Global Payroll Services in Japan

Already have a Japanese entity, or running payroll across several countries? We place you with a vetted Japanese payroll partner who keeps national income tax, local inhabitant tax, and Kyokai Kenpo health, kaigo, and kosei nenkin pension contributions exactly right, while you stay the legal employer and we stay on your side.

  • Independent advice
  • Vetted partners
  • Multi-country ready

What running payroll in Japan involves

If you already employ people through your own Japanese entity, you stay the legal employer, but you still have to run payroll correctly every month: national income tax withheld under gensen chōshū, the flat-ish local inhabitant tax (jūminzei) charged on last year’s income rather than this year’s, and prefecture-specific Kyokai Kenpo health, kaigo, and kosei nenkin pension contributions that don’t move together. This is where a specialist payroll partner earns its place: you keep the employment relationship, they keep the mechanics right across all of it.

01

You stay the employer

You stay the legal employer of your Japanese staff. The payroll partner runs the monthly mechanics; you keep the employment relationship.

02

Accurate every cycle

National and local income tax, and Kyokai Kenpo health, kaigo, and kosei nenkin pension contributions calculated and withheld correctly, payslips issued, and statutory filings made to the tax office, the municipality, and Kyokai Kenpo on schedule, every month.

03

Multi-country consolidation

Run payroll across several markets under one partner and one process, rather than a different vendor and standard in every country.

How managed Japanese payroll works, step by step

From onboarding your employee data to filing and reconciliation.

01 — Scope & onboard

We map your entity, headcount, and where you employ people, place you with the right vetted Japanese payroll partner, and onboard your employee data.

02 — Set up calculations

National income tax, local inhabitant tax, and Kyokai Kenpo social insurance configured correctly to current rates for the employee’s own prefecture, so every payslip is right from the first run.

03 — Run monthly payroll

Salaries calculated, national and local income tax, and social insurance withheld, payslips issued, and people paid on schedule, every cycle.

04 — File & reconcile

Statutory filings to the tax office, the municipality, and Kyokai Kenpo made on time, with annual reconciliation handled for you.

What payroll in Japan costs

Your statutory employer costs, plus a payroll partner fee. Japan’s employer burden runs across four separate insurance branches plus two tax layers, several revised on their own annual calendar; the value of the partner is accuracy and time, in a system where a wrong prefecture lookup is an easy, invisible mistake.

Employer social security & health insurance

Four branches, each on its own calendar: Kyokai Kenpo health insurance (Tokyo 4.925% employer, prefecture-specific, revised every March), kaigo 0.81%, kosei nenkin welfare pension 9.15% (capped at JPY 650,000/month), and employment insurance 8.5/1000, revised every April.

Minimum wage (2026)

JPY 1,226 per hour in Tokyo, the highest of 47 prefecture-set rates revised every October; the national weighted average is JPY 1,121. You pay the rate of the prefecture where the person is registered.

Income tax (employee)

5% to 45% national progressive tax plus a 2.1% reconstruction surtax, and a roughly flat 10% local inhabitant tax billed on last year’s income, calculated and filed correctly on every payslip.

Payroll partner fee

A transparent per-employee or per-payslip fee. We benchmark across our vetted network, typically 15 to 25% below going direct.

Why run it through Bradford Jacobs

One partner, many countries

If you run payroll across several markets, we consolidate it through vetted partners under one point of contact, not a different vendor and a different standard in every country.

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

Pricing you can’t get direct

Japan’s Kyokai Kenpo health-insurance rate differs by prefecture, and getting a specific employee’s rate wrong because their registration sits in the wrong prefecture is an easy, invisible mistake until it surfaces at audit. We benchmark across our payroll network for rates typically 15 to 25% below going direct, and renegotiate for you at renewal.

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

Dual-system rules that expose risk

The March and April rate-change calendar across health, kaigo, and employment insurance, and reconciling national income tax withholding against the local inhabitant tax billed on last year’s income. We place you with partners who get the specifics right, and we stay on your side if anything needs escalating.

  • Direct escalation
  • No support queues
  • Named account contact

20+ years and the local detail

Two decades running compliant payroll across global markets, including Japan’s four-branch social insurance stack and the annual rate revisions that come with it, the filings, and the year-end detail that exposes risk.

  • Two decades of payroll
  • Deadlines & filings
  • Year-end handled

Built to scale across markets

Run payroll in one country or twenty through one partner and one process. As you add markets, the standard does not fragment, you keep a single point of contact and consistent compliance everywhere.

  • One process everywhere
  • Single point of contact
  • Consistent compliance

The payroll slips Japan’s tax office and Kyokai Kenpo never miss

These are the ones that catch foreign employers, and the reason a specialist partner pays for itself.

Tax & deduction rates

Misapplying the national-plus-local income-tax withholding split. Using the wrong prefecture’s Kyokai Kenpo rate for an employee registered elsewhere. Missing a statutory benefit or leave entitlement. Each is easy to get wrong alone and visible to the tax office and Kyokai Kenpo when you do.

Filings, deadlines & reporting

Late remittance to the tax office, Kyokai Kenpo, or the Japan Pension Service, where penalties and interest apply automatically. None of these are hard for a specialist; all are easy to get wrong alone. That is the whole case for getting your Japanese payroll partner right.

What managed payroll covers

One transparent fee covers the full monthly payroll cycle. No hidden extras.

Tax, social security & health insurance

Compliant Japanese payroll processed monthly, with national and local income tax, and social insurance correct every run.

Payroll & filings

Monthly payroll run, with national and local income tax, and social insurance calculated, withheld, and filed correctly each month.

Statutory benefits

All statutory benefits administered: annual paid leave, parental leave, notice and severance.

Compliance & support

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

Your questions answered

Straight answers on running compliant payroll in Japan.

Do I need a Japanese entity to use payroll services?

Yes. Payroll outsourcing assumes you are the legal employer, which usually means you have a Japanese entity, either a K.K. (Kabushiki Kaisha) or G.K. (Godo Kaisha). If you have no entity and do not want one yet, you need an EOR instead, where the partner is the legal employer. We will confirm which applies to you.

National and local income tax calculation and remittance, employer and employee Kyokai Kenpo health, kaigo, and kosei nenkin pension contributions, statutory benefits and leave, payslips, and all statutory filings to the tax office, the municipality, and Kyokai Kenpo. You keep the employment relationship; they keep it compliant and on time.

FY2026 brought several rate changes payroll has to track on different months: Kyokai Kenpo’s Tokyo health-insurance rate fell slightly to 9.85% from March, the kaigo long-term care rate rose to 1.62%, a new 0.23% child and childcare support levy started from April payroll, and the employment insurance rate fell to 13.5 per 1,000 from April. None of these move together, and missing one on the wrong month is an easy mistake.

Not a single flat percentage: Kyokai Kenpo health insurance (Tokyo 4.925% employer, prefecture-specific), kaigo 0.81% for employees over 40, kosei nenkin pension 9.15% capped at JPY 650,000/month, employment insurance 0.85%, plus fully employer-funded workers’ accident insurance rated by industry. Most Tokyo employers land in the high teens of gross salary before the payroll partner fee, and the exact figure depends on the employee’s prefecture and age.

Yes, and it is one of the main reasons companies come to us. One point of contact and a consistent process across markets, rather than a separate provider and a different standard in every country.

Yes. When you incorporate and become the legal employer, we move your people from the EOR arrangement onto your own compliant Japanese payroll, and manage the handover so nothing is missed.

Need compliant payroll in Japan?

Tell us your entity setup and headcount and we will come back with the right partner and pricing you will not get direct, usually within a day. One process, every country you operate in.

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