Step 5.
Signing the contract
You’ve made it through the application process — now it’s time to make things official. But before you sign anything, take a deep breath.
In Japan, your employment contract doesn’t just define your job — it affects everything from your income and visa status to your long-term future in the country. That’s why it’s crucial to understand the type of contract you’re being offered, what’s actually written in the terms, and what might be hidden between the lines.
In this step, we break down the main types of contracts in Japan, what to look out for before signing, how much you can expect to earn, and why reading every detail matters — especially when it’s written in a language you may not fully understand yet.
Make sure your next signature is an informed one.
Types of contract
In Japan, there are three primary types of employment contracts that significantly influence your job stability, benefits, and long-term prospects: Seishain (正社員), Keiyaku Shain (契約社員), and Haken Shain (派遣社員).
Seishain refers to permanent, full-time employees who enjoy long-term job security, comprehensive benefits such as health and pension insurance, bonuses, and opportunities for promotion. This status is highly coveted, especially among foreigners seeking stability in Japan, but it often comes with expectations of overtime and participation in after-hours company events.
Keiyaku Shain are contract employees hired for fixed terms, typically ranging from one month to a year. While they usually receive similar benefits to permanent employees, such as social insurance and paid leave, their job security is less certain, and bonuses are not always guaranteed. These contracts can be renewed, and some companies may offer permanent positions after a certain period.
Haken Shain are temporary staff dispatched by staffing agencies to client companies, usually on contracts lasting three to six months. They often have limited benefits and job security, and their employment is typically capped at three years with the same company, after which the company must decide whether to offer a direct contract.
Understanding these contract types is crucial for determining which aligns best with your career goals and lifestyle in Japan.
What's inside the contract?
When reviewing an employment contract in Japan, it’s essential to understand both the standard components and the nuances that may impact your work experience. A typical contract should clearly outline the duration of employment, job responsibilities, workplace location, working hours, salary details, and conditions for termination. It’s also common for contracts to include information about bonuses, allowances (such as commuting or housing), and benefits like health insurance and pension contributions.
Beyond these standard elements, pay close attention to clauses regarding overtime. Some contracts incorporate fixed overtime pay, which means a set amount of overtime is included in your salary regardless of actual hours worked. Ensure that any such arrangements are clearly defined and comply with labor laws . Additionally, be wary of non-compete and confidentiality clauses, which may restrict your employment opportunities after leaving the company.
It’s also advisable to verify the company’s policies on promotions, salary increases, and performance evaluations. While some of these may not be detailed in the contract, they can significantly affect your career progression. If any terms are unclear or seem unfavorable, don’t hesitate to seek clarification or consult with a labor specialist before signing. Understanding the full scope of your employment contract is crucial to ensuring a positive and legally compliant work experience in Japan.
Average pay
In Japan, average salaries vary significantly based on factors such as contract type, Japanese language proficiency, work experience, and location. As of 2025, the median monthly salary is approximately ¥472,000 (around $3,470 USD), with a national average of about ¥515,000 per month, equating to ¥6.1 million annually . However, these figures can fluctuate depending on the nature of employment.
Permanent employees (seishain) typically enjoy higher salaries and comprehensive benefits, reflecting their long-term commitment to a company. Contract employees (keiyaku shain) may receive slightly lower compensation, with contracts often ranging from one month to a year. Temporary or dispatch workers (haken shain) are employed through agencies and may earn less due to the agency’s commission, despite the company’s higher expenditure on such roles .
Location also plays a crucial role in salary variations. Urban centers like Tokyo offer higher wages to offset the elevated cost of living. For instance, Tokyo’s average monthly salary stands at ¥574,000, while in Okinawa, it’s around ¥390,000.
Proficiency in Japanese significantly impacts earning potential. Individuals with no Japanese language skills might earn approximately ¥5.9 million annually, whereas those with advanced proficiency (JLPT N2 or higher) can command salaries up to ¥8.5 million . Therefore, enhancing your Japanese language skills before seeking employment in Japan is highly advisable.
Before signing the contract
Before signing an employment contract in Japan, it’s crucial to thoroughly review its contents to ensure clarity and fairness. Contracts may be presented in Japanese, so if you’re not fluent, consider seeking assistance with translation to fully understand the terms. Key elements to examine include the duration of employment, job responsibilities, salary, working hours, overtime policies, holidays, and any probationary periods.
Be vigilant for clauses that may require excessive unpaid overtime or impose non-compete restrictions. Additionally, ensure that the contract aligns with Japanese labor laws, which apply equally to foreign and Japanese workers, safeguarding rights related to wages, working conditions, and termination procedures. If any terms seem unclear or unfavorable, don’t hesitate to ask for clarification or consult with a labor specialist before committing.
Taking these precautions can help prevent misunderstandings and ensure a positive employment experience in Japan.