Wages and Salaries in Japan
According to Japanese job board provider doda, in 2020 the average salary -across all positions, industries and job types – was 4.09 million JPY (around 37,200 USD) per year. This means that the average Japanese employee makes around 340,000 JPY per month.
Salaries by Job Type
Of course, average salaries heavily depend on job types. Below, you can find a list of averages for different jobs, also based on the above-mentioned doda ranking. Data for engineering jobs in IT and Communications is provided because of the high degree of openness of these jobs to non-Japanese workers.
The data quoted here is the result of a survey with around 400,000 valid responses from employees in Japan. However, please note that these are only averages and thus only serve as a general indicator of income levels. Salaries can vary greatly depending on your area and the company you work for.
|Type of Work||Average annual salary (in million JPY)|
|Planning and Management||5.16|
|IT Strategist/System Planner||5.75|
|Systems Integration Engineer||4.52|
|Developer for Smartphone and Native Apps||4.43|
|Web Service Engineer||4.19|
|Regular Office Work/Assistant Tasks||3.32|
Long-Term Salary Increase
Salary increases with age and experience. In Japan, long-term salary progression for men and women is as follows.
|Age||Avg. annual salary (Men)*||Avg. annual salary (Women)*|
|50s and up||6.61||4.31|
*in Million JPY per year
The average annual salary for a fresh university graduate (22-23 years old) with no previous work experience is around 3 million yen per year. In the first two or so years, salary only increases slowly but jumps up somewhat after the 3rd year at the company.
Fresh graduates with relevant skills or 1-2 years’ worth of work experience (called “secondary freshers,” 第二新卒 dai-ni shinsotsu in Japanese) can fetch somewhat higher salaries on their first job, but only very few companies offer over 4 million yen per year.
From a Japanese perspective, everything under 3 years’ worth of work experience is seen as somewhat of a “training period,” which keeps salaries for fresh entrants into the job market relatively uniform.
Salaries by Region
Salaries tend to be higher in the regions with Japan’s three main metropolises (the Tokyo, Nagoya and Osaka areas). Salaries are lower in rural areas, but rent and other living expenses tend to also be lower there.
|Region||Average annual salary (in million JPY)|
|Kanagawa (Yokohama, Kawasaki)||4.30|
|Chūgoku and Shikoku||3.81|
|Central Prefectures Excluding Kantō||3.76|
|Hokkaidō and Tōhoku||3.71|
|Kyūshu and Okinawa||3.69|
Raises and Promotions
In the past, the majority of Japanese companies used seniority (or tenure) as a basis for salary raises and promotions. The longer an employee stayed at the company, the higher their salary would be – regardless of their performance at work.
Since the mid-90s, the old system is in the process of breaking up and diversifying into a variety of salary schemes. Some companies still employ the traditional seniority scheme, others have switched to 100% merit-based systems. Others again chart a middle route, combining aspects of both.
That being said, for the average employee, raises and promotions in Japan tend to be on the conservative side. Sudden jumps in salary are relatively rare, and changes tend to be more incremental. For promotions, employees usually go through one or two lower managerial positions over a few years before being appointed as high-ranking managers.
At most Japanese companies, salaries are raised/revised once per year (in April). Salary negotiations take place in meetings (面談 mendan) between employees and their superiors. For regular employees, raises and promotions are also affected by evaluations from middle management.
The culture of foreign capital firms (companies that have their main headquarters overseas and are maintaining branch offices in Japan, called 外資系 gaishikei in Japanese) is often closer to that of their respective “home countries.” As a result, salary and career progressions as well as raises tend to be handled differently there. However, this is not always the case, especially for foreign companies that have been operating in Japan for a long time.
Bonus payments are a unique aspect of Japanese work culture. There’s no law that requires companies to give out boni – it’s 100% a custom that came about as a result of Japan’s postwar economical development.
Bonus payments are lump-sum payments of “extra salary” that are paid once or twice a year, usually in June and/or December. However, there are also companies that don’t have a bonus system at all. It is also common for companies to suspend or curb bonus payments during harsh economic downturns.
Depending on the company, the factors influencing a bonus payment and the paid amount can vary significantly. Broadly speaking, they can be broken down into two categories:
- Fixed bonus payment
- Flexible bonus payment
With fixed bonus payments, employees start at certain bonus amount (e.g. one month’s worth of salary). For job listings that only list annual salary, these bonus payments are often already included in the total figure. Just like in the seniority-based salary system, employee’s bonus payments increase at a fixed rate together with their annual salary.
Some companies may have extra incentives for high-performing employees. However, long-term employees are very likely to receive higher boni.
Flexible bonus systems are designed to reflect the performance of individual employees. Better performance at work means a higher bonus; under-performing employees receive less. In contrast to fixed bonus schemes, they are less transparent and don’t allow a lot of planning ahead. On the flipside, they can mean a quite a significant increase in salary for “good performers.”