A Japanese payslip is usually laid out in three blocks. Attendance shows days worked, paid leave taken, and overtime, late-night and holiday hours. Payments list base salary, each allowance and each kind of overtime premium. Deductions list health insurance, long-term care insurance for those aged 40 to 64, employees' pension, employment insurance, income tax withheld at source, and inhabitant tax, followed by any company deductions such as rent for company housing, the employee stock ownership plan or union dues. The bottom line is the amount actually paid into the bank.
The duty to issue it comes from the Income Tax Act: anyone paying salary in Japan must give the recipient a statement for each payment. Under Article 231(2), payslips delivered from 1 January 2007 onwards can be issued electronically instead, provided the employee has agreed in advance. The Labour Standards Act adds the wage payment rules behind it: pay must be made in full, directly to the employee, at least monthly on a fixed date, and deductions other than tax and social insurance need a written labour-management agreement. Since 1 April 2023, wages can also be paid into an account with a fund-transfer provider designated by the Minister of Health, Labour and Welfare, which must cap the balance at 1 million yen. It needs a labour-management agreement and each employee's individual consent.
Bonuses get their own payslip, and so does the year-end tax adjustment in December, which often shows a refund. Separately, every January the employer issues an annual withholding statement summarising the year's pay and tax.
What it means for a foreign employer
- Payslips are the best evidence of current pay. Japanese candidates expect to be asked for recent payslips or their annual withholding statement before an offer is final. Ask with consent and handle them as personal data.
- Read the allowance lines. The payslip shows what the candidate's base salary leaves out: position, family, housing and overtime pay.
- Deductions need an agreement. Deducting anything other than tax and social insurance, including company housing rent, requires a written labour-management agreement.
- Your payroll provider needs local formats. Global payroll templates often omit the attendance block or the separate overtime items that Japanese staff and labour inspectors expect to see.
Sources
- Income Tax Act, Article 231 (payslips; electronic delivery with consent under paragraph 2).
- National Tax Agency, Q&A on electronic delivery of withholding statements and payslips.
- Labour Standards Act, Article 24 (wage payment), and Enforcement Regulations, Article 7-2 (digital wage payment, from 1 April 2023).
- Ministry of Health, Labour and Welfare, wage payment into fund-transfer provider accounts (digital wage payment).