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The Land of the Rising Sun is one of the world’s foremost economic powerhouses. Its position as a gateway to Asia and proximity to the Chinese and South Korean economies make it an ideal place to position your business. Today, Japan is the world’s fourth-largest economy, behind the U.S., China, and Germany.
With a GDP of $4.2 trillion, as of 2023, the weakness of the Yen and its strong economic credentials combine to make Japan a popular location for businesses.
On the other hand, foreign businesses quickly find that they come up against an array of labor rules and regulations that can make compliance complex. That’s why teaming up with a Japan Employer of Record (EOR) is an ideal way of gaining a highly talented workforce without worrying about compliance.
In this guide, we discuss the top EORs in Japan and some of the rules and regulations governing labor relations within the country.
A Japan Employer of Record is a third-party that acts as the legal employer for your personnel in Japan. You manage the day-to-day job of assigning tasks and performance management, whereas your EOR manages functions like:
In other words, you retain operational control of your workers in a system that’s highly rules-dense. In particular, your EOR supports you in keeping up with the provisions of the Labor Standards Act, which is one of the primary pieces of legislation governing labor relations throughout the country.
Working with an EOR provides obvious benefits for foreign businesses looking to establish a presence in the country. However, selecting the best one is far from easy, since there are so many providers offering EOR services in Japan.
We’ve scoured the industry to learn more about some of the leading players to provide a round-up of the top six Japan EOR companies. Naturally, each company will excel in different areas. Here’s our shortlist for the best EORs in Japan.
With that in mind, here are some more in-depth insights into each of these Japan EOR companies and what they bring to the table.
Remote People is our top pick for its focus on compliance and all-around performance, which is the biggest headache foreign businesses have in Japan. They provide services like localized contracts, social insurance enrollment, and payroll setup.
When working with Remote People, you’ll receive practical guidance on dealing with various issues like time tracking, probationary clauses, and annual leave accrual. They also provide playbooks to help you cover issues like workplace etiquette, which is another of the biggest issues in Japan.
To learn more, check out our full Remote People review.
| Pros | Cons |
|---|---|
| Japan-specific documentation and onboarding checklists. | Not the most substantial global footprint compared to their competitors. |
| Hands-on support from the professionals. | May be more “white glove” than many businesses need. |
| Playbooks for handling etiquette issues. |
Deel is a platform that favors polished onboarding, a wide range of integrations as part of its self-serve platform, and transparent EOR pricing. Typically, Deel markets prices of $599 per employee per month on a global scale.
Additionally, Deel makes it simple to tie your Japanese operations into other global locations, with its workflows easily connected with any other locations in your multi-country program.
For more information, read our comprehensive Deel review.
| Pros | Cons |
|---|---|
| Clean UX. | Focus on self-service, rather than a boutique service. |
| Extensive integrations for a personalized experience. | Japan nuances may require more in-depth advisory to maintain compliance. |
| Quick deployment. |
At an enterprise level, G-P excels in its ability to handle governance and compliance across over 180 countries. Companies looking to standardize their controls on a global level while still incorporating those critical in-country nuances will find G-P is an excellent partner.
Moreover, G-P includes its very own “Globalpedia” service, helping stakeholders to learn the ins and outs of workplace etiquette and the various nuances of compliance.
| Pros | Cons |
|---|---|
| Strong compliance reputation. | Opaque pricing tends to be on the higher side. |
| Dedicated implementation managers for complex operations. | Unsuitable for smaller cohorts. |
| Highly suited for enterprise businesses. |
Global payroll and payments are often one of the biggest challenges businesses face when dealing with operations covering multiple jurisdictions. At Papaya Global, they emphasize global payroll and payments handling for companies looking at multi-country payroll consolidation.
One of their standout features is their data layer, consisting of an array of dashboards and analytical tools. This emphasis on data analysis supports finance teams in modeling total employment costs, factoring in issues like variable social insurance rates per prefecture and age-banded care.
If you’re ready to learn more about them, read our Papaya Global review now.
| Pros | Cons |
|---|---|
| Strong payments infrastructure. | Less effective with Japan-specific edge cases. |
| Ideal for CFOs wanting visibility across global regions. | Less comprehensive HR features. |
| Highly advanced analytical tools. |
Every business owner must factor in the risks of non-compliance when moving into new markets. With Oyster HR, you’re working with a company that focuses on risk and compliance tooling through a streamlined UX. It’s highly effective for benefits benchmarking and ensures that you’re not found wanting on the risk management front.
It’s also a tech-first EOR, prioritizing the needs of smaller HR teams. Many of its employee engagement tools and workflows are automated, allowing you to save time and redirect your resources elsewhere.
If you want to learn more about them, read our Oyster HR review.
| Pros | Cons |
|---|---|
| Strong risk posture. | Relatively high costs compared to other providers. |
| Ideal for managing benefits to attract leading talent. | Reliance on third-party partners. |
| Automated tools to manage employee relationships. |
Dealing with the nuances of Japanese law and employment relationships is where Safeguard Global comes in. Where other providers offer generalized advice, this EOR provider offers high-touch advisory to help you deal with nuanced questions, including establishing special overtime agreements and structuring discretionary bonuses.
With Safeguard Global, you’re getting 24/7 coverage with fully guided onboarding. This ensures you can get up and running as quickly as possible while having the peace of mind of knowing you’re in full compliance with current Japanese laws.
If you’re interested in learning more, read our Safeguard Global review now.
| Pros | Cons |
|---|---|
| Consultative approach to business. | Complex initial setup. |
| Flexible support model. | Opaque pricing structure. |
| Extra services for transition management. |
Working with a Japan EOR offers a range of benefits vs. attempting to start your own business entity and managing HR and payroll by yourself. Some of the tangible business benefits of turning to an experienced Japanese EOR include:
Although the EOR model might not be for everybody, it’s an increasingly popular option for companies looking to break into the Japanese market. Assess your business’s needs and goals before deciding whether an EOR makes sense for you.
And if you do decide that you want a more permanent setup later, such as if your Japanese operation is a success, you’re more than entitled to migrate to a formal entity later. This also allows you to transition from your EOR being the legal employer to yourself being the legal employer.
Japanese labor law is incredibly rules-dense. In a system where you probably don’t understand the local language, this can create enormous issues from a compliance and risk management perspective.
Let’s discuss some of the biggest issues you’ll have to consider when launching your next business venture in the Land of the Rising Sun.
Written employment contracts are mandatory in Japan as standard. Whenever you hire local workers, you’ll need a standardized contract written in the Japanese language. This applies even if you’re using English operationally.
All employment contracts are required to include various pieces of information by law, including job role, location, hours, pay, notice, probation, and any bonuses or allowances you might choose to provide. Due to the language barrier, most EORs will provide both English and Japanese contracts to avoid any future misunderstandings.
Due to concerns regarding welfare, the Japanese government has passed laws to limit the number of hours employees can be required to work each week. Per the Ministry of Health, Labour, and Welfare, the statutory limits on working hours are 40 hours per week and no more than eight hours per day.
Some exceptions exist to this rule, but any hours worked beyond the statutory working week must be paid as overtime. Although each company will choose how much to offer for overtime hours, standard premiums are:
It should also be noted that night work premiums apply. Furthermore, the Work-Style Reform has triggered yearly overtime caps. Today, workers should work no more than 720 overtime hours per year, or more than 100 overtime hours per month.
Before employees can work any form of paid overtime, employers are required to submit a Notification of Agreement on Overtime and Work on Days Off form to their local labor standards office. Failure to do this can command fines of up to 300,000 Yen and/or up to six months of imprisonment.
Japan doesn’t have a formal national minimum wage. Instead, the minimum wage is set at the prefecture level. Across Japan, the average minimum wage is ¥1,121 per hour in 2025. As of October 2025, Okinawa had the lowest minimum wage of ¥1,023, with Tokyo having the highest of ¥1,226.
Another quirk to remember is that industries can also have their own minimum wages. If the industry minimum wage is higher than the prefecture minimum wage, the higher of the two numbers applies.
It’s essential that you double-check the current rate for your prefecture and industry at the time of hiring to avoid any accidental non-compliance, as this can trigger steep financial penalties and back payments. This is especially important if you plan on working across multiple prefectures.
Employee benefits are designed to attract leading talent, but they’re also a part of the workplace culture across the Land of the Rising Sun. In Japan, certain employee benefits are compulsory under the law, whereas others are common due to cultural reasons.
In terms of compulsory benefits, enrollment in Employees’ Health Insurance (EHI) and Employees’ Pension (EPI) is required for all eligible employees. On the other hand, common and customary benefits include:
Understand that although many benefits aren’t required to be paid under the law, the benefit system has a strong cultural emphasis due to a belief in collective well-being. Japanese workers expect that their employers will pay comprehensive benefits beyond the legal minimums.
In other words, foreign businesses should factor in these extra costs, or it could become tough to attract leading Japanese talent.
Employers are required to withhold income taxes from their employees’ paychecks. Additionally, employers are obligated to make social security contributions to cover EPI and EHI entitlements.
Like the minimum wage, actual contribution rates vary by both the prefecture and industry. These may change periodically, and it’s up to you and your EOR to keep up with these changes.
Right now, employer contributions include:
Certain employers may also have to pay a small child or family allowance levy. Double-check whether this applies to you.
It’s also worth mentioning that industry class doesn’t apply to the company but to the employee. Due to this issue, two employees on the same salary could come with varying on-costs, which is why managing payroll can be so complex.
Employee protections are substantial in Japan, with no at-will termination possible. Employers are obligated to provide a reason that is not only objectively reasonable but also socially acceptable. Failing to abide by this rule can result in significant financial penalties. Japanese courts also have the power to reinstate employees who were wrongfully terminated.
If you intend to terminate an employee, you’re required to provide 30 days of notice. You may choose to skip this notice period, but you’ll be required to provide payment in lieu of notice. This is also the only form of severance pay that’s legally required and is commonly used to move employees out quickly.
Note that severance pay must still be paid to a terminated employee if there’s a severance clause within their original employment contract.
Hiring foreign workers in Japan has traditionally been difficult as the country has displayed a high degree of protectionism over its economy. However, the situation has eased in recent years, as skills shortages have emerged. In any case, hiring foreign workers can still be complex, unless they’re especially skilled.
According to the Ministry of Foreign Affairs of Japan, foreign hires require a working visa and a Certificate of Eligibility issued to them in Japan. This is another area where your EOR can provide support and guidance, as the immigration system can be complicated to manage.
Another issue to remember is that Japanese immigration law requires foreign workers to have the appropriate academic and work history to be eligible for a work visa. Typically, a foreigner must be able to prove that the degree they majored in at university pertains to the position they are being hired for. In the absence of a relevant university degree, over 10 years of work experience is required.
If a foreign worker doesn’t fulfill these requirements, they will be automatically ineligible for a work visa, even if they already have an offer of employment.
Japan is a prime example of a high-value yet rules-intensive market. Foreign operations moving into this country for the first time face a mountain of bureaucracy, providing not just immigration challenges but also HR and payroll. In particular, although certain rights and workflows will seem familiar, others will feel alien to you, which is why having an EOR on your side is so valuable.
Working with an EOR in Japan is a chance to outsource these compliance headaches and allow you to focus on growing your firm within the country. If you’re looking for help and support in managing a challenging market, contact us to speak to a RemotePad global hiring expert.
Not at all. Some EORs will only agree to become the legal employer for your hire after you’ve already sourced them. Others may provide recruitment services as an optional extra, or they may have partnerships with third-party recruiters to help you acquire talent. This is why it’s critical to investigate what type of recruitment service (if any) is available when teaming up with an EOR.
EOR services in Japan vary wildly in price because of the various services each one offers. The right price to pay depends on your budget and what you need from them. Some firms only need extremely basic services, whereas others require ancillary services to help them manage teams on a large scale.
The answer is to assess what your business needs and then align your shortlist with those needs. Additionally, bear in mind that most EORs provide bespoke pricing, so you’ll usually need to get in touch with them for a quote first.
