Payroll Outsourcing in Japan
Japan Payroll Service
No matter where you need it, our team of local experts at GlobalPEO will manage all of your foreign payroll operations. We get it; coordinating payroll is challenging enough on its own, and can become a logistical nightmare once multiple languages, rules, and regulations are involved.
We are proud to streamline the experience to guarantee compliance and make your global expansion into China a breeze.
Learn how Japan’s laws and regulations surrounding taxes will impact your hiring and payroll processes.
Depending on the size of your business and your specific needs, GlobalPEO offers a variety of payroll solutions to make sure you’re covered with full compliance, no matter what.
In order to set up payroll services in Japan, you will either need to set up a subsidiary of your own, or work with an International Payroll company like us here at GlobalPEO.
When setting up an employment contract in a foreign country, there are unique rules and regulations you must follow to ensure full compliance. Learn more about the specific terms that are required for all contracts in Japan.
Japan Payroll Outsourcing Benefits
Japan's Taxation Laws & Regulations
All employment income in Japan is subject to federal income tax as well as the “local inhabitants tax.” The national tax rates is typically applied at comparatively progressive rates depending on the amount of income. The local inhabitants tax is applied at a flat rate that is set locally.
Because of the country’s higher tax rates, Japan has a very strong and well-regarded social security system. Japan operates within their National Universal HealthCare system. This provides all employees with health insurance, welfare pension insurance, workers’ compensation, and unemployment insurance. These benefits are granted by the Japanese government, so it is uncommon for employers in Japan to offer additional insurance benefits.
Payroll Options in Japan
Depending on the size of your company, you can choose between a two primary payroll options to find one that best fits your needs.
Option 1 – Set Up Your Own Subsidiary
Large companies will sometimes decide to handle their foreign employee payroll process on their own. In order to do this, you will be required to set up a subsidiary, register your business in China, and have a deep understanding of the country’s taxation, withholdings, benefits, and other local payroll conditions.
Option 2 – Work With an International PEO
When you work with GlobalPEO, our Payroll solutions make things easy by handling all of the administrative and HR duties with the employee. This frees up your business and foreign employees to focus all of your communications on the work itself.
How To Set Up Payroll In Japan
Before you can begin hiring foreign employees, you are legally required to either set up an entity in Japan or work with an International PEO. If you elect to do this on your own, you will need to set up a business bank account in Japan.
There are four primary ways of setting up your payroll in Japan, depending on your corporate structure:
Godo-Kaisha – Structured similarly to a LLC in the United States.
Goshi-Kaisha – A limited partnership company
Gomei Kaisha: A general partnership company.
Kabushiki – Kaisha: This is the most similar to a traditional incorporation that is available in Japan.
Entitlement & Termination Terms For Japan Payroll
Japan’s laws surrounding the termination provide a high degree of legal protection for the employees. It is extremely difficult to terminate an employee working in Japan and there are strict restrictions surrounding what is considered as a “justified termination.” In fact, a dismissal will be deemed invalid as an abuse of employee rights under the country’s local laws if it is not considered to be appropriate in general societal terms. Historically, it has been very challenging for employer’s to successfully prove a valid cause for termination in the eyes of Japan legal courts. The exceptions to this rule include employees committing crimes or violations such as theft, violence, excessive insubordination, dishonesty regarding their professional credentials, or long-term poor performance in the position.
All employees must be given at least 30 days notice of termination. This stipulation is commonly included in the “work rules” as provided by the company to the employee at the time of initial hire.
From providing quick and effective payroll solutions to creating great relationships with your foreign employees, GlobalPEO gives you a top tier International Payroll service at a value unmatched in the industry. With Japan PEO services starting at just $400 per employee, your business can enjoy the benefits of having an expert payroll team without breaking the bank.
Why Choose GlobalPEO?
Global expansion is a great step for your business – and now it’s easier than ever. Setting up your own entity in each country where you wish to operate can be expensive, complicated, and requires deep knowledge of the specific rules and regulations. Let GlobalPEO take care of everything. From International PEO & EOR, Global Payroll and International Recruiting we deliver our exceptional services at an affordable price.