Japan Payroll Pricing: The Annual Cost for 5, 20 and 50 Staff

Using our current fee schedule and a sharoushi's indicative rates, a Japan subsidiary's payroll costs about ¥1.34 million a year for 5 employees, ¥3.03 million for 20 and ¥6.43 million for 50. At a planning rate of ¥155 to the dollar (our assumption, not a published rate), that is roughly USD 8,600, USD 19,600 and USD 41,500. The total includes monthly payroll coordination, two bonus runs, year-end adjustment, the July social and labour insurance filings and the January statutory reports. All figures exclude 10% consumption tax. When you compare these figures with a global vendor's per-payslip quote, check the events outside the monthly cycle: the bonus filings, the July filings and the December to January year-end work.

• Two invoices, not one. Our coordination fee and the licensed sharoushi's fee are billed separately. The sharoushi contracts with and invoices the Japan entity directly, so the budget needs both lines.
• Scale lowers the per-head cost. Fixed base fees spread over more people: about ¥267,200 per employee per year at 5 employees, ¥151,700 at 20 and ¥128,600 at 50.
• Bonuses are separate pay runs. Each bonus has its own payslips and its own Japan Pension Service report, due within 5 days of payment. We price each bonus run separately.
• The busy season costs extra on the sharoushi side. Year-end adjustment adds one month of the sharoushi retainer. The two July filings add half a month each.
• Year one costs more. Setup, social insurance registration and change events (new hires and salary or address changes; fees for leavers are confirmed when they occur) are one-time or per-event fees, not part of the run rate.

The annual payroll budget for 5, 20 and 50 employees

A full year of Japan payroll for a 20-person subsidiary costs about ¥3.03 million (about USD 19,600), including bonuses and every annual statutory filing. The table below shows each line for three headcounts. It assumes every employee is paid monthly and receives two bonuses a year. AQ Partners lines are sourced from our current fee schedule. Sharoushi lines use the indicative schedule we share with clients: a ¥20,000 corporate base fee plus ¥1,800 per employee per month. The sharoushi sets its own fees, and we confirm them with the client before the sharoushi is engaged.

Annual cost line (JPY, excl. consumption tax)	Who bills	5 employees	20 employees	50 employees
Payroll Support: ¥40,000 fixed + ¥7,000 per employee per month, x 12. Includes year-end adjustment, statutory reports, resident tax update, labour insurance renewal and standard remuneration report coordination	AQ Partners	¥900,000	¥2,160,000	¥4,680,000
Sharoushi monthly retainer: ¥20,000 + ¥1,800 per employee, x 12	Sharoushi	¥348,000	¥672,000	¥1,320,000
Sharoushi: labour insurance annual renewal, a statutory filing (0.5 x monthly retainer)	Sharoushi	¥14,500	¥28,000	¥55,000
Sharoushi: standard remuneration report (0.5 x monthly retainer)	Sharoushi	¥14,500	¥28,000	¥55,000
Sharoushi: statutory year-end adjustment (1.0 x monthly retainer)	Sharoushi	¥29,000	¥56,000	¥110,000
Bonus pay runs: ¥5,000 + ¥2,000 per employee per run, x 2 runs	AQ Partners	¥30,000	¥90,000	¥210,000
Annual run rate		¥1,336,000	¥3,034,000	¥6,430,000
Annual run rate in USD at the ¥155 = USD 1 planning rate cited above		about USD 8,600	about USD 19,600	about USD 41,500
Per employee per year		¥267,200 (about USD 1,720)	¥151,700 (about USD 980)	¥128,600 (about USD 830)

Three points on reading the table. First, the sharoushi rows are a reference, not a quotation: the actual fee depends on company size, payroll complexity and headcount, and a sharoushi may charge more for a short turnaround. Second, the sharoushi reference schedule has no line for bonus runs, so any sharoushi fee for bonus calculation is confirmed during engagement and sits outside these totals. Third, the USD figures use a planning rate of ¥155 to the dollar, chosen only for illustration and not a published market rate. Restate them at your group treasury's budget rate, as set out in our guide to budgeting a Japan subsidiary in yen.

These are the costs of running payroll, not the cost of employing people. Employer social insurance contributions, employment insurance and the payroll itself are separate, and our breakdown of employer social insurance and the true cost of hiring covers them.

How each payroll fee is built

Our payroll pricing has four parts: a monthly per-head fee, a fee for each bonus run, a year-end adjustment fee and the annual statutory filings. Each part follows a fixed date in the Japanese payroll year, which is why a quote priced only per payslip can leave gaps.

Monthly payroll coordination

Our Payroll Support fee is ¥40,000 a month plus ¥7,000 per employee (source: our current fee schedule). It covers the monthly cycle. We collect and check attendance and pay data, send it to the sharoushi (社会保険労務士, sharoushi), review the returned figures and confirm the withholding income tax and each employee's resident tax deduction. We also issue a monthly payroll report showing gross pay, deductions, net pay and employer costs. Where a pay change triggers a grade revision, we coordinate the monthly remuneration change report (月額変更届) with the sharoushi. The cycle closes data on the last day of the month. The client finalises attendance by the 5th business day, we share draft results on the 20th, and the client approves and pays on the 25th, or the preceding business day if the 25th is not a business day.

The sharoushi's retainer runs alongside. At 20 employees the indicative retainer is ¥20,000 + (20 x ¥1,800) = ¥56,000 a month (source: the indicative sharoushi schedule above). The sharoushi contract must be signed before payroll can start, and the Japan entity signs it directly, not AQ Partners. HQ should plan for that signature in the onboarding timeline.

Bonus pay runs

A Japanese bonus (賞与, shoyo) is a separate pay run with its own payslips, withholding and filing. The employer must submit the bonus payment report to the Japan Pension Service within 5 days of the payment date, according to the Japan Pension Service guidance on bonus payment reports. The same page caps the standard bonus amount at ¥5.73 million cumulatively per fiscal year (April to March) for health insurance and ¥1.5 million a month for employees' pension. We charge ¥5,000 per run plus ¥2,000 per employee: ¥45,000 per run at 20 employees, or ¥90,000 a year for two runs (source: our current fee schedule).

Year-end adjustment

Year-end adjustment (年末調整, nenmatsu chosei) recalculates each employee's income tax for the calendar year in December and settles the difference through payroll. The National Tax Agency's year-end adjustment guidance says it covers employees who worked for the company through the year or who joined during the year and were still employed at year-end. It applies only to employees who have filed the dependant exemption declaration (扶養控除等申告書) with the company, so staff whose main employer is elsewhere are not included. The same NTA page excludes employees whose total pay for the year is over ¥20 million. On the sharoushi side this costs one extra month of retainer (¥56,000 at 20 employees). On our side it is included in the monthly fee: we collect employee declarations, check the reconciliation and distribute the withholding slips (源泉徴収票, gensen choshu hyo).

Statutory reports, resident tax and the July filings

Four annual events complete the year. Our monthly fee covers the coordination of all four.

• January statutory reports. The employer files a salary payment report (給与支払報告書, kyuyo shiharai hokokusho) by January 31 with the municipality where each employee lived on January 1, under Local Tax Act Article 317-6 (Tokyo Metropolitan Government Bureau of Taxation). For withholding slips due on or after January 1, 2027, that filing is treated as the withholding slip filing with the tax office (NTA 7411).
• June resident tax update. Municipalities send the special collection amounts that payroll deducts from June to the following May. Payroll remits them by the 10th of the month after deduction, per the same Tokyo guidance.
• July labour insurance annual renewal. For fiscal 2026 the filing and payment period ran from June 1 to July 10, according to the Chiba Labour Bureau (MHLW) fiscal 2026 notice. The sharoushi fee is half a month's retainer.
• July standard remuneration report. The report (算定基礎届, santei kiso todoke) is due by July 10 each year. The revised standard monthly remuneration applies from September to the following August, per the Japan Pension Service guidance on the standard remuneration report. The sharoushi fee is also half a month's retainer.

When the money is spent: the payroll cost calendar

About 93% of the run rate falls evenly across the year. The rest is concentrated in June, July and December, with January adding only paper handling where documents are not filed electronically. For a 20-employee subsidiary with bonuses in June and December, the cash profile looks like this.

Month	Payroll event	Cost on top of the monthly ¥236,000 (¥180,000 AQ + ¥56,000 sharoushi)
Every month	Monthly payroll, withholding and resident tax deductions	None
January	Salary payment reports to each municipality by January 31 (from January 2027 these also count as the withholding slip filing with the tax office).	None in our fee; sharoushi paper handling at ¥1,500 per document for anything not filed electronically
June	Resident tax update for the June to May cycle; summer bonus run	¥45,000 bonus run
July	Statutory filings: labour insurance renewal and standard remuneration report, both by July 10	¥28,000 + ¥28,000 sharoushi
September	New standard monthly remuneration grades take effect	None
December	Year-end adjustment; winter bonus run	¥56,000 sharoushi + ¥45,000 bonus run

Using the fee sources above, the monthly base of ¥236,000 x 12 is ¥2,832,000, and the seasonal lines add ¥202,000, giving the ¥3,034,000 annual total.

What to check in a global vendor's quote

If a quote is priced per payslip per month, the lines to check are the Japan events that do not produce a monthly payslip. Before comparing a vendor's number with the table above, ask whether the quote includes each of these, and who signs and files them.

• The sharoushi. In our model a licensed sharoushi does the social and labour insurance filing work and invoices the entity directly. If a quote does not name who does that work, ask, because it may be a second invoice.
• Bonus runs and the 5-day bonus payment report. Ask whether bonuses are priced as off-cycle runs, and who files the bonus payment report with the Japan Pension Service.
• Year-end adjustment. This means collecting employee declarations in November and December and settling the result in the December payroll, not only issuing a payslip.
• The January 31 filings. Salary payment reports to each municipality by January 31 (from January 2027 these also count as the withholding slip filing with the tax office). A 20-person Tokyo team can span several wards.
• Resident tax. This covers loading the June special collection amounts and remitting by the 10th of each month to each municipality.
• The July filings. These are the labour insurance renewal and the standard remuneration report, both due by July 10.
• Withholding tax filing to the tax office. In our own pricing, this sits under Accounting Support. A payroll-only engagement needs a separate engagement for it, so check where it sits in any quote.

The comparison of a single provider, a Big Four firm and an in-house hire for 5 to 50 people sets these lines against the other delivery models.

Costs outside the annual run rate

Setup fees, per-event fees and software licences are not in the run-rate table. HQ should budget them separately, especially in the first year.

Item	Fee (JPY, excl. consumption tax; source: our current fee schedule)	When it applies
Initial payroll process and software setup (freee or MoneyForward)	¥100,000 one-time	No payroll yet in Japan
Payroll transition: onboarding current process, or migration to freee or MoneyForward	¥200,000 one-time	Payroll already runs in Japan
Social insurance related filings	¥100,000 one-time	First enrolment of the entity
Change of event (new hire, salary, address or other record change)	¥15,000 per event	Each hire or change
Bank Payment Support (executing salary and bonus payments)	¥3,000 per payment	Only if AQ Partners arranges the payments
Sharoushi paper-based handling	¥1,500 per document (indicative; source: the sharoushi reference schedule)	Documents that cannot be filed electronically
Initial 36 Agreement preparation and filing	¥50,000 one-time	First year, if staff work beyond statutory hours or on statutory holidays
36 Agreement annual refiling	¥25,000 per year	From the second year, if staff work beyond statutory hours or on statutory holidays (MHLW, Labor Standards Act Article 36)
Payroll software licence	Not included; confirmed with the software provider	Every year
Recalculation from late or amended client data	Priced separately; confirmed when it occurs	Only when it occurs

Changing provider adds a transition fee and some parallel running. Our guide to moving payroll between providers without a compliance gap covers the sequencing. The 36 Agreement rows apply to any team that works beyond statutory hours or on statutory holidays, as explained in the 36 Agreement and working-hours rules.

Rule changes that affect the January 2027 filings

Two NTA rule changes for statutory reports due on or after January 1, 2027 change the workload of the next January cycle. First, the threshold for mandatory electronic filing drops from 100 sheets to 30 sheets per report type. The count is based on the number of sheets of that type due two years earlier, per the NTA guidance on electronic filing of statutory reports. Second, for withholding slips due on or after January 1, 2027, a salary payment report submitted to the municipality is treated as submitted to the tax office, per the NTA withholding slip guidance linked above.

For the tax-office reports, check how many sheets of each type were due in January 2025; any type at 30 or more must be filed electronically in January 2027. Salary payment reports that the sharoushi cannot file electronically are charged at ¥1,500 per document under the indicative sharoushi schedule.

Budget notes for the regional CFO

The budget lines above become a decision in three places: who signs, which entity pays, and what the subsidiary's size changes.

• Signatures. The Japan entity signs the sharoushi contract and approves each payroll and bonus run. Build the approval step into the group's delegation of authority so the payment on the 25th (or the preceding business day) is not held up waiting for HQ.
• Consumption tax. Every fee here excludes consumption tax at the 10% statutory rate. Whether the entity can recover it depends on its consumption tax position, so budget gross and let the accountant net it off.
• Headcount thresholds. Below 10 employees the entity can apply to pay withholding tax twice a year, by July 10 and January 20, instead of by the 10th of each following month. The NTA guidance on the special payment deadline limits this to employers with fewer than 10 regularly paid employees. At 10 or more the option ends and a notification is required, so the 5-employee budget changes shape as the team grows.
• Who owns the calendar. In our model the client deals with AQ Partners and AQ Partners deals with the sharoushi. HQ still owns the inputs: bonus amounts and dates, pay changes and leaver notices. Recalculation fees apply when client data arrives late or is amended.

Working with AQ Partners. Our Tokyo team provides monthly payroll coordination with a licensed sharoushi, bonus pay runs, year-end adjustment, the annual payroll statutory reports, and payroll software setup and transition for foreign-owned subsidiaries in Japan, priced as set out above. Book a consultation to review your Japan payroll budget or a vendor quote against the full payroll year.