How to Hire and Pay Employees in Japan: A Clear Guide for Global Employers

Japan: the birthplace of sushi, anime, and samurai. What more do you need?

But if that isn’t reason enough to want to expand, there’s more: The market is mature, the infrastructure is strong, and the workforce is highly skilled. Hiring or expanding to Japan is a no-brainer, but once you start looking into it, things get complicated fast.

You’ll need contracts with specific clauses, payroll schedules you’ve never used before, and government forms in a language you might not read (just knowing sugoi and konnichiwa isn’t going to cut it). Don’t sweat it—that’s where this guide comes in. We’ll walk you through the legal must-haves, break down payroll norms, and show you smarter ways to make hiring in Japan work without the guesswork.

Requirements for hiring in Japan

If you’re planning to hire in Japan, there’s no room for half-measures. The system is precise and designed to protect employees. That means you need to be precise, too.

Here’s what you’ll need to legally hire an employee in Japan:

Required documentation and government steps

• Employment contracts. Required for fixed-term employees, and a good idea for everyone else. Contracts should clearly outline job duties, wages, work hours, and contract duration.
• Labor Standards Act compliance. The Labor Standards Act outlines key protections for employees, including limits on working hours, rules for overtime, and paid leave requirements.
• Notification to Hello Work. Japan’s public employment office must be notified when a new employee joins your team.
• Social insurance registration. You’re responsible for enrolling your employee in the country’s four major systems: Health Insurance, Pension, Employment Insurance, and Workers’ Accident Compensation.
• Tax registration. You’ll also need to register with the local tax office and manage monthly withholding for income tax.

Hiring process and timelines

Hiring in Japan typically follows this sequence:

• Recruitment. Expect about 2–6 weeks to source and screen candidates.
• Naitei. This is the informal offer made before the contract is signed. It’s standard practice and culturally significant.
• Onboarding paperwork. Collect the employee’s My Number (national ID), bank info, and social insurance documents.
• Government notifications. Social insurance registration must be done within five days of starting. Tax paperwork is due within a month.

And if you’re hiring foreign nationals? Add extra time for visa processing. The application must align with the job title, salary, and your company’s qualifications as a visa sponsor. For more details, review How to Get a Japanese Work Visa: Step-by-Step Guide.

Options for hiring employees in Japan

You’ve got a few options when it comes to actually bringing someone on board in Japan. Each one has its own rules and trade-offs:

• Direct employment. Best if you already have a legal entity in Japan. Gives you full control, but requires deep compliance know-how.
• Recruitment agencies. Good for faster hiring and access to niche talent pools. You’ll still need to manage onboarding and payroll.
• Staffing agencies. The agency is the legal employer and sends the worker to your company. Handy in the short term, but less flexible for long-term hires.

If you don’t have a local entity in Japan, working with an Employer of Record (EOR) is often the simplest route. An EOR handles visa sponsorship and hires employees on your behalf, managing payroll and all other compliance steps.

Hiring foreigners in Japan

To legally hire foreign employees, you’ll need to:

• Sponsor a work visa under the appropriate category
• Meet minimum salary and job duty standards
• Offer onboarding support to help with cultural and language adaptation

Japan is opening its doors wider to global talent, but employers still have to be careful to meet all requirements.

Payroll and compensation

Once you’ve hired someone, the next hurdle is paying them correctly—and in Japan, the payroll process is detailed.

Common payment systems and schedules

Most companies in Japan pay salaries monthly by direct deposit. The payday usually falls on the 25th or the last business day of the month. According to the Bank of Japan, bank transfers are standard. Digital pay slips are becoming the norm, especially in larger organizations. Cash payments are still legal but are rarely used.

Payroll deductions and statutory benefits

These deductions come out of your employee’s paycheck, and you’re responsible for calculating and submitting them correctly:

• Income tax
• Resident tax
• Social insurance
• Health Insurance
• Pension Insurance
• Employment Insurance
• Workers’ Compensation Insurance

Your share of these employer contributions typically ranges between 15% and 17% of salary, depending on your industry and location.

To stay compliant, you’ll need to file reports annually and keep detailed payroll records. Many companies use local payroll partners or HR platforms to simplify the process.

Tips and resources for a successful application

Even experienced HR teams need help staying on top of Japan’s hiring rules. These quick wins make a difference:

• Create a compliance calendar. Track every deadline from tax filings to contract renewals.
• Use HR software. Digital systems help manage onboarding, payroll, and document storage.
• Stay in sync across time zones. If your team is global, set expectations early about work hours and communication.

Make Japan part of your global growth story

You can absolutely hire in Japan, but only if you take a structured, compliant approach. Start with a smart plan, know your obligations, and use the right support when it matters most.

Hiring someone in Japan shouldn’t feel like a legal obstacle course—and with Pebl, it doesn’t have to be.

Here’s how Pebl can help

Wouldn’t it be great if there was a way to hire in Japan quickly, compliantly, and without the headache of learning the ins and outs of Japanese labor law? If all you had to do was find the talent. Sound too good to be true?

With Pebl, you get all that and more.

Here’s how it works: Our employer of record service in Japan hires your talent through our local entity. We manage payroll, withhold taxes, and keep everything compliant with Japanese law. That means no entity setup, no worrying about misclassifying employees, and no late-night Googling of labor laws.

Pebl is your partner in building smart, scalable systems that work across borders.

Contact us when you’re ready to grow your team in Japan.

This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided “as is,” and no representations are made that the content is error-free.

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