JPY
126.3 million
$5.08 trillion
monthly
63rd Ranked
Japanese
Hiring Considerations in Japan
Benefits of hiring in Japan
Home to the world’s third-largest economy, Japan’s diverse and innovative economy offers businesses across many sectors a stable market for growth. Tech firms, especially, find Japan an attractive market.
The Japanese government invests heavily in R&D and ranks among the top three countries in R&D spending as a percentage of GDP. This dedication extends into the private sector, with more patent applications per one million residents than in any other country.
Japan’s geography makes it a strategic location for continued activities in the Asia-Pacific region. With 18 free trade and economic partnership agreements, Japan offers significant export opportunities to neighboring markets.
Japan’s diverse and innovative economy offers businesses across many sectors a stable market for growth.
Challenges when expanding into Japan
Although Japan presents many growth opportunities, it ranks 29th regarding ease of doing business. Businesses must anticipate regulatory and bureaucratic factors that may not exist in their home country.
Companies must plan for the lengthy tax-paying process in Japan. At 129 hours per year to complete the required 19 payments, paying taxes in Japan is likely quite different from its domestic location.
Japan’s business culture departs from some Western norms despite its close relationship with many Western markets. Most Japanese businesses operate under a relatively formal, hierarchical structure, which may present communication and deal-making challenges for foreign companies.
Companies must plan for the lengthy tax-paying process in Japan.
Cultural nuances and must-knows for doing business in Japan
Bow during introductions, though most Japanese understand that Westerners may not immediately adhere to this cultural norm. Accordingly, handshakes are increasingly common. However, remember to bow, as it is a sign of respect.
Greet the most senior meeting members first. Doing so shows respect for both age and position.
Utilize a few Japanese phrases when appropriate. It is reasonable to expect at least one English-speaking participant, but using a few Japanese phrases goes a long way.
Avoid placing your hands in your pockets during a conversation, and do not look at your phone.
Greet the most senior meeting members first. Doing so shows respect for both age and position.
Hiring in Japan
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Minimum wages and salaries
- Japan’s national minimum wage is ¥901 per hour, or $8.45.
- The country’s Labor Ministry announced in August 2020 that the minimum wage will increase to ¥902 on October 1, 2020, or later.
- Minimum wages vary between regions and industries. If an employee is subject to two different minimums, they are entitled to the greater amount.
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Probation periods
- Probation periods are common in Japan, and typically last around three months, though employers may extend them.
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Bonuses
- Employers typically pay bonuses twice per year, often in the summer and winter. The amount varies, but management and labor negotiations determine the amounts and conditions.
- Company performance plays a substantial factor in the amount paid. However, companies must pay bonuses once management and labor reach an agreement.
Leave entitlements in Japan
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Maternity leave in Japan
Expectant mothers receive six weeks’ paid leave before birth and eight weeks’ paid leave after giving birth. Mothers receive 100% of their salary during this time.
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Paternity leave in Japan
Both mothers and fathers may take childcare leave. Mothers’ leave periods may begin the day after their maternity period ends. Fathers may begin their leave period between the child’s birth and their third birthday. Both parents may take up to three child leave periods.
Mothers and fathers each receive 67% of their gross monthly salaries during childcare leave, including allowances but excluding honorariums for the first 180 days once the maternity leave period ends. -
National and regional leave in Japan
Employers must grant employees a minimum of 10 days’ paid leave, though paid leave varies based on years of service.
- .5 years - 10 days paid leave
- 1.5 years - 11 days paid leave
- 2.5 years - 12 days paid leave
- 3.5 years - 14 days paid leave
- 4.5 years - 16 days paid leave
- 5.5 years - 18 days paid leave
- 6.5 years - 20 days paid leave
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Sick leave in Japan
There are no mandatory sick leave provisions in Japan.
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