Japan is one of the top economies globally, with businesses heavily focused on the automobile, tech, and innovation sectors. It’s a great environment for business expansion and an upcoming market for outsourcing processes.
Wondering how much it’ll cost to hire a Japanese workforce?
The average salary in Japan is 6,180,000 Japanese Yen (JPY) or 53,583 USD per year in 2021 (as per the exchange rate in February 2022, 1 JPY = 0.0087 USD).
In this article, we’ll explore further details surrounding the average salary in Japan and the factors that influence it. We’ll also cover the annual increment, the highest and lowest-paying jobs, and the country’s economic outlook.
This article contains:
(Click on a link below to jump to a section)
- Stats on the average salary in Japan
- 4 factors that influence salaries in Japan
- Average salary increment in Japan
- Highest and lowest-paying professions in Japan
- The economic outlook for Japan
Let’s get started!
Stats on the average salary in Japan
The average salary in Japan varies across regions. It also depends on factors, including job location, work experience, education level, and more.
So, considering all of these elements, an employee in Japan earns an average monthly salary of approximately 515,000 Japanese Yen (JPY). That’s about 4,467 US Dollars (USD).
This average salary figure includes additional benefits like housing and transport.
Now, let’s explore other aspects of the average salary in Japan.
A. The Japanese salary range
The average monthly salary for employees in Japan can range from approximately 130,000 JPY (1,128 USD) to 2,300,000 JPY (19,963 USD).
Note: The upper range of salaries is the highest average and not the maximum salary Japanese people earn.
B. The median salary
According to Salary Explorer, the 2022 median salary in Japan is 545,000 JPY (4,730 USD) per month.
What does a median salary indicate?
The value represents the mid-point that divides the Japanese working population in half. So, 50% of Japanese people earn above the median income, while the other half earn less.
The median salary is less sensitive to higher or lower extremes on the salary spectrum, which greatly impacts the average value.
Generally speaking, employers should aim to offer hiring packages around the median salary for specific job categories.
C. The minimum wage
Japan typically has a 40-hour workweek and the minimum hourly wage for workers is established by each region’s Regional Minimum Wage Council.
On average, the country’s minimum hourly wage for workers increased from 902 JPY/Hour in 2020 to 930 JPY/Hour in 2021.
However, if employees work overtime, they are entitled to higher wages above their hourly income based on the Labor Standards Act of 1947.
Tokyo workers earn the highest minimum wage in Japan – about 985 JPY (8.5 USD) per hour – comparable to other high-income international cities like Hong Kong and Seoul. The difference between Tokyo and other Japanese regions is that it has more business operations and better infrastructure.
Note: All salary figures provided in this article are averaged and intended as general guidelines and not exact values.
Next, let’s explore the various factors that influence salaries in Japan.
4 factors that influence salaries in Japan
Here are four key factors that play a role in determining salaries in Japan:
1. Region
Tokyo offers the highest average salary in Japan as it has many big corporations and a larger business market. It’s followed by cities like Yokohama and Osaka.
Here’s a list of the average salaries by region:
| City | Average Salary/ Month |
| Tokyo | 574,000 JPY (4,982 USD) |
| Yokohama | 564,000 JPY (4,895 USD) |
| Osaka | 555,000 JPY (4,817 USD) |
| Nagoya | 545,000 JPY (4,730 USD) |
| Fukuoka | 526,000 JPY (4,565 USD) |
| Kyoto | 505,000 JPY (4,383 USD) |
| Kawasaki | 495,000 JPY (4,296 USD) |
| Saitama | 486,000 JPY (4,218 USD) |
| Hiroshima | 476,000 JPY (4,131 USD) |
| Okinawa | 390,000 JPY (3,385 USD) |
Source: Salary Explorer and Salary Expert
2. Education level
The average salary in Japan increases based on one’s educational qualifications. The higher an employee’s qualification, the more money they earn. For example:
- Employees with a college or a diploma education earn about 17% more than those who’ve attained a high school level.
- Employees with a bachelor’s degree earn 24% more than employees with a college or diploma education.
- Employees with a master’s degree earn 29% more than those with bachelor’s degrees.
- Employees with a Ph.D. earn 23% more than employees with a master’s degree.
Source: Salary Explorer
3. Experience level
Another key factor in determining an employee’s net income in Japan is their work experience. Generally, employees earn a higher salary if they have more experience.
Here’s the data on how the average salary increases with experience:
| Years of Experience | Average Salary |
| Less than two years or freshers | Starting Salary |
| 2-5 years | 32% more than employees with less than 2 years of experience |
| 5-10 years | 36% more than employees with less than 5 years of experience |
| 10-15 years | 21% more than employees with less than 10 years of experience |
| 15-20 years | 14% more than employees with less than 15 years of experience |
| Above 20 years | 9% more than employees with less than 20 years of experience |
Source: Salary Explorer
Fun Fact: A Japanese company typically requires employees to retire at the age of 60. But some retired employees look for a part time job as the Japanese pension system doesn’t kick in until the age of 65.
4. Industry
The average salary in Japan is further influenced by the job sector. Different industries offer different salaries for working professionals.
Let’s glance at the different average salaries based on industry:
| Industry | Average Annual Salary |
| Medical and Health Care | 9,220,000 JPY (79,830 USD) |
| Science and Technical Services | 8,270,000 JPY (71,621 USD) |
| Real Estate | 6,990,000 JPY (60,523 USD) |
| Education | 6,550,000 JPY (56,728 USD) |
| Finance and Accounting | 6,360,000 JPY (55,082 USD) |
Source: Salary Explorer
Note: Health care professionals don’t necessarily earn the highest salary in Japan. The industry average isn’t a direct indication of each roles’ salary. For example, financial managers may earn a significantly high salary, but the low salary of accounting clerks brings down the industry average.
Read on to know the average annual salary increments in Japan.
Average salary increment in Japan
Employees in Japan receive an average salary increment of about 8% every 16 months. The 16-month period is mostly attributed to the fact that appraisals rarely happen exactly on a yearly basis.
This increment may vary based on industry and experience level. The salary increase with experience is mostly due to companies incentivizing experienced employees to retain their services.
The data below highlights the annual increment rates across different industries and experience levels in Japan.
A. Annual increments as per industry
Here are the increments based on industries in Japan:
| Industry | Annual Increment |
| Banking | 8% |
| Energy | 7% |
| Information Technology | 6% |
| Healthcare | 5% |
| Travel | 4% |
| Construction | 3% |
| Education | 2% |
Source: Salary Explorer
B. Annual increments as per experience
Here are the increments based on experience level in Japan:
| Experience Level | Annual Increment |
| Junior | 3%-5% |
| Mid-career | 6%-9% |
| Senior | 10%-15% |
| Top Management | 15%-20% |
Source: Salary Explorer
Note: Thriving businesses tend to offer higher annual increments and frequent raises. That said, the increments usually depend on the economic situation of the region or country during the year.
So, which are the best paying roles in Japan?
Highest and lowest-paying professions in Japan
Let’s look at the average net income based on job roles in Japan.
A. Highest paying professions
Here are the jobs that offer the highest average salary in japan:
| Job Title | Average Salary/ Month |
| Dentist | 1,290,000 JPY (11,189 USD) |
| Chief Executive Officer | 1,220,000 JPY (10,583 USD) |
| Chief Financial Officer | 1,150,000 JPY (9,975 USD) |
| Attorney | 1,080,000 JPY (9,368 USD) |
| Dietitian | 1,020,000 JPY (8,847 USD) |
Source: Salary Explorer
Fun Fact: The average income of a Japanese player in the Fukuoka SoftBank Hawks professional baseball team amounted to around 6,900,000 JPY (59,822 USD) for the 2021 season. The team earns the highest salary of all other Japanese professional baseball teams.
Note: The amount mentioned above isn’t the actual maximum salary of those roles and only an average of multiple professionals in the same role.
B. Lowest paying professions
Here are the professions that earn the lowest salary in Japan:
| Job Title | Average Salary/ Month |
| Waiter | 163,000 JPY (1,414 USD) |
| Customer Service Representative | 201,000 JPY (1,743 USD) |
| Automotive Mechanic, Nursery Teacher | 203,000 JPY (1,761 USD) |
| Call Center Representative, Retail Cashier | 207,000 JPY (1,796 USD) |
| Human Resources Officer | 331,000 JPY (2,867 USD) |
Source: Salary Explorer
Waiters earn the lowest salary in Japanese society. That said, they still fall under the minimum tax bracket.
What’s the minimum income required for a Japanese employee to pay tax?
Anyone earning above or below the base level of 1,950,000 JPY a year (162,500 JPY a month) must pay tax to the National Tax Agency.
Other popular jobs and their monthly salary include a business analyst (642,000 JPY), teacher (411,000 JPY), and information technology manager (841,000 JPY).
Fun Fact: One of the preferred jobs for foreigners in Japan is that of an English teacher. The job offers an average base salary of 200,000 JPY (1,734 USD).
Moreover, foreigners don’t need to have any prior teaching experience but must have a bachelor’s degree to get a work visa.
Finally, let’s look at the job market situation in the country in 2022.
The economic outlook for Japan
Japan is the world’s third-largest economy after USA and China, at 5.39 trillion USD.
There is a strong presence of top businesses, especially Japanese-origin companies like Sony, Honda, Nikon, and more. In fact, there are 53 Fortune Global 500 companies headquartered in Japan.
That said, Japanese markets took a hit during the pandemic. But as of 2022, the market seems to be healing. So, the outlook for jobs in Japan is good and growing.
This offers great opportunities to earn higher salaries for job seekers who can speak the Japanese language. But if they have high demand skills, like English communication and technical knowledge, they don’t need to be proficient in the Japanese language.
The country also has rising call center offshoring operations.
Should you outsource to Japan?
Japan doesn’t have extremely low salaries.
But they have one of the highest per-capita allotments of higher education institutes in the world and are known for their meticulous work ethic. In Japanese society, employees are known for working long hours and working hard.
All the above factors make Japan an attractive outsourcing destination.
Wrapping up
Hiring entry-level employees in Japan is relatively affordable. The minimum salary ranges between 30,400 JPY to 39,600 JPY (265 USD to 344 USD) per month. But the employee cost can significantly increase for more experienced professionals and complex roles.
Still, Japan is a viable option for your outsourcing needs.
You can go through this article to find the average income in Japan based on different factors. It can help you decide whether outsourcing to Japan is the perfect choice for your business.
Andy is a technology & marketing leader who has delivered award-winning and world-first experiences.