The family allowance comes from the postwar idea of a breadwinner wage: pay should rise when a man takes on a wife and children. It is usually paid for a spouse with income below a set ceiling, often tied to the tax or social insurance income thresholds, and a flat amount per child. In the Ministry of Health, Labour and Welfare's 2020 survey, covering pay for November 2019, 68.6% of companies paid a family or dependants' allowance, and recipients averaged 17,600 yen a month.
The spouse element is in retreat. Because it stops when the spouse earns above a threshold, it discourages second earners from working more, which runs against government policy on women's employment. Toyota began phasing out its spouse allowance in 2016 and raised the child allowance in its place. Following the National Personnel Authority's 2024 recommendation, national civil servants' spouse allowance is being cut in stages and ends in fiscal 2026, while the child allowance rises to 13,000 yen a month. Many private employers take their cue from civil service pay, so further changes are likely.
Family allowances matter for equal treatment as well. In the Japan Post cases of October 2020, the Supreme Court held that denying a dependants' allowance to contract staff with long, continuing service was an unreasonable difference. Family allowances based on the number of dependants can be excluded from the overtime base, and they are left out of the minimum wage calculation.
What it means for a foreign employer
- A candidate with a family may lose real money. A mid-career hire with a spouse and two children at a traditional employer could be receiving tens of thousands of yen a month in family allowances. A base-only offer has to absorb that.
- Do not replicate the spouse element. If you want a family benefit, a child-linked allowance or a broader benefit is easier to defend and aligned with where the market is going.
- Apply it consistently. If you pay it to permanent staff, assess whether long-serving contract staff in comparable roles should receive it too.
Sources
- Ministry of Health, Labour and Welfare, General Survey on Working Conditions 2020 (pay for November 2019).
- National Personnel Authority, pay recommendation, August 2024.
- Supreme Court, Japan Post cases, 15 October 2020.
- Labour Standards Act, Article 37(5); Minimum Wage Act, Article 4(3).