As of March 2024, the estimated population of Japan is 123.2 million.
The currency in Japan is the Japanese Yen (JPY). The currency symbol is ¥.
The Labor Contracts Law of Japan states that employment contracts concluded for indefinite duration are considered permanent. Permanent employees are entitled to the same benefits and opportunities as fixed-term employees. The only key difference between permanent and fixed-term contracts is that dismissal is more difficult for permanent employees.
In Japan, written employment contracts are not mandatory. However, the Labor Contracts Act advises employers to conclude written agreements whenever possible. Employees must fully understand the conditions agreed upon. The following information must be provided to the employee in writing: Wages Working hours Period of employment Employment rules Termination rules Working conditions Renewal restrictions The process to convert the fixed-term contract to an indefinite period
In Japan, temporary employment is allowed in almost all occupations except for port transport services, construction work, security services, certain medical services, lawyers, social insurance and labor consultants, and certain labor-relations activities. Temporary contracts can be valid for a maximum of 3 years with the same employer in a particular job. Day-labor contracts cannot be concluded for less than 30 days. Temporary employees are hired through temporary staffing agencies that determine their wages. Such agencies cannot dispatch more than 80% of their employees to group companies. A dispatch fee is determined when a contract with an agency is concluded. Agencies must provide a statement on expected wages and treatment when employed, their business operations, and an overview of the worker dispatch system. The law prohibits an unreasonably different treatment (e.g., wages, allowances, benefits, education) of permanent or full-time employees and temporary employees.
The labor law of Japan does not offer provisions regarding the minimum and maximum duration of the probationary period. Most companies include a probationary period of 3 months. Employers must provide employees who work under 14 days under probation with 30 days' notice of dismissal.
In Japan, the maximum working hours are 40 hours a week and 8 hours a day. These hours may be extended to 10 hours a day under special circumstances, such as prescribed businesses in which there is substantial fluctuation in daily hours, when agreed with relevant labor unions, a disaster, and other unavoidable events. Minor employees who are 15-17 years of age are not allowed to work more than 7 hours a day (or 40 hours a week), including school hours. This is unless the working hours are reduced to 4 hours a day, which can be increased to 10 hours on any other day. Japan has introduced new guidelines for remote work. It allows working from home or any other location. The duration of working hours and other terms of work are discussed between employers and employees. Employers must introduce tools to facilitate remote work and track hours of work.
2026
2027
In Japan, employees are entitled to at least 10 consecutive or nonconsecutive days of paid annual leave, if they meet the following conditions: Have been employed for at least 6 months Have reported to work at least 80% of the total working days Persons employed for at least 1.5 years receive one additional day for each year of continuous service, up to a maximum of 20 days. Unused annual paid leave may be carried over and taken the next year only. Payment in lieu of unused leave is subject to the agreement between the employee and the employer.
Employers are not required to grant paid leave days to employees for non-work-related illness or injury. Employees may receive an accident and sickness allowance through their health insurance for up to 18 months for one diagnosis. This benefit is available through public insurance held in the employee's name. It requires the employee not to receive a wage from their employer, and there must be 3 days since the employee reported to work, with the illness or injury preventing the employee from working. The sickness allowance is two-thirds of the average salary divided into 30 parts.
Maternity leave in Japan is set at 14 weeks, including 6 weeks of prenatal and 8 weeks of postnatal leave. If the employee is enrolled in the Employees' Health Insurance Scheme, it is paid at the rate of 67% of her daily wage until 6 months when the benefit is reduced to 50%. Employers are prohibited from dismissing employees due to marriage, pregnancy, or childbirth. Dismissal of pregnant workers or employees in the first year after delivery is void unless the employer can prove just reasons for dismissal.
Paternity leave is provided and can be taken for 4 weeks (within the first 8 weeks). It is counted as parental leave and falls under child care leave taken by either parent until the child turns 1 year old. When both parents take child care leave, its duration will be extended until the child reaches the age of 1 year and 2 months. The first 180 days of parental leave are paid at 67% of the average earnings, and the remaining period at 50%. Fathers who have taken childcare leave within 8 weeks of the birth of their child can take standard childcare leave within 1 year. Beginning in April 2022, fixed-term contract employees will be entitled to parental leave. Employers must inform employees of the parental leave framework and take measures to facilitate the use of childcare leave.
Employers are required to provide at least 30 days' notice or pay in lieu of it, irrespective of the duration of the employee's service. The notice period requirement does not apply to employees on probationary period who have worked for less than 14 days.
Under Japanese labor law, severance pay is not mandatory unless issued in lieu of a valid notice of dismissal.
The National Pension system guides the national retirement scheme in Japan. National Pension covers all persons living in Japan, including foreigners. They are separated into 3 categories: Category I – persons living in Japan aged 20 to 59 Category II – persons covered by Employees' Pension Insurance or Mutual Aid Associations Category III – dependent spouses of Category II insured persons A person can receive old-age pension benefits if they reach 65 years old, have contributed to the National Pension system for at least 10 years, and meet other requirements. For individuals who have contributed for at least 40 years, the benefits are JPY 831,700 (Japanese yen) annually for the fiscal year 2025. Those who have paid extra contributions receive 200 times the number of months for which they have made additional contributions as a benefit. Employees covered under the Employees Pension Insurance scheme are entitled to benefits if they have paid premiums for at least 10 years. The amount of the benefit is calculated according to the insurance premiums paid and the length of the period over which they were paid. Employers must enroll part-time workers who make at least JPY 88,000 monthly, working at least 20 hours a week into the Employee Pension Insurance program.
In Japan, if a person insured under the National Pension System dies, the surviving spouse who takes care of the deceased's dependent children and the dependent children themselves are eligible for a survivor's pension. Eligible children must be 18 years or younger or up to 20 years of age if they have a disability. Survivors receive a pension if they fulfill eligibility criteria. If an insured foreign national or non-resident dies without receiving a pension, a surviving family member can receive a lump-sum death benefit. The insured person must have been in Category I (persons living in Japan aged 20 to 59) and paid at least 6 months of contributions. Depending on the deceased person's contributions, the surviving relative will receive between JPY 120,000 and JPY 320,000. Under the Employees Pension Insurance, an insured person who is eligible to receive an old-age pension or a person receiving a disability pension who fulfills certain conditions dies, and a survivor's pension shall be paid to that person's surviving family. If an employee dies due to a work-related illness or accident, the employer must compensate the employee's dependents. The amount must be equivalent to the average wage earned over 1,000 days.
The National Pension System of Japan provides a disability pension to insured persons, which the System covers on the date of their first medical examination for disabling injury or illness. Employees must have paid contributions for at least two-thirds of the entire period of insurance coverage until 2 months before the medical examination. The amount of the benefit depends on the category of disability. A person who suffers a work-related illness or injury and remains disabled after treatment and recovery is entitled to compensation. The employer will pay compensation for the injury based on by multiplying the average wage by the number of days prescribed by law. The average wage is calculated by dividing the total amount of wages for a period of 3 months preceding the day the injury arose by the number of days during the period. For employees covered under the Employees Pension Insurance, where the illness or injury that causes disability occurs during the period when the disabled party is insured, the regular pension or lump sum shall be paid to the disabled party. The benefit amount is calculated according to the degree of disability, the amount of insurance premiums paid, and the length of the period over which they were paid.
In Japan, the income tax year runs from January 1 through December 31. Individuals are taxed based on graduated tax rates from 5% to 45%. The Income Tax Act defines the following categories of individual taxpayers: Resident - a person who has a domicile or has had a residence continuously for 1 year. They pay tax on all income from Japan and abroad Non-permanent resident - a resident who does not have Japanese nationality and has had a domicile or a residence in Japan for not more than 5 years in total within the past 10 years; non-permanent residents pay taxes on all income except on income from abroad that does not get sent to Japan Non-resident - a person who is not a resident or is a non-permanent resident; non-residents pay taxes only on income from sources in Japan
Japan offers the following visas:
There are 4 categories of work visas in Japan: High Skilled Professional Visa - issued to highly educated foreign nationals under a point-based system. It is granted for up to 5 years, with the possibility of permanent residence. General Working Visa - issued to different categories of professionals and lasts 3 to 5 years. Working Holiday Visa - issued to citizens of 26 countries that have a mutual agreement with Japan for a Working Holiday visa for a year. Specified Skills Work Visa - newly launched visa to meet the critical labor shortage in Japan in 14 specified industrial sectors. It is issued for a period of up to 5 years. Foreign employees have to pass a Specified Skilled Evaluation Test to get this type of work visa. Effective March 9, 2026, employers who hire foreign nationals through a dispatch or Employer of Record (EOR) arrangement and submit applications under the Engineer, Specialist in Humanities, or International Services category must submit a signed pledge document to the Immigration Services Agency of Japan (ISA).
