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Phone, internet, and coworking costs can be reimbursed tax‑free when supported by proper documentation. A tax invoice or receipt must be provided showing the date and amount paid.
Employment in Japan
Minimum wage
JPY 2,121,504
Employer costs
19.45–20.25%
Employee contribution
14.74–15.54%
Employee tax
15–55%
In Japan, the indicative annual minimum wage is 2121504 JPY. Employers typically face overall social security costs in the range of 19.45–20.25% on top of gross salary, covering items such as health, pension, unemployment, nursing, family allowance, and workers’ compensation. Employees usually contribute around 14.74–15.54% in social security, subject to an annual cap on contributions. Income tax is progressive, with headline rates ranging from 15–55%, and is generally withheld at source.
Onboarding time
We can help you get a new employee started in Japan fast. The minimum onboarding time we need is only 48 hours. Our team ensures fast, compliant employee onboarding and payroll processing. The onboarding timeline starts once the employee submits all required information via the NEO platform.
Payroll
In Japan, both employers and employees contribute to social security through several components. Employer costs typically include family allowance, health insurance (subject to an annual cap), nursing insurance, pension insurance, unemployment insurance, and workers’ compensation, while employees contribute to social security up to an annual cap on contributions.
Indicative payroll contribution ranges
| Party | Headline range |
|---|---|
| Employer | 19.45–20.25% |
| Employee | 14.74–15.54% |
Minimum wages
Indicative annual minimum wage
2121504 JPY
Working hours
Standard full‑time working hours in Japan are typically structured over a five‑day workweek. The data below reflects a common pattern for employees engaged through an employer of record.
Standard working time
| Work pattern | Details |
|---|---|
| Weekly hours | 40 |
| Working days | Monday to Friday |
Leave
The provided data does not specify concrete entitlements for paid time off or sick leave in Japan. Employers should set leave policies that comply with Japanese labor law and reflect any contractual agreements with employees.
Public holidays
Japan observes a wide range of national public holidays throughout the year. These dates should be factored into workforce planning, scheduling, and payroll for employees based in Japan.
Public holidays in 2026
| Date | Holiday |
|---|---|
| 2026-01-01 | New Year's Day |
| 2026-01-12 | Coming of Age Day |
| 2026-02-11 | Foundation Day |
| 2026-02-23 | Emperor's Birthday |
| 2026-03-20 | Vernal Equinox Day |
| 2026-04-29 | Showa Day |
| 2026-05-04 | Greenery Day |
| 2026-05-05 | Children's Day |
| 2026-05-06 | Constitution Day |
| 2026-07-20 | Marine Day |
| 2026-08-11 | Mountain Day |
| 2026-09-21 | Respect for the Aged Day |
| 2026-09-22 | National Holiday |
| 2026-09-23 | Autumnal Equinox Day |
| 2026-10-12 | Sports Day |
| 2026-11-03 | Culture Day |
| 2026-11-23 | Labor Thanksgiving Day |
Expenses
Japan applies strict documentation rules to business expenses, and items submitted without the required proof are treated as taxable. Bank statements and payment confirmations are generally not accepted as evidence, except for certain credit card and bank fees where receipts are not normally issued.
Employees must submit current‑year expenses within 60 days of the expense date or within 30 days after returning from a business trip, whichever is later. Prior‑year expenses are not accepted after February 1 of the following year.
Submission deadlines
| Expense type | Action and deadline |
|---|---|
| Current year expenses | Submit within 60 days of expense or 30 days after return from travel |
| Prior year expenses | Submit by February 1 of the following year |
Communication and workspace
- Phone subscription
- Internet subscription
- Coworking
Equipment and supplies
Laptops, office equipment and supplies, software subscriptions, and postal charges are non‑taxable when backed by a tax invoice or receipt showing the date and amount. For credit card and bank fees, a tax invoice or receipt is preferred, but bank or credit card statements are also acceptable where receipts are not typically issued, such as for annual or monthly card fees, account maintenance charges, foreign transaction or currency conversion fees, wire or bank transfer fees, and ATM withdrawal fees.
- Laptop
- Office equipment
- Office supplies
- Software subscription
- Postal charges
- Credit card and bank fees
Travel
Most travel‑related expenses are non‑taxable when supported by appropriate documentation showing the date and amount. Train and public transport costs do not require documentation, while mileage without receipts is treated as a taxable allowance rather than a non‑taxable expense.
| Expense | Taxation / documentation highlights | |
|---|---|---|
| Business travel insurance | Non taxable; tax invoice or receipt with date and amount | |
| Visa fee | Non taxable; tax invoice or receipt with date and amount | |
| Accommodation | Non taxable; tax invoice or receipt, or hotel booking confirmation with payment summary and all required details | |
| Flight (including luggage) | Non taxable; tax invoice or receipt, or flight booking confirmation with payment summary and all required details | |
| Taxi or rideshare | Non taxable; tax invoice or receipt with date and amount | |
| Train | Non taxable; documentation not required | |
| Public transport | Non taxable; documentation not required | |
| Car rental | Non taxable; tax invoice or receipt with date and amount | |
| Fuel | Non taxable; tax invoice or receipt with date, amount, and description of purchase or service | |
| Mileage | Taxable; reimbursed as an allowance without documentation | |
| Parking or toll fees | Non taxable; tax invoice or receipt, parking ticket, or toll usage statement with date and amount |
Meals and entertainment
Everyday meals, groceries, and business meals with clients or partners can be reimbursed on a non‑taxable basis. A tax invoice or receipt is required, showing at least the date and amount.
- Breakfast, lunch and dinner
- Groceries
- Meal with client or partner
Other expenses
Training, courses, books, promotional items, and gifts to clients or employees are non‑taxable when they are business‑related and supported by a tax invoice or receipt showing the date and amount.
- Training, courses, and books
- Promotional items
- Gift to client or employee
Per diem
Japan does not have a statutory per diem system, but employers may offer non‑taxable per diems if the daily rate and rules are clearly defined in the company’s expense policy. There is no legal cap or specific documentation requirement, but once the policy’s rate and submission are approved by the client, the per diem claim is treated as final.
Allowances
In Japan, allowances are optional benefits that employers may choose to offer on a one‑off or recurring basis. All listed allowances are treated as taxable income, and clients can request a gross‑up so that the employee receives a specified net amount while the employer covers the related taxes and social security contributions.
These allowances are discretionary and may be offered to one or more employees at the employer’s choice. They are processed manually and do not require supporting documentation for reimbursement.
- Work From Home Allowance
- Mileage
- Gym Membership
- Medical Insurance
- Life Insurance
- Wellness
- Medical Cost
- Utilities (Electricity, Water, etc.)
Termination
Japanese employment relationships are subject to minimum notice and may include a probationary period. The figures below reflect the standard minimums in the provided data and do not replace legal advice for complex terminations.
Notice and probation
| Policy | Key parameters |
|---|---|
| Notice period | At least 30 days’ notice, including during probation |
| Probation period | From 0 up to a maximum of 360 days, depending on contract terms |
