Payroll & Social Insurance Services
RSM Shiodome Partners offers comprehensive payroll services, which covers the entire process from beginning to end—from enrolling the employee, to administrating direct deposit salary payment to their accounts. Our selection of payroll management services includes:
- Employee enrollment procedures
- Payroll calculations and monthly reporting
- Retirement and bonus calculations
- Payment of withholding Individual Income Tax as a Cash Management Agency
- Year End Adjustments
- Employee disbursement reports
- Pay slips
- Payroll disbursement services
- Consulting on Internal payroll systems
- Resident Tax Adjustments
Social Insurance Services
When hiring employees or incorporating a business, all Japanese companies must enroll into the social insurance and labor insurance benefits system.
What is Social Insurance and Labor Insurance?
(1) Social Insurance
Social Insurance (社会保険－shakai-hoken) can include payments for Health Insurance, Pension, Nursing, & Child Care benefits. Health and Pension benefits are paid in by both the employer and employee; Child Care is paid exclusively by the company, while Nursing insurance is paid in by the employer and employee if the employee is between 40 to 65 years old.
(2) Labor Insurance
Labor Insurance (労働保険 -roudo-hoken) is separate from social insurance and consists of unemployment insurance and accident compensation insurance. However, labor insurance is not applicable to the directors of the company. Labor insurance premiums, which are based on the labor insurance premium annual report, are paid by the company before July 10th for the current period from April to March.
Additional employment related services
Our certified Social Insurance and Labor Insurance agents will handle all the initial enrollment procedures, including the monthly and annual calculations. As a certified labor office, we can also assist you with recruitment for your business. Our services include:
- Initial registration & enrollment of new employees
- Social Insurance & Labor monthly calculations and reporting
- Processing (disbursement) of social insurance payments
- Assistance with Admission/ Withdrawals from the benefits program
- Applications for government subsidies
- Social and labor insurance procedures
- Workplace labor compliance
Professional assistance for tax, payroll, and company regulations for Japanese Expatriates
With rapid globalization, many Japanese employees are being re-shuffled to overseas branches or to related subsidiaries in order to accommodate their employer’s global expansion plans. To ease the burden of relocation, we also provide tax, payroll, and other legal solutions for expatriates working outside Japan.
(1) Tax affairs for expats
Expats who are no longer residents of Japan do not need to pay Japanese income taxes unless there is an income generated from activities in Japan. (If you become a non-resident in the middle of the year, inhabitant tax is not levied, but you still need to file a year-end income tax adjustment or individual income tax return.) Usually, salaries for expats are paid from the place of assignment. If the Japanese corporation covers the salaries proportionately, the payment is tax deductible from the Japanese corporate income. Overseas assignments are always inherently complicated in terms of international taxation, Japanese regulations, and overseas regulations. As a highly experienced & professional consulting group, we can offer the best possible solutions depending on your unique situation.
(2) Salaries for expats
There are 3 options for paying salaries to expats
・購買力補償方式 (Purchasing power-based compensation method)
This method is known as “no loss, no gain” method, because it equalizes the value of compensation for expats and homeland employees. For example, if a Japanese employee is sent to a country with a lower exchange rate, a transfer allowance is usually paid to offset the decrease, so the actual value of the salary remains the same.
・別建て方式 (Individual method)
This method calculates the salary amount separately from Japanese standards. However, because of foreign currency fluctuations and differences in the commodity prices, this method is no longer preferred due to the perceived inconsistency of the value of compensation
・併用方式 (Parallel method)
With this method, salaries calculated with Japanese standards (which includes the transfer allowance for the assigned country) are paid as a lump sum.
(3) Social Security Agreement
For expatriates on temporary assignment from the countries which have Social Security Agreement with Japan, exemptions from the coverage under the Japanese system may be established.
Certificate of Coverage which can prove the assignees enrollment under the overseas social security system is required for the application.
Depending on the countries of origin, the scope of exemptions can differ. we can offer the best possible solutions depending on your unique situation.
(4) Corporate regulations relating to expats
Below are examples of transfer allowances for expats:
Housing allowance, Family allowance, Education (Childcare) allowance, and Commuting allowance are common to support the life as an overseas employee.
Hardship allowance is paid as compensation to cover the stress and hassle of adjusting to a new environment.
・Remittance in JPY (JPY Allowance)
Allowance in JPY is commonly paid to cover the continuance of social insurance in Japan.
・Overseas Position Allowance
This allowance is commonly referred to as a managerial allowance or overseas allowance.
Payroll & Social Insurance Services – Fee Structure
Regarding the fee structure for our Payroll & Social Insurance Services, we will provide a quotation either on a time charge basis or a fixed fee arrangement calculated from the estimated hours to be spent on the expected scope of work. Depending on the matters to be consulted, there may be cases where it would be difficult to apply the fixed fee arrangement. Nevertheless, RSM Shiodome Partners takes on the mission to provide excellent cost-effective services within the budget of the client. Please feel free to contact our consultants for the details of our fee structure.