Japan
Luxembourg
Exchange rates: European Central Bank reference rates, 2026-10-23. Japan: Tokyo, Kyokai Kenpo, salary paid evenly each month with no bonus, no dependants. Luxembourg: Employee in Luxembourg City, Luxembourg tax resident, local national (no inpatriate regime), single with no children (tax class 1), salary only paid evenly as monthly pay (no bonus, 13th month or benefits in kind), calendar tax year 2026. Social security on the 2026 CCSS rates: health 3.05% (benefits in kind 2.8% + cash 0.25%) and pension 8.5% each side, both capped at five times the social minimum wage, plus the employee-only dependency insurance of 1.4% on gross pay above a quarter of the minimum wage. The ceiling and the dependency abatement are annual sums of the January-May and June-December values because the index tranche of 1 June 2026 raised them. Income tax on the class 1 tariff in force since 2025 (unchanged for 2026), with the employment fund surcharge (7%; 9% above €150,000 of taxable income), the minimum flat deductions only (expenses €540, special expenses €480; no commuting deduction, i.e. living close to work) and the 2026 employee tax credit (CIS) and CO2 credit. The temporary 2026 conjunctural tax credit (CIC 2026) is not applied because its law was not yet in force at retrieval. Luxembourg has no municipal income tax.
At three salary levels
| Salary (US$ equivalent) | Japan | Luxembourg |
|---|---|---|
| $60,000 | Cost 1.14× Keeps 73% ¥9,408,202 | Cost 1.13× Keeps 76% €53,605 |
| $120,000 | Cost 1.10× Keeps 66% ¥18,816,403 | Cost 1.13× Keeps 63% €107,210 |
| $250,000 | Cost 1.05× Keeps 57% ¥39,200,840 | Cost 1.09× Keeps 57% €223,354 |
Employment rules compared
| Japan | Luxembourg | |
|---|---|---|
| Statutory annual leave | 10 days after six months, rising to 20; 5 days must be taken | 26 working days |
| Public holidays in 2026 | 18 | 11 (Luxembourg City) |
| Notice of dismissal | 30 days, or pay in lieu | Employer 2/4/6 months by service; employee half |
| Severance required by law | None | From 5 years: 1-12 months' pay by service |
| Typical negotiated exit | Commonly 3–6 months’ pay plus unused leave | No official benchmark |
| Probation | Commonly 3–6 months; dismissal still needs grounds | 2 weeks to 6 months (12 for high earners) |
| Working hours | 40 a week; overtime capped at 45 a month and 360 a year | 40 h/week, 48 h with overtime |
| How hard is dismissal? | Very hard: needs objectively reasonable grounds | Moderate: real and serious reasons, given in writing on request |
| Women in management (ILO) | 14.5% (2023) | 26.9% (2024) |
Questions
What does a US$120,000 salary cost an employer in Japan and Luxembourg?
With the rates and exchange rates as of October 2026, in Japan (Tokyo, ¥18,816,403) the employer’s total cost is 1.10 times the salary; in Luxembourg (€107,210) it is 1.13 times. The employee keeps 66% of salary in Japan and 63% in Luxembourg.
Is it cheaper to employ someone in Japan or Luxembourg?
At this salary, the employer’s on-cost is lower in Japan. The ratio changes with pay, though: where contributions are capped, the on-cost falls as a share of salary for high earners. Enter the real salary in the calculator above to compare.
How do notice and severance compare?
Japan: 30 days, or pay in lieu; no severance is required by law, and negotiated exits are commonly 3–6 months’ pay plus unused leave. Luxembourg: notice is employer 2/4/6 months by service; employee half; severance required by law: from 5 years: 1-12 months' pay by service; typical negotiated exit: no official benchmark.
Which has more paid leave and public holidays?
Japan: 10 days after six months, rising to 20; 5 days must be taken, and 18 public holidays in 2026. Luxembourg: 26 working days, and 11 public holidays in 2026.
Sources: Japan (Kyokai Kenpo, Japan Pension Service, MHLW, National Tax Agency, MIC). Luxembourg: every rate and rule is listed with its primary source on Luxembourg's HR data. Exchange rates: ECB reference rates (2026-10-23); for currencies the ECB does not quote, the central bank's rate.
Spotted an error or a newer figure? Report a correction. We check every report against the source and reply within ten business days.