206 USD
  • Software Engineer = $45,466 USD
  • System Administrator = $74,373 USD
  • UX Designer = $40,825 USD
  • Web Developer = $58,751 USD
Payroll Taxes & Employer Contributions
  • 9.15% Pension
  • 4.92% - 6.49% Health Insurance
  • 0.30% Unemployment Insurance
  • 0.25% - 8.8% Work Injury
  • Retirement
  • Several types of disability pension
  • Workers’ compensation and unemployment insurance
  • Healthcare
  • Long-term care
  • Paid leaves
  • Contribution to the longevity healthcare system

Health Insurance 

  • Anyone who spends more than three months living continuously in Japan must have insurance
  • Plans are chosen based on the enrollee's employment situation, age, and place of residence
  • According to Article 25 of the Constitution, the government must advance and enhance social welfare, social security, and public health conditions to ensure equal access to quality of healthcare and culture

Paid leave

  • Attendance rate of 80% or more = 10 to 20 days paid leave


  • Maximum of 14 weeks



  • Maximum of one year

Vacation/PTO days

  • 6 months = 10 days 
  • 1.5 years = 11 days 
  • 2.5 years = 12 days
  • 3.5 years = 14 days
  • 4.5 years = 16 days 
  • 5.5 years = 18 days 
  • 6.5 years = 20 days

Sick Days

  • Not mandatory

Bereavement Leave

  • Death of immediate family = five days 
  • Death of non-immediate family = three days 
  • When a worker is the one responsible for making funeral arrangements = additional two days

Family care leave

  • Maximum three months of unpaid time off to care for immediate family


Japan celebrates 16 national (public) holidays and multiple observances a year. Some have fixed dates set on the Gregorian calendar, and others are based on the Lunar calendar and thus observed on different dates each year. 


The New Year holiday is the most important in Japan, with many distinctive rituals and events. The following working day becomes a public holiday if a national holiday falls on a Sunday.

Termination & Severance

30 days must pass after receiving notice of termination before dismissal.

Employees who are in the following categories may be fired by the employer without notice or paid in place of notice:

  • Employed every day, but not for more than one month in a row
  • Employed for a fixed time of no more than two months and have not worked more than two months in a row
  • Hired seasonally for a definite term of no more than four months and have not worked continuously for a period longer than that
  • Haven't worked continuously for more than 14 days and are in a probationary period

A few fun facts about Japan

  • Women would paint their teeth black during the early modern era of Japan, a practice known as "ohaguro"
  • Over 40% of all Magna published comics and graphic novels are sold in Japan
  • Japanese nobility are forbidden to eat fugu, a delicacy made from a toxic blowfish
  • The bow is a fundamental greeting in Japan that people take great care to master; deeper bows convey a higher level of deference.

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