How to Calculate Overtime Pay in Japan: Check Your Payslip, Allowances and Any Shortfall

Gather the calculation records

• Payslips showing the relevant hours, allowances, closing dates and pay dates.
• Your written employment terms and wage rules, including allowance conditions and premium rates.
• The company calendar and the basis for its average monthly scheduled hours.
• Attendance and work records, including actual breaks, instructions and corrections.

Check whether a line marked “20 overtime hours” includes night or holiday work or whether these appear separately. If approved hours differ from actual work, record the instructions and work performed rather than relying only on the application field.

Work out which allowances belong in the hourly rate

For monthly wages, divide the relevant monthly wages by the scheduled hours for the month. If scheduled hours vary between months, use the average monthly scheduled hours over the year. Our scheduled working hours guide explains the difference between a particular month's schedule and the annual average.

Position, qualification and perfect attendance allowances generally need to be considered for inclusion. The permitted exclusions concern family, commuting, separation, children's education and housing allowances, exceptional payments, and wages paid for periods longer than one month. Names alone do not establish an exclusion. An allowance paid uniformly regardless of family size or commuting costs, for example, may need to be included according to its substance.

For example, suppose basic monthly pay is ¥240,000, an included qualification allowance is ¥16,000, a commuting allowance that qualifies for exclusion is ¥10,000, and average monthly scheduled hours are 160. The base hourly rate is (¥240,000 + ¥16,000) ÷ 160 = ¥1,600. Neither the full ¥266,000 nor basic pay alone is the correct numerator in this example. The 160 hours are an example condition, not a universal figure.

Distinguish the premium from the total wages due

These are statutory minimum rates. Check any more favorable company rules as well.

Ordinary statutory overtime overlapping with night work is at least 1.50 times the base rate. Overtime beyond 60 hours overlapping with night work is at least 1.75 times. Statutory rest day work overlapping with night work is at least 1.60 times. Do not add the ordinary 25% overtime premium on top of the statutory rest day premium, and do not include statutory rest day work in the overtime hours used for the 60 hour threshold. See our statutory rest day guide to identify the relevant days.

Payslip examples: 20 hours and 65 hours

Use the ¥1,600 base rate above. Assume monthly salary covers scheduled hours, there is no fixed overtime allowance, and there is no holiday work or additional company premium.

If monthly statutory overtime is 20 hours, including two hours of night work:

• The 20 overtime hours: ¥1,600 × 1.25 × 20 = ¥40,000.
• The additional night premium for two of those hours: ¥1,600 × 0.25 × 2 = ¥800.
• Total wages added to monthly salary: ¥40,800.

The ¥40,800 includes the ordinary wage component for the additional work. The premium component alone is ¥1,600 × 0.25 × 20 + ¥800 = ¥8,800. These are different figures.

In a separate month with 65 statutory overtime hours and no night work, the calculation is ¥1,600 × 1.25 × 60 + ¥1,600 × 1.50 × 5 = ¥132,000. Only the five hours beyond 60 use 1.50. This calculates payment and does not establish that working that amount of overtime is permissible.

If you receive a fixed overtime allowance, identify the kinds of overtime, night and holiday work it covers and the amount properly allocated before calculating any shortfall. See our fixed overtime allowance guide. A managerial job title alone does not establish the statutory managerial exemption, and night premiums remain relevant even for genuinely exempt managers.

Ask about a mismatch using the same period and categories

In the 20 hour example, if the relevant allowance already paid is ¥38,000, the comparison shows ¥40,800 − ¥38,000 = ¥2,800. Make sure the payments concern the same month and categories, and check whether another payslip line includes part of the payment.

For example: “Could you explain the base rate and premiums for my 20 statutory overtime hours, including two night hours, for [month]? Including my qualification allowance gives me ¥1,600 per hour and ¥40,800 in total. I would like to understand the difference from the ¥38,000 shown.” Attach your calculation and records and keep the response.

If the explanation does not resolve the issue, you can take the documents to a Labour Standards Inspection Office or another consultation service. Wage claims have a statutory five year limitation period with a transitional three year period currently applying, running from each wage payment due date. Do not assume that simply asking the employer or consulting an administrative office automatically stops the limitation period. Seek professional advice promptly if a deadline is approaching.

Use your conditions rather than an average overtime amount

An average amount cannot establish whether your payment is correct. Hourly rates, ordinary additional hours, statutory overtime, night work and fixed allowances differ. When comparing jobs, separate ordinary scheduled pay from overtime income, and compare scheduled hours and ordinary and busy month hours for the intended department. Ask for the calculation basis before joining if the figures remain unclear.

_{Sources: Osaka Labour Bureau: calculations and included allowances / MHLW: overtime, rest day and night premiums / MHLW: overtime beyond 60 hours / MHLW: limitation periods for wage claims / MHLW: consultation services}