HR Software for Japan

Leave Policy

Maternity Leave

Pregnant employees are entitled to 14 weeks of paid vacation. 6 weeks of this must be taken before the birth of the child. During this period, the employee receives 2/3 of her salary and social security is responsible for this salary.

You can use the leave module in IceHrm to manage maternity leave in Japan.

Paternity Leave

There is currently no statutory paternity leave.

Employees can take parental leave instead.

Parental Leave

Employees are entitled to 12 months of parental leave, including maternity/paternity leave. Both parents can decide how to divide the leave, which should be 8 weeks after paternity and maternity leave. Both parents can take parental leave. During this period, Social Security pays 67% of salary for the first 180 days and then 50% for the remaining days.

Parental leave can be extended up to 2 years, with 50% of salary paid.

Sick Leave

Employees have no legal right to sick leave and it is at the sole discretion of the employer.

IceHrm employees are entitled to 3 days of paid sick leave.

Pay & Tax

Minimum Wage Requirements

In Japan, the minimum wage is very complex. The minimum hourly wage is set depending on the employee’s region and can vary between ¥714 and ¥1023.

Individual Income Tax

Individual income tax ranges from 5% to 45%. Income tax is calculated at progressive rates. Several additional factors can affect overall rates, such as: B. the household status and the number of children.

Gross Annual Income	Tax Rate (%)
Up to JPY – 1.95 million	5%
Up to JPY – 3.3 million	10%
Up to JPY – 6.95 million	20%
Up to JPY – 9 million	23%
Up to JPY – 18 million	33%
Up to JPY – 40 million	40%
Over JPY – 40 million	45%

Payroll Cost

The cost to the employer is generally estimated at 16.55% of the employee’s wages.

Health Insurance* – 4.99%
Pension Insurance* – 9.15%
Unemployment insurance – 0.95%
Long Term Care insurance* (over 40 only) – 0.80%
Workers Compensation Insurance – 0.30%
Contributions to Childcare* – 0.36%
Asbestos Contribution – 0.002%

Annual costs:
Annual Medical Check – JPY 45,000

*Health insurance, pension insurance, nursing care insurance and childcare contributions are calculated based on the amounts set by social security and the employee’s salary. Please note that Social Security also sets maximum amounts for these contributions, so the percentages may vary.

Overtime Pay & Maximum Hours

The standard working hours are 8 hours per day and 40 hours per week. The normal working week lasts from Monday to Friday.

Overtime pay is only mandatory if the employee is not an exempt manager. In this case, overtime pay cannot be offset against salary. Hours worked outside of normal working hours are considered overtime. An employee can work a maximum of 360 hours of overtime per year.

For additional hours, workers are paid at different rates based on various variables:

Classification	Rate of increase
Work beyond statutory working hours	25%
Work exceeding statutory working hours of more than 60 hours per month	50%
Work on statutory days off	35%
Work late at night (between 10 p.m. and 5 a.m.)	25%
Night work beyond statutory working hours	50%
Night work beyond statutory working hours of more than 60 hours per month	75%
Work late into the night on statutory days off	60%

Termination

Termination Requirements

Dismissals must take into account complex rules and the regulations of the country in which an employee is employed. Off-boarding is always carried out by the employer with the main participants. It may include ad hoc fees as well as required or recommended steps for specific termination cases.

Layoffs in Japan can be complex. In Japan, employers cannot terminate at will outside of the probationary period, and the termination must be for a valid reason.

Compliant terminations are:

Voluntary by the employee
By mutual agreement
Unilateral termination by the employer due to:
1. Probationary period
2. Objective reasons
3. Disciplinary dismissal
4. Performance due to unsuitability for the position
When the contract expires

Notice Period

The minimum notice period is 30 days. This does not apply to employees who are on a probationary period of 14 days or less.

Severance for Employees

There are no legal requirements for severance payments in Japan. During the notice period, the employee receives the normal salary.

Statutory Time Off

Paid Time Off

Full-time and part-time employees are entitled to 10 workdays of paid time off (PTO) per year. Every 10 days are granted after 6 months of service. In Japan, PTO is not credited monthly, but increases with the length of service of the employee. Paid annual leave left over in one year can be carried over and taken to the next year.

Public Holidays

Japan celebrates 16 national holidays

National holidays include:

The first day of the year
Coming of age day
Foundation Day
The emperor’s birthday
Vernal Equinox Day
Showa Day
Constitution Memorial Day
Greenery day
Children’s day
Marine day
Mountain day
Respect for the Aged Day
Autumnal Equinox Day
Sports day
Culture Day
Labor Thanksgiving Day

Onboarding

Onboarding takes 3 working days. The documents must be completed 1 day before the start date.

Additional Info

Employment Contract Details

Contracts must be written in Japanese and may be bilingual. They must be in writing and signed by both parties.

A contract must contain:

Surname
Start date
Duration of employment
Job descrption
Duration of the employment contract
place of work
Type of work to be done
working hours
Shift work rules (if applicable)
Exceeding the prescribed working hours or not
Break times, public holidays and vacation
Methods for determining, calculating and paying wages, deadlines and payment dates
Rules for dismissals and layoffs

Probation Period

Probation periods are not mandatory. There are no laws stipulating a minimum or maximum duration. However, the probationary period generally lasts between 3 and 6 months.

After the probationary period has ended, it can be extended for another 6 months.