Payroll Professionals in Japan by Anthony Trotter

Posted about 1 year ago by Reili Sweet


Payroll Professionals in Japan by Anthony Trotter


Payroll Specialists are a very important part of the Human Resource function in Japan. Due to specific Japanese deductions and additions, this is not a position that is easily outsourced overseas. The Payroll Specialist in Japan is a highly valued, highly trained professional that is essential to the functioning of the Japanese economy.


Responsibilities of the Japanese Payroll Professional

  • Taxes – There are a variety of taxes that a Japanese Payroll Professional has to be able to handle. Included in these taxes are:

                    Payroll taxes – there are two types – Social Insurance and Labor Insurance. Social Insurance is for the government pension, health and nursing plan for those over 40 years old. Labor insurance covers unemployment and accident insurance. These payroll taxes are paid by the company on behalf of the employee. Social Insurance is paid monthly and Labor insurance is paid annually in advance.

                    Income taxes – Again there are two types of income tax, National, and Resident. National tax goes to the country’s government while the Resident tax is paid directly to the registered area the employee lives in. The company pays (deducted from and paid on behalf of the employee) the employee resident withholding tax on the 10th of each month. Small businesses can pay twice a year instead of monthly.  

                    End of year adjustment – calculates the national income tax and whether an adjustment (refund or payment) to/ from the employee is needed. Resident taxes are also adjusted at the end of the year and the amount due the following year is calculated.


  • Benefits and Bonuses – Tabulating workers benefits and bonuses is a major part of the payroll specialist job in Japan. There are several benefits that everyone receives such as;

                    Paid Vacation – the minimum amount of paid vacation is set by law in Japan. You can accumulate as much as two years and after that, it is lost.

                    Social Insurance – covered in the previous section.


  • Overtime and Commutation

                    Overtime – All employees in Japan receive overtime pay if they work over 40 hours a week unless they are in management. If overtime is a constant the employee and company sign an agreement that references the Japanese Labor Law Article 36. The agreement is often called article 36 for that reason. There are also overtime limits established in Japan. They include when overtime must be paid.

Pay rate is also regulated for overtime in Japan.


Opportunities for Japanese Payroll Professionals

  • In Japan – There is a multitude of opportunities for the professional payroll specialists. Talk to me if you are looking for opportunities to specialize in payroll, a career with strong long-term stability.