How is the bonus calculated in Japan? Will I be paid?

In Japan, additional benefits other than monthly income, which is generally an incentive, are called "bonus".

First of all, bonuses are not legally obligatory as guaranteed by the minimum wage. Most companies pay at employer`s discretion.

How company decide amount of "Bonus"?

How company decide depends on the size of your company.

For small and start-up companies, it is often up to management to decide. If the company makes a lot of profit, it will be paid a lot, and it seems that there are many levels of salary of about 1 to 2 months.

If you work for a start-up, you may get stock options and physical stocks instead of bonuses.

In the case of a large company, where there is a in-house labor union, management and workers discuss every spring (around March) whether to give a bonus for several months of salary. So, for example, it is decided whether to pay 4 months' worth of monthly salary or 3 months' worth. The below is example of settlement of bonus.

Mitsubishi Electric responds to full lump sum payment 5.7 months a year, bear 1000 yen

三菱電機、一時金満額回答へ 年5.7カ月、ベアは1000円:時事ドットコム (jiji.com)

For large Japanese companies, it's usually between 3 and 6 months.

Some tips for bonus in Japan

What should not be misunderstood here is that not all are paid at the same level. This means the total amount of resources to be distributed to union members. In addition to this, individual performance evaluation is added, so it is not a calculation that you can simply get 4 months' worth of monthly income.

More importantly, in the case of large Japanese companies, it is usually paid twice a year. In most cases, you will be paid in June and December. The payment level decided by the labor union and management is often paid in two installments.

In other words, of course, bonuses will be paid after taxes and social insurance premiums have been deducted. As a feeling, you can't simply get four times the monthly income, so let's know

From the worker's point of view, Japanese people take it for granted that they receive bonuses. Many people take it for granted as part of their living expenses.

Although the payment is not legally guaranteed, many Japanese recognize it as a long-standing practice. So if management sets the bonus payment to zero for some reason, there will be a big discord.

Also, in Japanese companies, trade unions often play a major role in bonus negotiations, so workers' bonuses are rarely reduced significantly. On the other hand, for managers, there are no restrictions, so if management becomes difficult, the bonus will be cut off immediately.

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