Employer of record services in Japan

Yes. We manage shakai hoken (health insurance, welfare pension, employment insurance, and workers’ accident compensation), which together run to roughly 15% of salary for the employer, along with income tax and resident tax withholding. Japanese employment law makes unilateral dismissal without clearly documented just cause very difficult, and we structure contracts and any exits with that legal reality in mind.

Twice-yearly bonuses (typically in summer and winter), while not strictly mandated by law, are a strong cultural and market expectation in Japan and often make up a significant share of total annual compensation. Competitive employers also add commuting allowances (a near-universal Japanese benefit), housing support, and supplementary health checkups beyond the statutory minimum.

Statutory minimum notice is 30 days, or payment in lieu, but the bigger consideration in Japan is that courts interpret ‘just cause’ for dismissal very strictly, and termination without clear, well-documented cause carries significant legal risk regardless of notice given. Mutual agreement (taishoku kanshō) is the far more common and lower-risk way to end an employment relationship in Japan.

An EOR can typically onboard within one to two weeks for social insurance registration and contract issuance, compared with the couple of months often needed to establish a Japanese subsidiary (kabushiki kaisha) or branch and register with the tax office, pension office, and labor bureau.

Japan’s strict approach to dismissal, combined with distinctive bonus culture and shakai hoken administration, requires local expertise that’s hard to replicate without an in-country presence. An EOR takes on that compliance and the associated liability, which is typically the safer and faster route for an initial Japanese hire.