Payroll in Japan 2026: withholding, shakai hoken and payslips

In Japan the employer withholds income tax every month using the National Tax Agency's tables, deducts resident tax for the employee's municipality and the employee's half of health insurance, pension and employment insurance, about 15% of pay in Tokyo. On top of salary the employer pays a similar 15%, plus workers' accident insurance at its industry rate.

Payroll in Japan at a glance

Social insurance contributions

Health insurance, pension and the new child support contribution are charged on the employee's standard monthly remuneration (標準報酬月額), a grade that rounds the monthly pay: the ¥300,000 grade covers pay from ¥290,000 to ¥310,000. Health insurance grades run from ¥58,000 to ¥1,390,000 and pension grades from ¥88,000 to ¥650,000, so pension stops rising above ¥650,000. Employment insurance is charged on the actual wages paid.

Health insurance rates differ by prefecture. The Kyokai Kenpo rates for FY2026 apply from the March 2026 contributions (paid in April): 9.85% in Tokyo (down from 9.91%), from 9.21% in Niigata to 10.55% in Saga. If your company belongs to a corporate health insurance society (kenkō hoken kumiai), its own rate applies instead.

The child and child-rearing support contribution is new. Kyokai Kenpo collects 0.23% from the April 2026 contributions (paid in May), on top of health insurance and split like it.

Employment insurance fell in FY2026. From April 2026 the general rate is 13.5 per 1,000 (0.5% employee, 0.85% employer), down from 14.5 per 1,000. Agriculture, forestry, fisheries and sake brewing pay 0.6% and 0.95%, construction 0.6% and 1.05%.

Income tax and resident tax

Monthly withholding with the NTA tables

The employer looks up each month's tax in the NTA's 2026 withholding tax table for monthly pay (給与所得の源泉徴収税額表), using the pay after social insurance and the number of dependants the employee declared on the dependants declaration (扶養控除等申告書). The tables changed in 2026 because the FY2025 tax reform revised the basic deduction, so tables for 2025 must not be used for 2026 pay. The amounts already include the 2.1% special reconstruction income tax.

The tables are built on the annual income tax rates:

The special reconstruction income tax adds 2.1% of the income tax for each year up to 2037. From 1 January 2027 it falls to 1.1% and a special defence income tax of 1% is withheld alongside it, and the NTA has published new tables for 2027 that also reflect the higher basic deduction of the FY2026 tax reform.

Year-end adjustment

At the end of the year the employer recalculates the tax on the whole year's salary for each employee who filed the dependants declaration, and refunds or collects the difference against what was withheld (年末調整). Employees paid more than ¥20 million a year are excluded.

Resident tax

Resident tax is 10% of the previous year's income (6% municipal and 4% prefectural) plus a per capita levy of ¥4,000 and the ¥1,000 forest environment tax. The municipality calculates it and sends the employer the amounts to deduct from pay from June to the following May. Someone with no income in Japan in the previous year, such as a new graduate, has no resident tax to deduct in their first year.

Minimum wage, working time and overtime pay

Japan sets regional minimum wages by prefecture each year. The FY2026 rates take effect between 1 October and December 2026, depending on the prefecture:

The Labour Standards Act requires premiums for work outside normal hours:

• overtime: at least 25%, and at least 50% for overtime beyond 60 hours a month
• work on statutory holidays: at least 35%
• late-night work (10 p.m. to 5 a.m.): at least 25%

Wages must be paid at least once a month on a fixed date.

Monthly payroll calendar and filings

1. 1Every pay day: deduct social insurance, income tax from the table and the resident tax instalment.
2. 2By the 10th of the following month: pay the income tax withheld. Employers that regularly have fewer than 10 employees can apply to their tax office to pay twice a year instead: January to June by 10 July, July to December by 20 January.
3. 3By the end of the following month: health insurance, pension and child support contributions for the month are paid (the March 2026 contributions were due on 30 April 2026).
4. 4Every month: pay the resident tax deducted to each municipality.
5. 5December: carry out the year-end adjustment with the last pay of the year.
6. 6By 31 January: give each employee their withholding slip (源泉徴収票) and file the slips that meet the thresholds with the tax office. From 1 January 2027 filing the salary payment report with the municipality counts as filing with the tax office.

Keep a wage ledger (賃金台帳) for each workplace, updated every pay day. The Labour Standards Act requires records to be kept for five years, read as three years for the time being.

Worked example: ¥300,000 a month in Tokyo

A single employee under 40 with no dependants, enrolled in Kyokai Kenpo Tokyo, earns ¥300,000 a month (standard monthly remuneration ¥300,000) in a general business, in May 2026 or later. Resident tax is left out because it depends on the previous year's income.

The pay after social insurance of ¥255,930 falls in the table row for ¥254,000 to ¥257,000, where the tax for an employee with no dependants is ¥6,320. Add workers' accident insurance at your industry's rate. From the month the employee turns 40, nursing care insurance adds ¥2,430 on each side.

Common mistakes

1. 1Using last year's withholding table. The 2026 tables changed with the basic deduction; the 2027 tables change again with the reconstruction and defence taxes.
2. 2Applying another prefecture's health insurance rate, or Kyokai Kenpo's rate when the company belongs to a health insurance society.
3. 3Forgetting the child and child-rearing support contribution that started with the April 2026 contributions.
4. 4Not switching on nursing care insurance in the month an employee turns 40.
5. 5Missing the new minimum wage date for your prefecture between October and December 2026.
6. 6Paying overtime at 25% beyond 60 hours a month, where at least 50% is due.

How Clientlly helps

Clientlly does not ship a built-in payroll profile for Japan. An administrator enters the rates once in the payroll tax settings: the income-tax bands, the personal allowance, the employee and employer contribution rates (health insurance for your prefecture, pension, employment insurance and the child support contribution) and the minimum wage. Clientlly then calculates gross to net and the employer contributions and produces payslips. Japan's monthly income tax comes from the NTA tables, so compare the tax on each payslip with the table for the employee's dependants.

Around payroll, Clientlly handles leave requests and approvals with a shared leave calendar, attendance and overtime tracking with attendance and time tracking, and HR documents for each employee. See all human resources features, or compare plans on the pricing page.