The October 2025 reform made a full-time employee mandatory for the Business Manager Visa. Most planning treats that as a salary line. It is not — it is a salary line plus an employer contribution that founders routinely leave out of the model, on a company that is legally required to enrol from the day it starts paying anyone.
There is also a second surprise sitting before that one. A Japanese company must enrol in health insurance and employees’ pension even if its only person is the representative director. The Japan Pension Service states it plainly: corporations are covered, including where there is only the proprietor.
Every corporation is covered, with no headcount threshold
Japan splits businesses into those that must enrol (強制適用事業所) and those that may. Sole proprietorships generally only fall in once they employ five people. Corporations are in from incorporation, whatever their size — the Japan Pension Service’s own wording covers the case of “the proprietor only” (事業主のみの場合を含む).
So the question is not whether your company enrols. It is when, and on what salary.
One nuance worth knowing: enrolment follows remuneration. A representative director drawing no director’s remuneration at all has no basis on which to calculate premiums, and is not covered — which also means no health insurance through the company and no pension accrual. Founders sometimes choose zero remuneration in the first months to conserve cash without registering what they are giving up.
What the employer actually pays
The part that breaks budgets is that the employer pays roughly the same again as the employee, on top of salary.
| Contribution | Rate | Who pays |
|---|---|---|
| Employees’ pension (厚生年金) | 18.3%, fixed since September 2017 | Split evenly — 9.15% each |
| Health insurance (健康保険) | Varies by prefecture and insurer, broadly around 10% | Split evenly |
| Long-term care (介護保険) | Additional, for employees aged 40 to 64 | Split evenly |
| Child-rearing levy (子ども・子育て拠出金) | Small | Employer only |
The pension rate stopped rising in September 2017 and has been fixed at 18.3% since — that one you can plan around with confidence. Health insurance rates differ by prefecture and by which insurer the company uses, so the figure to budget with is the current table for your prefecture, not a national average.
The practical rule: an employee costs meaningfully more than their salary — as a planning figure, think in terms of salary plus roughly fifteen percent, then check the exact rates for where you are. A JPY 4 million salary is not a JPY 4 million cost.
Run that through the reform. The employee is mandatory, the office is mandatory, and both are now recurring costs that start before revenue does. That is the number to test against your capital, not the incorporation fees. We break down the one-off side in what it actually costs to set up a company in Japan.
The deadlines are short
Social insurance filings run on a five-day clock. When someone becomes covered — or stops being covered — the notification of acquisition or loss of insured status (被保険者資格取得届 / 喪失届) goes to the Japan Pension Service within five days.
Five days is not five business days of your attention. It is five days from the fact, which in practice means the paperwork has to be ready before the person starts, not organised afterwards. A founder handling their own first hire while also dealing with an immigration filing is exactly the person who misses this.
Labour insurance is a separate system
Social insurance and labour insurance are commonly spoken of together and are administered separately, with different triggers.
Workers’ accident compensation insurance (労災保険) applies once you employ anyone, and the employer pays all of it. Employment insurance (雇用保険) applies to employees meeting the hours and duration conditions, and is shared.
Directors are generally outside both, because they are not employees. That is a gap worth understanding rather than discovering: as a representative director you are not covered by workers’ accident insurance for something that happens to you at work.
Why this touches your visa, not just your accounts
Compliance with public obligations is not a purely administrative matter for a foreign founder. The transitional measure for existing Business Manager Visa holders is expressly conditioned on the business being sound and on tax obligations having been met — we cover that in your deadline is October 2028. Public obligations are the backdrop against which renewals are assessed.
A company that has an employee on the books to satisfy immigration, but has not enrolled that employee in social insurance, is carrying a contradiction in its own paperwork. The requirement and the obligation arrive together.
Who handles this
Social insurance and payroll are not the tax accountant’s field in Japan by default — the specialist is a certified social insurance and labour consultant (社会保険労務士). Some tax firms have one in-house or affiliated; some do not, and will tell you so only when asked.
Ask any prospective tax firm three things: do you handle payroll and social insurance or is that a separate engagement, what does it cost monthly, and who files the five-day notifications. The answers decide whether your first hire is one relationship or two.
Our directory lists English-speaking tax accountants in Japan and records which firms publish their fees. The employee requirement itself, and who is eligible to fill it, is in hiring your first employee in Japan.
This is a summary of published rules, not advice. Rates change, prefectural health insurance rates differ, and your own position needs a licensed professional.