This page describes some of the most common benefits for employees of foreign companies in Japan. If you have additional questions, please consult our other pages, including the page about overtime in Japan.
The Labor Law stipulates the minimum amount of paid vacation for employees. The number of paid vacation days is based on seniority in the company
|Paid Vacation earned
Employees may accumulate up to two years’ worth of unused paid vacation; after that, any unused vacation days are forfeited.
In Japan, there is a national universal healthcare system. All Japanese employees enrolled in Social Insurance benefit from this national coverage. Employees receive a Social Insurance card when they are enrolled in the program. With this Social Insurance card, employees can visit any participating medical institution of their choice and receive health care at 30% of the standard cost.
When employees register for Social Insurance in Japan, they also register with the Employee Pension system. This system provides a pension to employees who have worked in Japan for at least 25 years before they reach the age of 60. Pension benefits depend on each person’s career, so there is no standard retirement allowance amount.
While the government of Japan does provide a retirement allowance, these payments are relatively low. Due to that fact, some companies choose to give their employees either a lump-sum payment when they reach retirement age or a fixed-term pension as a way of retaining them until they reach retirement age.
The National Pension plan typically offers a monthly payment between 100,000 JPY and 250,000 JPY, depending on salary, for people who have contributed to the system for at least 25 years during their working years.
The example below is for employees who contribute the maximum amount over 40 years of employment:
A 43-year-old with a monthly payroll of 700,000 JPY → 220,000JPY/month
A 36-year-old with a monthly payroll of 400,000 JPY → 150,000JPY/month
A 33-year-old with a monthly payroll of 300,000 JPY → 133,000JPY/month
Please note that pension tax rates and benefits in Japan change regularly, so it is a good idea to speak with an expert to ensure these calculations are being made correctly. The team at JMC can assist you in calculating pension allowances and other employee benefits.
Companies typically refund commuter expenses based on the monthly train fare although they are not legally obligated to do so. Please note that any compensation for commuter expenses is subject to Social Insurance and Labor Insurance but not to employee income tax.
Business-related expenses, including travel, meals, and lodging, are fully reimbursed to employees.
Reimbursed expenses unrelated to work are usually included in an employee’s salary and are subject to taxation. Health club memberships would be one example. Reimbursement for business expenses is not generally included in the payroll slip.
Generally speaking, employees do not have a right to sick leave in Japan. When an employee gets sick, they are expected to use their paid vacation days to take a leave of absence. Some foreign companies provide sick leave to their employees as a special benefit.
(1) Leave due to death in the family
a. Death of a father, mother, spouse, or child: up to 5 days
In this case, the number of days required for a round trip can be considered as leave; other days may be provided in addition to the number of days indicated above.
b. Death of a grandparent, grandchild, sibling, child’s spouse, or spouse’s parent: up to 3 days
In the event of (a) or (b), when an employee is the chief mourner (the person in charge of arranging the funeral service), additional leave (up to two 2 days) is added.
(2) Leave to attend Buddhist memorial services
For the first-year memorial service of a deceased parent, spouse, or child: 1 day
(3) Transfer leave
Approved number of days in the case of a transfer: up to five 5 days
(4) Leave for marriage
When an employee gets married: five 5 days
(5) Leave for jury service
When an employee is selected as a juror and they must appear in court: the approved number of days.
(6) Public work leave
When an employee carries out public office duties: the approved number of days
Short term leave and long term leave are not regulated by Japanese labor laws. They are a matter of agreement between the company and the employee. Usually, employees can take unpaid short or long-term leave by working it out with their employer.
Employees registered under the Social Insurance general system “Kyokai Kempo” are entitled to receive an annual physical checkup at any hospital designated by the Social Insurance system. Around 7,000 JPY of this cost is provided by the employee. More advanced checkups are available for additional fees.
Employees who want to schedule their annual checkup should do so by making an appointment with a designated hospital. The hospital will then inform the employee about their checkup application procedure.
Once you have found a participating hospital, print out the application obtained from Kyokai Kempo and provide all necessary information such as your insurance number, the date of your health checkup, and the hospital code for the facility where you are receiving care.
Send the completed application to Kyokai-Kenpo by mail. If the hospital is in Tokyo, be sure to send it to the Kyokai-Kenpo Tokyo branch.
On the day of your checkup, be sure to bring your health insurance card to the hospital.
Disclaimer: This information is provided for informational purposes only. Companies should consult with a licensed social insurance consultant before making any decisions based on this information.