Employer of Record in Japan

How hiring through an employer of record works in Japan

The local employer signs the Japanese employment contract, enrolls the employee in social insurance and runs payroll, while your managers direct the daily work. The Labour Standards Act requires the main working conditions, including wages, hours, the contract term and grounds for dismissal, to be given to the worker in writing, and contracts are normally issued in Japanese.

Registration is time-bound. The health and pension acquisition notice is due within five days of hire, and the employer also handles the year-end tax adjustment, known as nenmatsu chosei, which Toku's compliance guide describes as the employee's final tax settlement for most staff.

Employer costs and contributions in Japan

Health and pension premiums are calculated on a standardized monthly remuneration and split equally between employer and employee. Kyokai Kenpo publishes the health insurance rate by prefecture for FY2026, from 9.21% in Niigata to 10.55% in Saga and 9.85% in Tokyo, so the employer's half runs from 4.605% to 5.275%. Employees aged 40 to 64 also pay a nursing care premium of 1.62%, shared the same way. Company health societies set their own rates.

The welfare pension rate is fixed at 18.3%, so the employer pays 9.15%. Employment insurance costs the employer 0.85% in general industry from April 2026, and workers' accident insurance ranges from 0.25% to 8.8% depending on the industry and is paid entirely by the employer. Two child-related charges apply as well: the child-rearing contribution of 0.36% falls wholly on the employer, and the support levy of 0.23% is shared, so the employer pays half of it. Adding the employer's half of Tokyo's health rate (4.925%), pension, employment insurance and the two child-related charges gives roughly 15.4% before accident insurance and the nursing care share for employees aged 40 to 64, and Toku's country data cites a similar figure of about 15%.

Working time, leave and pay rules in Japan

• Hours: the limit is 40 a week and 8 a day, excluding breaks. Overtime needs a written agreement with the union or worker representative that is filed with the labour authority.
• Premiums: overtime is paid at no less than 25% extra, holiday work at no less than 35%, overtime beyond 60 hours a month at no less than 50%, and work between 10 p.m. and 5 a.m. at no less than 25%.
• Annual leave: 10 days after six months of service with at least 80% attendance, rising with tenure, and employers must designate five days a year for staff entitled to ten or more.
• Minimum wage: it is set per prefecture and per hour. Tokyo's is 1,280 yen an hour from October 1, 2026.
• Bonuses: summer and winter bonuses are customary at many Japanese employers although not required by law, and Toku's compliance guide notes that tax is withheld on them.

Probation, dismissal and notice in Japan

Japanese law has no statutory maximum for probation, and the labour ministry says an unreasonably long probation is void. Ending one still needs an objectively reasonable cause, with a little more latitude than for a regular employee.

Dismissal requires at least 30 days of notice, or 30 days of average wages in place of notice, and the Labour Contract Act makes a dismissal void when it lacks an objectively reasonable cause and is not socially acceptable. Toku's compliance guide describes this as one of the strongest employee-protection regimes anywhere, so plan any exit with the local employer rather than informally. Fixed-term contracts are also restricted, with a conversion right to open-ended employment after five years of renewals.

Getting paid in stablecoins, USDC, USDT, tokens and crypto in Japan

Short answer: No. Article 24 of the Labour Standards Act requires wages in currency and the labour ministry says wages paid in crypto assets are not permitted, so a USDC payout cannot replace yen pay.

What the law says about the form of pay

Article 24 of the Labour Standards Act requires wages to be paid in currency, directly to the worker and in full, at least once a month on a fixed date, and the labour ministry states that wages paid in crypto assets are not permitted.

What it means for employee salary

Japanese salary, social insurance and tax therefore stay in yen, and bank transfer is allowed with the worker's consent. USDC or USDT cannot replace a yen salary, and what applies to a specific hire is confirmed when Toku checks the arrangement.

Tax on crypto and tokens

The National Tax Agency treats crypto paid as salary as salary income valued at its price when paid, with withholding worked out on cash plus that value. Gains from selling or swapping crypto are miscellaneous income (sale price minus average cost), losses cannot offset salary, and a salaried person with other income over 200,000 yen must file a return.

How Toku handles it

Employee salary in Japan stays in local currency. Toku’s stablecoin payroll and its USDC or USDT payouts through contractor management are separate arrangements from employee salary, and token grants are administered through token grant administration. What applies to a specific hire in Japan is confirmed before an offer.

Reviewed November 7, 2026 against the official sources listed below. General information, not legal or tax advice. Tax on crypto or tokens received depends on local rules and where the person is resident, so confirm it with a local adviser.

How hiring through Toku works in Japan

1. Share the role, location, salary and start date.
2. Toku confirms coverage, the contract type and the right to work.
3. The local employer issues the contract and onboards the person.
4. Payroll, contributions and filings run each cycle.

Toku checks the role, location and contract terms before a start date is set. Gather identification, bank details, any existing pension and employment insurance numbers and the agreed yen salary, and expect the social insurance acquisition notice to be filed within five days of the hire date. Your quote confirms the onboarding timeline for Japan.

What an employer of record costs in Japan

Where Toku supports the hire, its employer of record service starts at $599 per employee per month, with salary, employer contributions and benefit premiums itemized in your quote. Coverage in Japan is confirmed before an offer. See the published pricing.

More on hiring in Japan

• Payroll and hiring in Japan
• Japan full-time hiring compliance guide
• Employer of record coverage in 100+ countries