[Updated April 24, 2024] Japan has a mixed economy, with the two largest areas being services making up 70%, and Industry, 28%. The GDP per capita is $39,312 (2021), although there is a significant shift from full-time to part-time employment. Other than holiday, pension, health insurance, nursing care, unemployment benefits, and certain maternity and paternity benefits, all benefits are at the employer’s discretion in Japan. The cost of benefits is determined by a number of factors, such as the level of benefits provided, but also the demographics of the workforce covered, such as age, gender, occupation and salary.

Asinta Partner
Simon Wallington

Cornes & Company

More Info

Mandatory employee benefits in Japan include retirement, several types of disability pensions, workers’ compensation and unemployment insurance, healthcare, long-term care, paid leaves, and contribution to the longevity healthcare system. Common supplementary employee benefits include life, personal accident, long-term disability, medical top-up, annual health checks, condolence benefits, housing, commuting, and family allowances. Common perks include food service, discounts on education and entertainment, and flextime.

Mandatory Employee Benefits in Japan


Regular employees are classified into the TYPE 2 Insureds regarding the Japanese public pension insurance system. Employees working shorter times at big companies have also been included in the category. The TYPE 2 Insureds shall be covered by the Employees’ Pension Insurance plan (KOSEI NENKIN, in Japanese). The premiums are calculated simply based on the salary amount. The enrollment procedures are settled by the employers. Half of the premiums are borne by the employer, and the other half by the employee. The pension benefit amount from the Employees’ Pension Insurance for the respective insureds varies, according to the premiums amount they have contributed. This variation is a major difference from the National Pension Insurance plan. In addition, the pension amount shall be larger than the basic pension amount paid from the National Pension Insurance Plan.

Old-Age Pension Benefit

Eligibility – Participants become eligible for the old-age pension benefit at age 65. A minimum participation period of 10 years to the National Pension is required.

Disability Pension

Eligibility – If a participant becomes disabled due to sickness or injury, a disability benefit will be paid. Disability is categorized into three classes, depending on its seriousness. A participant cannot receive the benefit if he/she did not pay contributions for one-third or more of one’s previous participation period.

The three classes of disability include:

  • Class 1: Total disability requiring constant attendance
  • Class 2: Degree of disability restricting one’s ability to live independently
  • Class 3: Degree of disability restricting one’s ability to work

Survivors’ Pension

Eligibility – If a participant with an eligible dependent dies, the dependent will receive a survivor’s pension. If a participant did not pay contributions for one-third or more of his or her previous participation period, the survivors’ pension will not be paid.

Labor Insurance (Workers’ Compensation and Employment Insurance)

Administration – Administered by the government.

Coverage – Almost all employers must have workers’ compensation to cover their employees, whether full-time or part-time. Directors of the company are generally excluded from the coverage, and a separate personal Accident policy is usually recommended in such cases.

Workers’ compensation insurance provides for medical care, loss of income, disability, or death of an employee due to occupational causes or accidents during the commute.

Unemployment Insurance

Administration – Administered by the government.

Coverage—Employment insurance covers basically all employees and provides an allowance in case of unemployment. Temporary workers who work more than 20 hours a week and plan to work more than 31 days are included. Company directors are generally excluded from the coverage. An expatriate who is planning to return to his or her home country after termination of employment in Japan may be excluded from coverage.

Health Insurance

All residents of Japan are eligible for health insurance. There are two major health insurance provisions:

  • The local government manages National Health Insurance, mainly for the self-employed, retired individuals, and their dependents.
  • Health Insurance for Employees, which is for employees and their dependents, is managed by either the Japan Health Insurance Association or health insurance societies set up by larger companies or specific industries.

Eligibility – As a general rule, employers with one or more employees are required to have health insurance. All full-time employees will be covered and become participants. Part-time workers are also included if their working time is more than three-quarters of the time worked by full-time employees.

Health insurance covers non-occupational sickness or injuries of participants and their dependents. Occupational sickness or injuries are covered by workers’ compensation.

  • Basic coverage for participants and their dependents – In the event of sickness or injury due to non-occupational causes, the participant is entitled to receive necessary medical care, such as medical consultation, supply of medicines, medical treatments, surgery, and hospitalization. 70% of such medical care expenses will be covered by health insurance. Participants are required to pay 30% of the medical care expenses. Medical care benefits are also provided for dependents. The benefits cover 70% of medical care expenses.
  • Benefits for high-cost medical care—If the out-of-pocket medical expense in a particular month exceeds a certain limit, health insurance will reimburse the excess amount.
  • When a participant cannot work due to the necessity of medical treatment and loses his/her remuneration, an amount equivalent to two-thirds of the standard daily remuneration will be paid per day for up to 18 months after a three-day waiting period.

National Health Insurance

National health insurance offers benefits similar to those of health insurance for employees. People not covered by another scheme must join the national health insurance system. The coverage level is 70% of medical care expenses. The contribution amount is determined by each local government, usually based on total income and the number of persons in each household.

Long-Term Care Insurance

With the impending problem of an aged society and an expected increase in demand for nursing and medical care for the aged, long-term care insurance started in Japan on April 1, 2000.

Insured – All individuals age 40 or older are required to have long-term care insurance.

Individuals aged 65 and over are Class 1 insureds, and those aged 40 to 64 are Class 2 insureds.

The insured is able to receive long-term care services such as home-visit services by care attendants or care services at nursing homes. However, those who would like to receive these services should be registered as truly needing these services for support.

Longevity Healthcare System

The Longevity Healthcare System (Healthcare System for Later-Stage Elderly Persons) was established through reforms to the national healthcare system as an easy-to-understand system for providing healthcare tailored to the physical and mental needs of elderly persons aged 75 years or older and for enabling the entire population to support the cost of providing such healthcare with a view to maintaining a system of insurance that can benefit everyone for many years to come.

All people insured under the National Health Insurance plan or an employee’s health insurance plan, as well as their dependents, shall become insured under the Longevity Healthcare System (Healthcare System for Later-Stage Elderly Persons) once they turn 75 years of age.

Also, people between 65 to 75 years of age who are recognized by wide area associations as suffering from specific disabilities are included. (A person is considered to be eligible from the date on which he or she is recognized as suffering from a specific disability.)

Paid Leave

Paid leave is given to workers who have worked for 6 months continuously from the date of hire and have worked 80% or more of all working days. The minimum number of paid leave days is 10 days. Employees can take 10 days of paid leave in succession or in splits, but it is mandatory to take paid leave for at least 5 days a year.

Maternity Leave

Before childbirth, the leave allowance is 6 weeks prior to the expected date of birth (14 weeks for twins or more), and after maternity, the period is 8 weeks from the day after delivery. For both before and after childbirth, salary payments during leave are not stipulated by law and are subject to each company’s collective agreements and employment rules. The maternity allowance (approx. 67% of salary) is paid if you have health insurance at your workplace and you are not paid during maternity leave. If the salary is fully paid during maternity leave, no allowance will be paid. However, the difference will be paid if the salary during maternity leave falls below 67% of the standard monthly salary (daily salary).

Caregiver Leave

Employees can take caregiver leave to provide nursing care to a direct family member who has a condition requiring constant nursing care for a period specified by the Ministry of Health, Labor, and Welfare Ordinance. Reasons include injury, sickness, or physical or mental disability. Employees can get up to 93 days off for each family member who needs nursing care. This leave can be taken up to 3 times. It is not 93 days in a year, but in the aggregate for the period they work for their employer.

Childcare Leave

Employees may take childcare leave upon applying to their employer if the child he or she takes care of is less than one year of age. Generally, childcare leave can be taken until the child is 1 year old (up to the day before his/her birthday), but it can be extended to 2 years old.


Supplemental Employee Benefits in Japan

Group Life Insurance

A standard employee benefit is a provision to pay a lump sum benefit in the event of an employee’s death. Most companies have group life insurance to cover employees for that purpose. Benefits may be a flat amount for all, or some may be determined by rank or by seniority. Almost all foreign companies operating in Japan opt for a multiple of the employee’s salary.

Group Personal Accident

Payable in the event of death or permanent disability and can be extended to include medical costs associated with hospitalization and outpatient costs.

Group Long-Term Disability Insurance

Payable monthly for insured who are in long-term hospitalization or during long-term unemployment due to injury and/or disease.

Group Medical Top-Up Insurance

Daily allowance for in-patient care due to injury and/or disease and surgery allowance in a lump sum is applied.

Housing Allowance

The company bears part of the rent and repayment of the home loan. The average subsidy is JPY10,000 to JPY20,000 yen a month.

Commuting Allowance

The company bears part or all of its employees’ commuting costs.

Family Allowance

The company will provide an allowance as a living aid if the employee has dependents. The benefit amount depends on the company and is not decided by law. Over 76% of companies provide family allowances. The average amounts are:

  • Allowance for spouse: 10,000 yen to 15,000 yen per month
  • Allowance for children: About 3,000 yen to 5,000 yen per month

Medical/Health Check

The company will normally pay the basic cost for an annual medical examination. It is also the company’s duty to arrange for an annual stress check survey on all employees if the company employs over 50 staff.


Cash will be provided by the company, such as wedding gifts, birth gifts, injury and illness, condolence money, etc. More than 85% of companies have introduced Condolence benefits.



Dietary assistance

The employee cafeteria is costly, and the hurdles to introducing it are high. Recently, services other than the employee cafeteria have been introduced, and many can be started at a lower cost. The stand-alone company food service has a dedicated refrigerator installed in the office, so that side dishes and rice are always available. Employees can purchase from JPY100 per item, and there is a rich lineup of main dishes ranging from hamburger steaks and grilled fish to side dishes such as pickles and simmered dishes.

Outsourcing benefit

There are two types of outsourcing benefits, ‘Package Service’ and ‘Cafeteria Plan.’ With ‘Package Service,’ employees can use services that they have affiliated with in a flat-rate system. On the other hand, with the ‘Cafeteria Plan,’ employees receive subsidies (points), and can select and use services within those subsidies (points). The benefits depend on the outsourcing company with discounts that range from tickets for theme parks, sports, music, and movies, to shopping benefits, discounts on massages and sports clubs, or use of facilities such as counseling and health checkups. Free English lessons, bookkeeping courses, housekeeping services, babysitting, and discounts for childcare can also be part of these benefits.

Group benefit pools

More and more companies are signing up with suppliers who provide significant discounts on shopping, petrol, movie tickets, travel, and leisure activities. The more employers in the pool, the better the scale to negotiate the discounts.

Flextime system

Employees can work by deciding the start and end times of work each day so long as they work for a set minimum number of hours per month, and more and more companies are introducing this system.

Related Government Websites

Ministry of Health, Labour and Welfare


This information about employee benefits in Japan is provided by Cornes & Company, Asinta’s employee benefits consulting Partner in Japan.

Nothing on this country page is intended to be legal, financial, or tax advice, and readers are advised to consult with their appropriate advisors regarding any legal, financial, or tax implications this information may address.

Asinta Knowledge

Japan's Employee Benefits News for Q2 2024

As provided by Cornes, Japan’s employee benefits news for Q2 2024 includes information about new terms of employment, increases in in-kind benefits for meals, new... Read More

Japan's Public Medical Insurance Covers Wegovy

It has been announced that Japan’s public medical insurance will cover Wegovy, a new obesity treatment. This development comes amid debates over the potential misuse... Read More

Japan’s Childcare Leave and Benefit Contribution Exemptions

Employers and employees can be exempted from paying health insurance and retirement pension contributions for employees on childcare leave. Those affected include all employees who... Read More

Gender Pay Gap Disclosure in Japan

Gender pay gap disclosure in Japan is now a requirement for employers with the government’s Act on Promotion of Women’s Participation and Advancement in the... Read More

Employee Benefits News for Japan Q1 2023

March and April brought three noteworthy changes to employee benefits in Japan. They involve employment insurance contribution increases, child care allowance increases, and record losses... Read More

Childcare Leave Entitlements in Japan Expanded

Japan recently amended its Act on Child and Family Care Leave to expand childcare leave entitlements in the country. A significant feature of the amendment... Read More

Japan COVID-19 Employer Resources

Mandatory employee benefits in Japan include retirement, several types of disability pensions, workers’ compensation and unemployment insurance, healthcare, long-term care, paid leaves, and contribution to... Read More

Japan’s Life Insurers Make Adjustments for COVID-19

Life insurance companies in Japan have recently taken new measures to manage COVID-19. First, many life insurance companies elected to accept claims for death due... Read More

Market Guide for Employee Benefits in Japan 2020

This Asinta report gives you an overview of mandatory employee benefits in Japan as well as common, supplementary benefits. Inside you’ll also learn about the... Read More