Employer of Record (EOR) in Japan

Hire in Japan in days, with no entity and no exposure to getting the Labour Standards Act’s dismissal and payroll rules wrong. We place you with the right vetted EOR partner, at pricing you will not get going direct, and stay on your side for the life of the relationship.

  • Independent advice
  • Vetted partners
  • Operational in days

What an Employer of Record does for you in Japan

An Employer of Record is a company that legally employs your Japanese staff on your behalf. You choose the person and direct their work day to day. The EOR is the legal employer on paper, which is what lets you build a team in Japan without forming your own company.

In practice the EOR partner takes on everything that needs a Japanese legal entity and local expertise: a compliant employment contract under the Labour Standards Act, monthly payroll with national income tax, local inhabitant tax, health insurance, kaigo (long-term care) insurance, kosei nenkin (welfare pension), and employment insurance withholding, employer contributions and all statutory filings to Kyokai Kenpo, the Japan Pension Service, and the National Tax Agency, statutory benefits and leave, and compliant onboarding and lawful exits with the correct statutory notice, since Japan is not an at-will market. You get a working team in days. The EOR carries the legal and compliance weight; you carry the commercial relationship. The only question worth spending time on is which partner is genuinely strong in Japan, and that is the question we answer for you.

01

Legal employer, on paper

A compliant Japanese employment contract that meets Labour Standards Act requirements, with all statutory terms correct from day one.

02

Compliant from day one

Monthly payroll, national income tax and local inhabitant-tax withholding, health insurance, kaigo, kosei nenkin, and employment insurance contributions, and all statutory filings to Kyokai Kenpo, the Japan Pension Service, and the National Tax Agency.

03

No entity required

Statutory benefits, annual leave, notice and severance under the Labour Standards Act, and lawful onboarding and exits. You get a working team in days; the EOR carries the legal weight.

How it works: four steps to a compliant hire

From first call to a compliant Japanese hire at work, usually in days.

01 — Scope & quote

We map the role, salary, and start date, and come back with a clear all-in monthly cost. No guesswork, no hidden extras.

02 — Compliant contract

Your employment contract is drafted to Japanese standards by the partner, and we sanity-check the terms and pricing before you sign. Compliant from day one.

03 — Onboard in days

A correct Japanese contract is issued under the Labour Standards Act, with all statutory terms from day one. Your hire can start in days.

04 — Payroll & compliance run

National income tax, local inhabitant tax, and social insurance calculated and withheld, payslips issued, statutory filings made to Kyokai Kenpo, the Japan Pension Service, and the National Tax Agency. You direct the work; the compliance just runs.

What EOR in Japan costs: the employer and employee stack

Two parts: the statutory cost of employing someone, and the EOR partner fee. In Japan, your EOR partner remits five separate contribution streams every month on your behalf, health insurance, kaigo, kosei nenkin, employment insurance, and workers’ accident compensation, rather than one combined payroll tax. We make every stream transparent before you commit, so there are no surprises.

Employer contribution stack (Tokyo)

Four branches, each remitted separately at the Tokyo (FY2026) rates we use as our representative figure: health insurance via Kyokai Kenpo at 4.925%, kaigo (long-term care) insurance at 0.81% for employees aged 40 to 64, kosei nenkin (welfare pension) at 9.15%, and employment insurance at 0.85%. Workers’ accident compensation sits on top, 100% employer-funded and rated by industry. Kyokai Kenpo’s rate is set per prefecture and revised every March, so Tokyo is representative, not universal.

Minimum wage: set by prefecture, not nationally

Japan sets minimum wage prefecture by prefecture, 47 separate rates, revised every October. Tokyo, our representative figure, is JPY 1,226/hour from 3 October 2025; the national weighted average is JPY 1,121/hour. Your actual figure depends on where the employee is registered, not a single Japan-wide number.

Income tax: withheld in two layers

Your EOR partner withholds national income tax monthly via gensen chōshū (source withholding), on a seven-bracket progressive schedule from 5% to 45%, plus a 2.1% Special Reconstruction Income Tax surtax calculated on the tax liability itself, not on gross pay. A separate, roughly flat 10% local inhabitant tax is collected on behalf of the employee’s municipality. Each December, the partner runs nenmatsu chōsei (year-end adjustment) to reconcile the year’s actual withholding against liability. Borne by the employee, not added to your cost.

EOR partner fee

A transparent per-employee monthly fee. We benchmark across our vetted network, typically 15 to 25% below going direct, and renegotiate for you at renewal.

Why run it through Bradford Jacobs

We know which EOR partners are genuinely strong in Japan, by sector and by complexity. We place you with the right one, at pricing you will not get going direct, and stay on your side for the life of the relationship.

Independent, not a single provider

We are independent: we assess what you actually need, place you with the right vetted partner, secure pricing you will not get going direct, and stay on your side to escalate or renegotiate. You get advice, not a product pitch.

  • Independent advice
  • Vetted partners only
  • On your side at renewal

Pricing you can’t get direct

Japan’s employer cost splits across five separate contribution streams, with the largest, Kyokai Kenpo health insurance, priced differently in every one of the 47 prefectures and revised every March, which makes it easy to under- or over-quote a monthly fee up front. We benchmark across our partner network for rates typically 15 to 25% below going direct, and renegotiate on your behalf at renewal. Most companies do not know how much room there is to negotiate. We do.

  • 15-25% below direct
  • Network benchmarking
  • Renegotiated for you

Straight to the top when it matters

When something needs resolving, and in global employment it sometimes does, you come to us. We escalate directly, past the helpdesk, to people who can actually move it.

  • Direct escalation
  • No support queues
  • Named account contact

Two decades across markets

Two decades placing and managing EOR arrangements across global markets, with the local knowledge of prefecture-by-prefecture Kyokai Kenpo rates, Japan’s multi-branch social insurance stack, and the Labour Standards Act’s dismissal-protection regime that keeps you compliant.

  • EOR specialists
  • Labour Law & Kyokai Kenpo
  • Risk removed

Built for conversion to your own entity

Most companies use EOR for 12 to 24 months, then move to their own Japanese Kabushiki Kaisha (K.K.). We plan that crossover and manage the transition when the economics justify it.

  • EOR to entity path
  • Transition managed
  • Crossover planning

Why an EOR is the fastest compliant way into Japan

Two things slow foreign employers down in Japan: the time to incorporate, and the risk of getting the Labour Standards Act’s dismissal-protection rules wrong. An EOR removes both.

Working time, leave & contracts

Compliance spans the Labour Standards Act and Japan’s five-branch social insurance system. Japanese employment law requires mandatory health insurance, kosei nenkin, employment insurance, and workers’ accident contributions, and dismissal that is only lawful for justifiable cause, not at-will termination. An EOR carries all of it correctly from day one, so a wrong assumption never becomes a liability.

Operational in days, not weeks

Incorporating in Japan means notarised articles of incorporation for a K.K. before the Legal Affairs Bureau completes registration, or a faster, notary-free filing for a G.K. (Godo Kaisha), and you cannot legally employ anyone until it does. An EOR removes that wait entirely: a compliant Japanese contract is issued and your hire starts in days. You prove the market first, then incorporate later only if the headcount justifies it. This is the real value of EOR in Japan: speed into a multi-branch, prefecture-varying system, with the compliance carried by an expert.

Everything your Japanese EOR covers

One transparent monthly fee per employee covers all of this. No hidden extras.

Compliant Japanese contract

A compliant Japanese employment contract that meets Labour Standards Act requirements, issued and maintained for you.

Payroll, social security & health insurance

Monthly payroll run, with national income tax, local inhabitant tax, health insurance, kaigo, kosei nenkin, and employment insurance contributions calculated, withheld, and filed correctly each month.

Statutory benefits

All statutory benefits administered: annual leave, public holidays, and maternity/childcare leave under Japan’s health and employment insurance systems, plus notice obligations on exit, since Japan is not an at-will market. Employee-side health insurance, kosei nenkin, and employment insurance deductions run roughly 14.6% to 15.4% of gross (the higher end applies to employees aged 40 to 64, who also pay the kaigo levy), deducted from salary, not billed to you.

Compliance & support

Ongoing HR compliance and a single point of contact, for the life of the engagement.

Your questions answered

Straight answers on how Employer of Record works in Japan.

Is my hire employed by Bradford Jacobs or by me?

Legally, your hire is employed by the Japanese EOR partner we place you with, which is what keeps you compliant without an entity. Day to day they work for you: you set the work, the goals, the relationship. You get the team; the partner carries the legal employer obligations.

Usually within days once the role and salary are agreed, with a compliant Japanese contract from day one. Compare that to the notarised-articles and Legal Affairs Bureau registration route required to incorporate your own K.K., during which you cannot legally employ anyone.

Not one number: Japan’s employer cost runs through five branches. Health insurance (Kyokai Kenpo, prefecture-set; Tokyo 4.925%), kosei nenkin (9.15%), and employment insurance (0.85%) apply to everyone; add kaigo (0.81%) only for employees aged 40 to 64. That is roughly 14.9% to 15.7% of gross before workers’ accident compensation, which sits on top at an industry-rated 0.25% to 8.8%, 100% employer-funded. Add the transparent EOR partner fee and you have your all-in cost.

Yes, when done properly. The EOR is a real Japanese legal employer meeting all Labour Standards Act, social-insurance, and tax obligations. The risk is using an under-resourced partner, which is exactly why we place you with vetted partners and stay on your side.

The compliant contract, monthly payroll (national income tax, local inhabitant tax, and social-insurance withholding), employer contributions, statutory benefits and leave administration, and ongoing HR compliance. We give you one all-in monthly figure up front, with no hidden extras.

Yes, and most companies do once the headcount and permanence justify it. We manage the transition from EOR to your own Japanese K.K., and can support the incorporation itself. Most use EOR for 12 to 24 months first.

Ready to hire in Japan?

Tell us the role and we will come back with a compliant, all-in monthly cost and the right partner, usually within a day. No entity, no lock-in, no pitch, just the fastest compliant way to get your person working in Japan.

Tax and labour data verified July 2026 (Kyokai Kenpo, Japan Pension Service, MHLW, NTA). Figures change; we confirm the current position when we scope your hire.