Japan Payroll FAQ
Updated: Mar 9, 2021
General Payroll Questions
1. Is there any legal restriction if we wish to go live mid-year?
There is no legal restriction to go live mid year.
2. What is the payroll year in Japan?
Japan's payroll year is from January 1 to December 31.
3. Is it OK to go live mid-year? What is the best way if we have an existing payroll but wish to change providers? It is OK to go live with payroll at any time, however, if you have existing payroll, the ideal transition timeline would be:
Hand over payroll data in late December or early January
Run parallel payroll from January to March and
Go live in April
4. Is there any additional cost to go live mid-year?
Japanese labor laws require the employer to have monthly gross-to-net data. If the payroll goes live in August, JOS would need to enter January to July data into the payroll system. Data entry/recalculation is provided at a sliding scale fee.
5. What kind of software does JOS use?
Xero Accounting https://www.xero.com/ (English Only)
人事労務freee https://www.freee.co.jp/hr/ (Japanese Only)
SmartHR https://smarthr.jp/ (Japanese/English)
6. What are the steps to process monthly payroll in Japan?
1. What is required to set up a new payroll?
There are different requirements for a new company vs an existing company, please contact us for a full list and explanation of requirements.
1. What kind of information or documents does JOS need from the employee?
Please contact us for a full list of information and documents required
2. Do you need to register new hires prior to their start date with the company?
The client must submit the new hire form at least 10 days prior to the start day. It can take up to 5 days for the new hire to complete the onboarding forms. The insurance enrollment forms must be submitted within the 5 days of the hire date. i.e., if the hire date is April 1st, JOS would need to submit the enrollment forms by April 5th.
3. What kind of information/documents does JOS need when the employee is terminated?
Employee Mailing Address
Employee Phone number
Employee Personal Email address
Letter of resignation (email or signed letter)
Any additional departure documents the employee requested
Resident Tax Payment Transfer Request, tokubetsu choushu idou todoke; If the employee has the job lined up, the next employer will withhold his remaining tax balance from the new salary.
Release Letter, rishokuhyo: The employer is required to provide the release letter if he is applying for the unemployment benefit
Certificate of Employment History, taishoku shoumeisho: His next employer may request it to confirm the length of employment, job rank, duties, salary, etc.
Certificate of Social Insurance Enrolment History, hihokensha shikaku soushitsu shoumeisho; the employer is required to provide if the employee will apply for the national health insurance, national pension, or dependent coverage.
What kind of information/documents does JOS prepare if the employee is terminated?
Year-to-date wage reports, gensen choshuhyo
social insurance de-registration
labor insurance de-registration
General Payroll Processing Information
1. What are the statutory payroll reports and the deadlines?
Please contact us for a detailed breakdown
2. Is it a requirement to track work hours for payroll processing?
Yes. Japanese labor laws requires employer to track work hours and absences for all employees. JOS can provide the format.
3. Is there a standard pro-rata calculation?
With a monthly Salary of say 200,000 JPY
Using the payment Cycle April 1 - April 30
Days Off Saturday, Sunday, and Public Holidays
If the date of hire is April 19th, prorated salary is 200,000 / 21 days * 9 days = 85,714.2857
The employee shall receive 85,715 JPY (round up to the nearest integer).
Year End Processing
1. When is the deadline for year-end reports?
The deadline is January 31st of the following year.
i.e. Any wages paid between 1 January 2021 and 31 December 2021 shall be reported by 31 January 2022.
2. What is the year-end adjustment?
Nenmatsu Chosei requires the employer to calculate your income tax for the year (1 Jan – 31 Dec), and then either withhold additional tax or reimburses you for any tax you have overpaid throughout the year or are owed due to a change in status. Any tax refund or additional tax will be processed in the December paycheck. 3. What types of year-end payroll reports can JOS prepare?
Gensen Choshu hyo, year-end wage reports by a payroll specialist
Hotei Chosho, reporting of the annual salary to the local tax authority Prepared by a payroll specialist and submitted by a Zeirishi
Reporting of the annual salary to the local municipal office Prepared by a payroll specialist and submitted by a Zeirishi