GLOBAL EMPLOYER OF RECORD IN 190+ countries

Employer of Record in Japan

Put the people you need in Japan in place without turning every hiring decision into a corporate set-up project. Acumen acts as your Employer of Record, so you can test the market, build the team and keep future incorporation as a separate business decision.

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GLOBAL EMPLOYER OF RECORD

Global coverage

Acumen International delivers global employment solutions across 190+ countries.

Strategic markets

Hiring and compliance support across North America, Europe, and Asia-Pacific.

Established jurisdictions

Lawful employment and payroll in regulated, compliance-intensive countries.

Growth economies

Expanding into new regions? Hiring support across fast-moving economies.

Risky and remote locations

Compliant employment solutions in jurisdictions with limited infrastructure.

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Build your team in Japan without establishing a local entity, with every employment, social insurance enrolment and work visa held to Japanese labour law.

Acumen International employs sales leaders, engineers, specialists and foreign professionals in Japan for companies that want to operate in the market before, or instead of, incorporating a kabushiki kaisha.

Employer of Record services in Japan

As a Global Employer of Record, Acumen International holds a Japanese employment contract with each employee as the legal employer, and a service agreement with your company that fixes the role and the services. Your company directs the work and owns its results.

In Japan that arrangement sits under the Worker Dispatch Act, which sets how long a placement can last, how pay compares with your own staff and how candidates are chosen. Acumen International plans each hire around those rules before the offer, so the employment holds for as long as you need it.

The same model runs in more than 190 countries, so a team in Tokyo can grow alongside hires in Singapore, South Korea or Australia through one provider.

Where the right person has not yet been found, Acumen International can also run the search, from specialist recruitment to executive search, with background and education checks before the offer.

When companies hire in Japan through an Employer of Record

Entering Japan before incorporating

A company wins its first Japanese customers but has not yet registered a kabushiki kaisha or godo kaisha, opened a corporate bank account or enrolled with the pension office and labour bureau. Acumen International employs the first hires while the company decides whether, and when, to incorporate.

Serving Japanese customers in their own business culture

A company winning business in Japan needs account managers and support engineers who work in Japanese and in local business practice. Acumen International employs that team in Japan, so the company keeps customer relationships close without building a local HR and payroll function.

Bringing in a foreign engineer or specialist

The right person for the role is outside Japan. Acumen International acts as the Japanese contracting organisation for the Certificate of Eligibility and the status of residence, so the specialist can come to Japan without the company having an entity there.

Running a long-term software or R&D team

A company wants a development team in Japan for several years. Acumen International employs the team on indefinite-term contracts, which takes the employees outside the Worker Dispatch Act’s three-year limit for the same person in the same unit.

Appointing a country manager

A company needs a senior leader in Tokyo to build the business. Acumen International employs the country manager on an indefinite-term contract with Japanese payroll, shakai hoken and resident tax, and the role’s authority is set so the company’s tax position in Japan stays as intended.

Hiring a bilingual returnee

A Japanese professional returning from study or work abroad brings the language and international experience the company needs. Acumen International re-enrols them in Japanese social insurance and tax and employs them for the company.

Taking over a distributor’s team

A company ends its sole distributor agreement in Japan and wants the sales and service people who know its products and customers. Acumen International employs them directly for the company while it builds its own presence.

Supporting a regulatory or clinical programme

A medical device or pharmaceutical company needs regulatory affairs and clinical staff for PMDA submissions and studies at Japanese hospitals. Acumen International employs the specialists for the length of the programme.

Moving contractors onto employment

A company has engaged people in Japan on service contracts but directs their work like employees, which Japanese law treats as disguised contracting. Acumen International moves them from contractor arrangements onto employment contracts with social insurance and paid leave.

Covering childcare leave

Japanese employees can take extended childcare leave, and cover for a worker on leave is exempt from the Dispatch Act’s period limits. Acumen International employs a replacement for the length of the leave, and the role stays open for the employee’s return.

Employer of Record vs a Japanese entity vs contractors

The Worker Dispatch Act and Employer of Record in Japan

When one company employs a person who works under another company’s direction, Japanese law treats the arrangement as worker dispatch. The Act on Securing the Proper Operation of Worker Dispatching Undertakings sets the conditions, and a client that receives staff outside them can find itself treated as their employer.

Who may dispatch. Only a licensed dispatching employer may supply staff to work under a client’s direction. Dispatch is prohibited in port transport, construction and security work, and allowed in medical work only in narrow cases.

Period limits. The same dispatched person may work in the same organisational unit of a client for up to three years, and a client site may use dispatched staff for up to three years unless the period is extended after hearing the client’s majority union or employee representative. Neither limit applies to dispatched staff employed on indefinite-term contracts, to those aged 60 or over, or to cover for an employee on maternity, childcare or family care leave.

Equal pay. Since April 2020, dispatched staff must receive pay and treatment either equal or balanced with comparable employees at the client, or set under a labour-management agreement that meets the government’s wage benchmarks. The client must provide information on its comparable employees before the contract is signed.

Selection and former employees. A client should not pick dispatched staff through interviews or CVs before the dispatch contract, except under temp-to-perm dispatch (shokai yotei haken) with direct hire in view. A client also may not receive its own former employee as dispatched staff within one year of that person leaving.

Deemed offer of employment. Where a client knowingly or negligently receives staff in breach of these rules, including through disguised contracting, the law deems it to have offered the worker direct employment on the same terms.

Acumen International sets the contract type, the pay benchmark, the selection route and the term of each hire before the offer, so the arrangement stays within the Act for as long as it runs.

Japan payroll and HR compliance

Salary, working hours and payroll tax in Japan

Minimum wage. Set by prefecture and revised each autumn. The national weighted average for fiscal 2026 is ¥1,177 an hour, and Tokyo’s rate is ¥1,280 from 1 October 2026. Other prefectures move to their new rates between October and early December 2026.

Working time. The statutory limit is 8 hours a day and 40 hours a week, with at least one day off a week. Any overtime requires an Article 36 agreement filed with the labour standards office, capped at 45 hours a month and 360 a year, or 720 a year under special provisions.

Premium pay. 25% for overtime, 50% for overtime beyond 60 hours in a month, 35% for work on a statutory day off and 25% for late-night work between 22:00 and 05:00. Managers and supervisors are outside the hours and overtime rules, judged by their actual authority rather than title, but still receive the late-night premium.

Income tax. National income tax runs from 5% to 45%, plus a 2.1% reconstruction surtax on the tax due until 2037. Resident tax adds a further 10% of the previous year’s income, collected by the employer.

Employee social insurance. In Tokyo for fiscal 2026, employees pay half of each total rate: health insurance 9.85%, the child and childcare support contribution 0.23%, nursing care insurance 1.62% from age 40 to 64, and welfare pension 18.3%, each on standard monthly remuneration up to the statutory cap. Employment insurance costs the employee 0.5%.

Employment contracts and work rules in Japan

Written conditions. The employer must state in writing the contract term, place and content of work, working hours, breaks, days off and leave, wages, and the grounds for resignation and dismissal. Any term below the statutory standard is void and replaced by the standard.

Work rules. An employer with ten or more employees must draw up work rules (shugyo kisoku), consult the employee representative and file them with the labour standards office. In practice the work rules carry much of the employment relationship, including discipline, transfers and allowances.

Fixed-term contracts. A single fixed term may not exceed three years in most cases. Once successive fixed-term contracts with the same employer pass five years, the employee may convert to an indefinite-term contract, and refusing to renew a contract the employee could reasonably expect to continue is treated like a dismissal.

Probation. Three to six months is usual. Ending employment during or at the end of probation still needs objectively reasonable grounds that were not apparent at hiring.

Employee inventions. Under Article 35 of the Patent Act, the employer can acquire the rights to an employee invention from the moment it is made, provided its work rules or contract say so, and the employee is entitled to a reasonable benefit in return. The contract and work rules need to set that out for the client’s ownership to be clear.

Restrictive covenants. Courts enforce post-employment non-competes only when they protect a legitimate interest, are limited in time, area and scope, and are usually supported by compensation. Confidentiality obligations are easier to uphold.

Termination of employment in Japan

Grounds. Under Article 16 of the Labor Contract Act, a dismissal without objectively reasonable grounds that is not appropriate in general societal terms is void as an abuse of rights. Courts read this strictly: poor performance usually needs documented warnings, training and a chance to improve, and redundancy needs a demonstrated business need, efforts to avoid dismissal, fair selection and consultation.

Notice. At least 30 days’ notice or 30 days’ average wages in lieu, under the Labor Standards Act.

Protected periods. Dismissal is prohibited during leave for a work-related injury or illness and for 30 days after it, and during maternity leave and for 30 days after it. Dismissal connected with pregnancy, childbirth or childcare leave is void.

Mutual separation. Because unilateral dismissal is hard to sustain, most exits are agreed. The employer offers a separation package and the employee resigns under a written agreement.

Severance. Japanese law requires no statutory severance. Retirement allowances are common where the work rules or contract provide for them, and separation packages are negotiated case by case.

Employment risks in Japan and how Acumen International mitigates them

Japan work visas for foreign professionals

Permanent residents and spouses of Japanese nationals can work without restriction. Most other foreign hires need a status of residence that matches their duties, supported by a Japanese contracting organisation.

Engineer/Specialist in Humanities/International Services. The main status for professional hires. The work must draw on engineering, natural sciences or humanities, or on knowledge of a foreign culture, and the employee needs a relevant degree or, in most cases, ten years’ experience. Pay must be at least what a Japanese employee would receive for the same work.

Highly Skilled Professional. A points-based status for applicants with strong education, experience and income, with preferential treatment that includes a longer period of stay and a faster route to permanent residence.

The process. The contracting organisation applies to the Immigration Services Agency for a Certificate of Eligibility. Once it is issued, the employee applies for a visa at a Japanese embassy or consulate and receives the residence card on arrival.

What Acumen International contributes

• A Japanese contracting organisation, so a company with no entity in Japan can still bring in a foreign professional.
• Duties and pay set to match the status applied for, so duties and pay are not the reason an application fails.
• Status kept valid through every renewal and every change of role, so the employee’s right to work stays current.

Family members

Spouses and children can join on Dependent status. Dependent status does not allow work on its own; a spouse who wants to work needs permission for activity outside the status, which generally allows up to 28 hours a week.

Cost of hiring in Japan

Employer contributions on top of gross pay in Tokyo for fiscal 2026, as half of each shared rate:

Health insurance, nursing care and pension are charged on standard monthly remuneration, a banded figure reviewed each year, and also on bonuses. On a salary of ¥600,000 a month, the employer’s statutory contributions come to about 15% of pay, or about 15.9% for an employee aged 40 to 64, before workers’ accident insurance.

Most professional packages also carry a commuting allowance and two bonus payments a year, which the cost plan needs to include. The Global Payroll Calculator gives the full employer cost for any salary in Japan.

Hiring cases in Japan and how they are handled

Benefits and leave in Japan

Annual paid leave. Ten days after six months’ service with at least 80% attendance, rising with each year to 20 days from six and a half years. Unused days carry over for one year, and the employer must make sure each employee granted ten or more days takes at least five.

Public holidays. Japan has 16 national holidays a year, but the law does not require them to be paid days off. The work rules set which days the business closes, and most employers follow the national calendar and the New Year and summer breaks.

Sickness. There is no statutory paid sick leave. From the fourth day of absence, health insurance pays an injury and sickness allowance of about two-thirds of pay for up to 18 months.

Maternity and childcare leave. Maternity leave runs from six weeks before birth to eight weeks after, with a childbirth allowance from health insurance. Either parent can take childcare leave until the child turns one, extendable to two where no daycare place is available, with benefits from employment insurance. Fathers can also take up to four weeks of post-birth childcare leave in the first eight weeks.

Competitive packages. Professional benefit packages in Japan usually include two bonus payments a year, a commuting allowance and often a housing allowance or company-leased accommodation, with private medical cover and a defined contribution pension at senior level.

Sources

1. Minimum wage information 2026
2. Reiwa 8 minimum wage revisions reported for all prefectures
3. Reiwa 8 health insurance rates by prefecture
4. Reiwa 8 employment insurance rates
5. Labor Contracts Act
6. Labor contracts
7. Human resource management
8. Taxes in Japan
9. Visas and status of residence
10. Equal pay for equal work for dispatched workers
11. Japan: amendment to the Worker Dispatch Act
12. Pay equity laws in Japan
13. Expansion of the scope of mandatory disclosure of gender pay gap