EOR Service in Japan

Hire, Onboard and Pay Employees in Japan Quickly and Efficiently

Hiring in Japan at a glance

CURRENCY
Yen (JP¥)
working hours
40 hours per week
public/bank holidays
16 days
capital
Tokyo
language
Japanese
date format
yyyy/mm/dd
remote workers
1.2M
tax year
1 April - 31 March
minimum hourly salary
No minimum wage
CURRENCY
Yen (JP¥)
working hours
40 hours per week
public/bank holidays
16 days
capital
Tokyo
language
Japanese
date format
yyyy/mm/dd
tax year
1 April - 31 March
payroll frequency
Monthly
GDP
$4,231.14B (2022)

Employer of Record in Japan

Expanding your business in Japan, a thriving $5 trillion economy and the world's third-largest, offers significant hiring and business opportunities. The synergy between technological advancements and government cooperation has fueled Japan's growth. Despite the language barriers and fierce competition in the market, the potential for success is immense. Leveraging an Employer of Record (EOR) in Japan becomes crucial, as it provides essential local expertise, ensures compliance, and streamlines the hiring process. With an EOR, employers can navigate the complexities, establish a strong presence, and tap into the vast potential of Japan's dynamic business environment.

Why use Japan EOR?

The Japanese workforce is a valuable asset to your company. They have a reputation for politeness and a strong work ethic. However, hiring talent from this lucrative market requires carefully complying with local labor laws. 


Japan’s labor laws are vastly different from the ones in the USA, UK, etc. For example, Japanese labor laws provide strong protections for employees, making it difficult for employers to terminate their contracts without significant cause. Japan also strictly regulates the way it classifies permanent employees and independent contractors. Misclassification is a serious issue, and employers caught for employee misclassification are severely penalized.


If employers can carefully navigate these laws, they can hugely benefit from hiring highly skilled Japanese talent. Here’s where partnering with a Japan Employer of Record (EOR), like Gloroots, becomes crucial. We ensure compliance and facilitate your seamless expansion into Japan.

EOR Costs in Japan

The pricing for EOR/PEO services in Japan is contingent on various factors, including the number of employees, the extent of services required, and the project's complexity. Typically, the pricing structure involves a monthly fee per employee or a percentage of their salary. Additional charges may be applicable for customized services or specific business needs. For a tailored and transparent pricing package that aligns with your business goals in the Japanese market, we recommend consulting with our trusted EOR partner, Gloroots. Their expertise ensures a thorough understanding of your unique requirements, facilitating a cost-effective and streamlined expansion into Japan.

Key Metrics For Foreign Employers 

Japan ranks 26th globally for talent competence in INSEAD’s Global Talent Competitiveness Index 2023.

The table below depicts key indicators to consider to help employers hire from Japan.

Factors Global Ranking Interpretation
Rule of law 15 Indicates effectiveness of law enforcement
Labour-employer cooperation 5 Indicates positive labor-employee relationships
Reading Maths, and Science 4 Indicates average scores in OECD's survey of 15-year old students
University Ranking 7 Indicates average QS rankings
Labour productivity per employee 37 Indicates total output by the total labor input used to produce that output
Ease of finding skilled employees 71 Indicates findability of skilled talent
Workforce with tertiary education 8 Indicates % of workforce with PG degrees
Digital Skills 64 Indicates prevalence of advanced digital skills in the population

Source: The Global Talent Competitiveness Index 2023

Through the Gloroots’ Recrew platform, you can discover amazing talent in Japan.

Why work in Japan?

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Grow your team in Japan

Grow your team in Japan, a country with major economic hubs in Tokyo, Osaka, and Kyoto. Gloroots can facilitate your business expansion in Japan. Their local expertise ensures seamless recruitment, compliance with regulations, and successful integration into the Japanese market.

Risks of misclassification

Employee misclassification is when inaccuracies occur in categorizing employees as independent contractors. To effectively address and mitigate these risks, engaging a PEO/EOR is imperative. Partnering with Gloroots, a reliable ally, ensures a dedicated commitment to strict adherence to labor laws, precise worker classification, streamlined payroll management, and comprehensive employee benefits.

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Avoid hefty penalties with Gloroots.

Use our free employee misclassification risk calculator to estimate your risk level.

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Employing in Japan

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Tax

Tax and Social Security contribution:

Employer Payroll Contribution

Tax Rate Description
Pension 9.15% applied on salary up to 650,000 JPY per month
Health Insurance 5% – 6.57% applied on salary up to 1,390,000 JPY per month
Nursing Care Insurance 0.91% applied on salary up to 1,390,000 JPY per month
Unemployment Insurance 0.95%
Work Injury 0.25% – 8.8%
Family Allowance 0.36% applied on salary up to 650,000 JPY per month
Total Employment Cost 16.62% – 26.74%

Employee Payroll Contribution 

Tax Rate Description
Pension 9.15%
Health Insurance 5.00% on salary up to 1,390,000 JPY per month
Unemployment Insurance 0.60%
Nursing Care Insurance 0.91% on salary up to 1,390,000 JPY per month
Total Employee Cost 14.67%

Employee Income tax

Rate Income
5.00% Up to 1.95M JPY
10.00% 1.95M – 3.3M JPY
20.00% 3.3M – 6.95M JPY
23.00% 6.95M – 9M JPY
33.00% 9M – 18M JPY
40.00% 18M – 40M JPY
45.00% Over 40M JPY
10.00% Local Income Tax
20.42% Non-residents in Japan are taxed on their gross compensation without any deductions. If a non-resident is registered as a resident as of January 1st of the current year, they may also be subject to a local inhabitant's tax at a rate of 10%.

Separation

Termination 

The termination process in Japan is contingent on the terms outlined in the employment and collective agreements, taking into account factors such as the type of contract, job role, region, and grounds for termination. Given the intricacies involved, termination is typically achieved through mutual agreement, often accompanied by additional compensation, reflecting the complexity of the dismissal process in the country.

Severance Pay

In Japan, there are no legal obligations for severance payments. Due to significant restrictions on an employer's ability to terminate an employee, it's common for employees to be presented with a severance package as part of an agreement that involves a waiver and voluntary resignation.

Notice Period

In Japan, the customary notice period is typically 30 days, and if formal notice is not provided, employers can offer compensation in lieu of notice.

Probation period

The probationary period for permanent employees in Japan typically ranges from 3 to 6 months.

Start Hiring in Japan today

Expanding your global workforce comes with many compliance challenges, from employment laws to data protection and diversity requirements. At Gloroots, we streamline this process with a unified platform. Our experts handle everything from employment contracts to on-time payments and compliant benefits. This way, you can concentrate on talent acquisition while we ensure a stress-free global employment experience for both you and your employees. Connect with our experts today to kickstart your global hiring journey.

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Experience Seamless Hiring in Japan?

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