What must an employer set up before hiring staff in Japan?
An employer hiring staff in Japan must register for labour insurance and, for most companies, social insurance covering health and pension coverage, which are jointly administered by the relevant ministries. Employment terms are also subject to labour standards set under Japanese law.
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How it works
Labour insurance covers workers' accident compensation and employment insurance, while social insurance covers health insurance and employee pension, and enrolment is generally mandatory once a company has employees meeting set conditions. Employers withhold contributions from salary alongside income tax, and both employer and employee contributions are paid to the relevant authorities.
Commonly mixed up with
Social insurance enrolment is sometimes assumed to be optional for very small companies. Enrolment generally becomes mandatory once employment conditions are met, regardless of company size.
What must an employer set up before hiring staff in Japan?
| Knowledge, Tokyo | Business and finance |
|---|---|
| Short answer | An employer hiring staff in Japan must register for labour insurance and, for most companies, social insurance covering health and pension coverage, which are jointly administered by the relevant ministries. Employment terms are also subject to labour standards set under Japanese law. |
| How it works | Labour insurance covers workers' accident compensation and employment insurance, while social insurance covers health insurance and employee pension, and enrolment is generally mandatory once a company has employees meeting set conditions. Employers withhold contributions from salary alongside income tax, and both employer and employee contributions are paid to the relevant authorities. |
| Commonly mixed up with | Social insurance enrolment is sometimes assumed to be optional for very small companies. Enrolment generally becomes mandatory once employment conditions are met, regardless of company size. |
| Last reviewed | 2026-08-08 |
Short questions
- Is social insurance mandatory for all employers?
- It is generally mandatory once employees meet the conditions set by the relevant authority.
- What does labour insurance cover?
- It covers workers' accident compensation and employment insurance.
- Are contributions shared between employer and employee?
- Yes, both employer and employee generally contribute to social insurance.
- Does a foreign employer need a Japanese entity to hire?
- Hiring generally requires an established presence in Japan, such as a branch or subsidiary.
- Where is employer guidance published?
- The Ministry of Health, Labour and Welfare publishes employer guidance.
Sources
More in this track
- What is the difference between a KK and a GK company in Japan?
- What are the main steps to incorporate a company in Japan?
- Should a foreign company open a branch or a subsidiary in Japan?
- When does a business have to register for Japanese consumption tax?
- How does corporate tax work for a company in Japan?
- What is Japan's qualified invoice system for consumption tax?
- What support exists for foreign companies investing in Japan?
- What should a new business know about office space in Tokyo?
- What business support does the Tokyo Metropolitan Government provide?
These pages explain how the rules work and link the authority that owns them. They are not legal, tax or immigration advice, and amounts and thresholds change, so open the source before you act.
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