Employee Allowances in Japan

Any employees who are working in Japan are entitled to these allowances. As compared to overseas, Japanese companies are known for providing adequate employee benefits as well as salaries. The employees do not have to be Japanese as foreign talents or permanent residence of Japan can also receive the same allowances. However, this is also depending on the company’s policies. In this article, we would further explain the common allowances you are able to receive provided by Japanese companies.

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Common Employee Allowances in Japan

It is especially common for companies to provide their employees with allowances. Here are some allowances you should know:

Transportation Allowance

Often, employees will pay for their transportation expenses to work. Whereas in Japan, most companies will provide the transportation allowance for their employees. This is due to the long travelling distance in Tokyo where it can be expensive for employees to bear the cost. As a result, many Japanese companies provide transportation allowance for full-time employees as some might have to travel for an hour or two to reach their workplace. Most of the Japanese companies will reimburse the full amount while others will reimburse a portion of the allowance.

It is not mandatory for Japanese companies to provide transportation allowance for employees however offering such reimbursements can attract more talents to join the company with this benefit.

Overtime Allowance

Companies will have to provide overtime pay for employees if they worked over 40 hours per week unless they are working for a management position. Companies that require their employees to work overtime on a regular basis have to mention this requirement on the written agreement so that employees are aware. 

Housing Allowance

This allowance is meant for employees who have to transfer to other countries and required them to stay for some time. Most of the industries will usually provide a housing allowance for their employees and will pay a down payment of 20% to 30% of the monthly rent. Therefore, the employees can utilize this allowance to loan a house or apartment temporary during their stay in the country to which they have been assigned. 

Retirement Allowance

Employees aged 60 and above who are working in Japan are entitled to a retirement allowance. The retirement allowance is mainly used to provide monetary support for retirees who have contributed to the company success for many years.  The retirement allowance can either be a fixed amount or a life-long pension. Most Japanese companies provide a fixed amount as compared to the life-long pension as this was practised traditionally.

Typically, the company will pay around 1,000,000 yen to 25,000,000 yen or above depending on the duration the employee has worked for the company, the employee’s performance as well as the company size.

Family Allowance

In Japan, besides providing the usual maternity leave or childcare leave. Employees are also supported by the family allowance. This allowance is meant for the employee who has financial difficulties in providing for their family can be entitled to this allowance. The amount given to the employees depends on the number of family members they have.  The spouse will be entitled to 10,000 yen while the child will be entitled to 20,000 yen. On average the amount given is typically 15,000 yen to 20,000 yen.

Self-Development Allowance

In Japan, companies are also supporting employees in terms of proving allowance for self-development activities. These include attending courses or seminars, overseas training and experience as well as subsidies for additional further studies. 

This allowance is extremely beneficial for the employees as they are able to get subsidies from the company while pursuing their own interest or courses which will benefit their career and skills-set in the future.

Other Special Allowances in Japan

Besides the common allowances provided by the Japanese companies, here are some of the special allowances which you might not have heard of:

  • Marriage allowance
  • Birth of employee’s child allowance
  • Congratulatory money for employees' children entering school or coming of age
  • Disaster relief allowance etc.

Summary

In summary, employees working in Japan are entitled to various common and special allowances in which overseas companies do not provide. There are mandatory and optional allowances that Japanese companies have to offer. If you are planning to start your career or even starting a business in Japan, these are some of the allowance provided to you when you work in Japan.

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