🇯🇵 Hire in Japan: cost, rules and best EOR options
High-skill, high-trust workforce and a major economy. English is limited outside international firms, but the talent in engineering, finance and manufacturing is deep. Employer social insurance is moderate, though dismissal protections are strong.
- Employer on-costs: 15.3–16.2% of gross salary (on a $60,000 salary, about $69,180–$69,720 total)
- EOR onboarding: not verified; own entity: not verified
- Probation: Customarily 3-6 months, set by contract; during the first 14 days dismissal needs no 30-day notice (general knowledge).
- Currency: Japanese yen (JPY)
- Data confidence: medium, verified 2026-10-05
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What it costs to employ someone in Japan
Employer on-costs run roughly 15.3–16.2% on top of gross salary. Derived from secondary sources, using Tokyo Kyokai Kenpo rates for FY2026: welfare pension 9.15%, health insurance ~4.925%, child and childcare support 0.115%, employment insurance 0.85%, workers' accident ~0.3% (office jobs) = ~15.3%. High adds nursing-care insurance 0.81% for employees aged 40-64 = ~16.1%. Employee-side rates match PwC (pension 9.15%, health 4.925%). Excludes the employer-only child-rearing contribution (~0.36%, not verified), commuting allowance (taxable/social-insured) and paid leave. Health and pension contributions are capped by standard-remuneration grades.
| Contribution | Rate | Notes |
|---|---|---|
| Welfare Pension (Kosei Nenkin) | 9.15% | Equal employer and employee share of 18.3%; standard monthly remuneration cap applies. |
| Health insurance (Kenko Hoken) | ~4.925% (Tokyo Kyokai Kenpo, FY2026) | Varies by prefecture and insurer. |
| Child and childcare support contribution | 0.115% (April 2026) | Shared 50/50 per secondary source. |
| Employment insurance (Koyo Hoken) | ~0.85% (general industry FY2026) | One source says 0.95%; employee 0.5% per PwC. |
| Workers' accident insurance (Rosai) | ~0.3% (office roles; varies by industry) | Employer-only. |
| Nursing care insurance (Kaigo Hoken) | ~0.81% (employees aged 40-64) | Employer share. |
Employer withholds the employee's social insurance (about 14.69% per PwC: pension 9.15%, health 4.925%, child support 0.115%, unemployment 0.5%), national income tax and resident (local) tax, and remits monthly.
Mandatory benefits
- Social insurance enrolment (health and pension) for eligible workers
- Employment and workers' accident insurance
- Annual paid leave: 10 days after 6 months rising to 20
- Maternity leave (6 weeks pre / 8 post) and childcare leave
- Commuting allowance is customary but not statutory
Employment rules at a glance
| Payroll | Monthly (full payment, in currency, at least once a month on a fixed date); bonuses commonly paid twice a year (customary). |
|---|---|
| Probation | Customarily 3-6 months, set by contract; during the first 14 days dismissal needs no 30-day notice (general knowledge). |
| Notice & severance | Employer must give 30 days' notice or pay in lieu of notice (averaged wages); no statutory severance, but many employers pay by company rule or collective agreement. |
| Working time | Standard 8 hours per day and 40 hours per week; overtime premium 25% (50% above 60 hours a month), night work +25%, rest-day work +35%. Overtime caps: 45 hours per month and 360 hours a year as a baseline. |
| Paid leave | 10 days after 6 months of service, increasing annually to 20 days after 6.5 years (Labor Standards Act; general knowledge) plus 16 national holidays. |
| Minimum wage | Prefectural minimums; national weighted average JPY 1,121 per hour (FY2025). The Central Minimum Wages Council recommended +JPY 55 to JPY 1,176 average from October 2026 (Tokyo ~JPY 1,280 vs JPY 1,226 now); prefectural effective dates stagger, and the final decisions should be confirmed with MHLW. |
Termination
Dismissal needs objectively reasonable grounds and must be socially acceptable (Labor Contract Act art. 16), making it hard to dismiss; abuse of rights claims are common. Fixed-term contracts convert to indefinite after 5 years on request.
Employee or contractor in Japan?
Independent contractors (gyomu itaku) are common, but Japanese courts and labour inspectors apply employee-likeness tests. The Freelance Act (2024) regulates payment to freelancers. Moderate risk.
Compare contractor vs employee cost →
Hiring through an EOR in Japan
A foreign company can employ via a Japanese KK (kabushiki kaisha) or GK subsidiary, a branch, or an EOR (haken/payrolling). Work visas require a sponsoring entity. Timelines not verified.
Typical onboarding: EOR not verified; own entity not verified. JST, UTC+9 all year with no DST; 13-14 hours ahead of US Eastern.
Providers worth shortlisting
| Provider | Best for | EOR pricing | Coverage | |
|---|---|---|---|---|
| Deel | Companies that want one platform for contractors, EOR and a US PEO, with transparent per-seat list prices. | $599 per EOR employee per month (public list price, checked 2026-10-05) | 150+ countries (vendor claim, per Deel's own and third-party descriptions) | Visit Deel |
| Remote | Teams that want a published price for each product (EOR, global payroll, contractors, contractor of record, US PEO) and an affiliate program with 12-month revenue share. | $699 per employee/month (public list price, checked 2026-10-05) | 90+ countries for EOR (vendor pricing page claim) | Visit Remote |
| Rippling | Companies already running (or willing to adopt) a unified HR, IT and finance platform who want global hiring as an add-on module. | — | Visit Rippling | |
| Oyster | Distributed teams that want published EOR and contractor prices and a long-running affiliate program with tiered revenue share. | $699 per employee/month (public list price, checked 2026-10-05); annual discounts available; refundable deposit required | 120+ countries EOR; contractors in 180+ countries (vendor claim) | Visit Oyster |
| Papaya Global | Mid-size and larger companies that need multi-country payroll orchestration and workforce payments, and will go through a sales process. | 160+ countries (vendor claim as repeated on FlexOffers listing and third-party pages) | Visit Papaya Global | |
| Multiplier | Cost-conscious teams that want EOR priced below $500 per employee with an annual discount. | Third-party summary of Multiplier's pricing: EOR from $459/employee/month on annual contracts and $499 on monthly contracts (not confirmed; multiplier pricing page returned 403 to our fetch) | — | Visit Multiplier |
| Remofirst | Small teams that want the lowest published EOR starting price and a free contractor tier. | Starting at $199 per person/month (public list price, checked 2026-10-05); 'no hidden fees, setup fees, or minimum contract terms' per vendor page | 185+ countries for EOR (vendor claim) | Visit Remofirst |
| Pebl (formerly Velocity Global) | Companies that want an EOR with a tiered reseller/partner program and are comfortable with a recently rebranded vendor. | Third-party reports a flat $399 per employee/month (not confirmed on vendor page; hellopebl.com/pricing returned 404) | 185+ countries (third-party report) | Visit Pebl (formerly Velocity Global) |
Paying and covering your team in Japan
Related
FAQ
What employer social insurance costs apply in Japan?
About 15-16% of gross pay: pension 9.15%, health ~4.9%, employment ~0.85%, accident ~0.3% plus care insurance for those aged 40-64.
Is severance required?
No statutory severance, but 30 days' notice or pay in lieu is required.
How strict are dismissals?
Very: dismissal needs objectively reasonable grounds and social acceptability.
What is the minimum wage?
Set by prefecture; the average is JPY 1,121 per hour, with a recommended rise to JPY 1,176 from October 2026.