Hire in Japan

Typical time to hire

2-4 weeks for contractor, 4-8 weeks for full-time (new graduate hiring follows annual April cycle)

Entity requirement

KK (kabushiki kaisha / joint-stock company) or GK (godo kaisha). Registration at Legal Affairs Bureau.

EOR available

Yes — from $399/employee/month through a Corpshore entity

Contractor of record

Yes — from $39/worker/month

Standard workweek

40 hours (8 hours/day, 5 days/week)

Maximum weekly hours

40 hours

Minimum annual leave

10 days (first year, after 6 months), increasing to 20 days over 6.5 years. Employers must ensure at least 5 days are taken annually.

Public holidays

16 per year

Maternity leave

14 weeks (6 before + 8 after), paid through health insurance at 2/3 salary

Paternity leave

Up to 1 year childcare leave (ikuji kyugyo), paid at 67% for first 180 days then 50%. New 'postnatal papa leave' of 4 weeks since 2022.

Notice period

30 days (employer). Employee: 2 weeks (Civil Code). Note: Japanese law makes dismissal extremely difficult.

Severance

No statutory requirement, but retirement allowance (taishokukin) is near-universal in practice. Typical: 1-3 months per year of service.

Probation

3-6 months typical (contractual). Employment rights still apply during probation; dismissal must meet the high bar of 'just cause'.

Overtime rules

25% premium (regular overtime), 35% (late night 10pm-5am), 50% (overtime exceeding 60 hours/month for large employers). 36 Agreement (Article 36 of Labour Standards Act) required for any overtime.

Income tax range

5% to 45% (national) + 10% residential tax

Corporate tax

~30% effective (23.2% national + prefectural/municipal enterprise taxes)

Social contributions

Roughly 15% each (employer/employee). Covers health insurance, pension (kosei nenkin), unemployment, workers' comp, long-term care.

VAT / GST

10% (standard); 8% reduced (food, non-alcoholic beverages, newspaper subscriptions)

Tax year

Calendar year (Jan-Dec)

Treaty network

Over 75 tax treaties

Worker classification

Distinction between employees (rodosha) and independent contractors (gyomu itaku). Labour Standards Act applies only to employees. Misclassification risk is high given Japan's strict dismissal rules.

Data protection

Act on the Protection of Personal Information (APPI, revised 2022). Personal Information Protection Commission (PPC) enforces. Requires consent for cross-border transfers.

Right to work

Status of residence (visa) required. Highly Skilled Professional visa offers fast-track permanent residence. Specified Skilled Worker visas (2019) opened blue-collar sectors.

Non-compete

Enforceable if reasonable. Courts apply a multi-factor test: necessity, scope, duration, geographic limitation, and whether compensatory measures exist.

Collective bargaining

Protected under the Trade Union Act. Shunto (spring wage offensive) is the annual wage negotiation cycle. Enterprise unions (company-specific) dominate rather than industry-wide unions.

Zengin system handles domestic interbank transfers (processed same-day for morning submissions). Monthly payroll on the 25th is the most common cycle. Cash-based culture is shifting but still significant.

• Lifetime employment (shushin koyo) tradition is weakening but still influences expectations: dismissal is nearly impossible without 'just cause'
• New graduate hiring (shin-sotsu) follows a rigid annual cycle: companies recruit university students 1-2 years before graduation for April start dates
• Japan faces acute labour shortages due to demographics (shrinking working-age population): 2024 expanded sectors eligible for foreign workers
• Remote work adoption accelerated during COVID but remains lower than in Western countries; many companies still expect office presence