Japan is an attractive nation to build your career, considering they continue to invite foreign workers due to the aging population. Are you interested but not sure how much someone can make there? Is the paycheck worth leaving your country and building a new career there?
As of the latest available data, the average annual salary in Japan is around ¥2.5 million to ¥5.7 million. This figure encompasses not only the base salary but also bonuses and benefits, which play a crucial role in determining the overall compensation. The amount of your salary is depends on the industry, gender, age, educational background, location, and type of company.
Here is the summary of the Japanese Ministry of Health, Labour, and Welfare regarding employees' average salary in Japan.
Which industry is the highest-paying?
There are twelve industries surveyed on the data. Education and Research are promising industries, both for men and women. Regardless of gender, those industries are in second and third place of best-paying jobs.
Interestingly, the industry with the highest average salary is different between men and women. For male workers, Finance/Insurance is the best industry. The average wage is ¥479,200 per month. The difference to the number two, Education industry is quite far.
Female workers in the IT and Communication industry hold the highest average salary. The average is ¥315,500 for them. However, the salary gap between industries is not far.
Also Read: How Bonuses Are Calculated In Japan
What things affect wages in Japan?
There are five things: gender, age, educational background, location, and company type. Let's break it down.
Gender
If you see the salary table carefully, you may notice that men in Japan get higher paychecks than women. The average for men is ¥338,800 while women receive much lower at ¥251,800 every month.
Female workers in Japan face societal pressure to prioritize the household and family. On the other hand, daycare facilities in Japan do not meet the demand of working mothers. That is why 44.2% of them work as part-timers and temporary employees, leading to lower income and inability to get a lead position.
However, this situation is slowly changing to encourage gender parity in the workplace. The government made some innovations in labor standards, pay equity, and tax policy. Fathers are encouraged to take parental leave, so the responsibilities at home can be shared.
Japan ranked 116th among 146 countries in the gender gap rankings 2022
Age
Japanese companies tend to value the number of working years. The salary increases periodically, usually once a year. That means the older people get, the higher their wages become.
Seniority matters in Japan
In Japan, the workers' salaries kept going up until they hit the peak in their 50s. Young workers under 19 years old received ¥179,600 on average per month. The number doubled when they hit the peak, with a salary average of ¥368,600 for people aged 55-59.
However, people aged 60 or older have a significantly lower average than the peak. The number is similar to what they make early in their career. The reason is Japanese workers retire at the age of 65 to 70 years old.
Educational background
Educational background and salary in Japan have a positive correlation. Workers with higher education degrees make so much bigger. The effect is more significant for women. The gap in average salary between women with postgraduate degrees and bachelor’s degrees is more than ¥100,000 per month.
People with postgraduate degrees (master or doctoral programs) have the highest salary average. They are followed by bachelor’s degree holders, technical or junior college graduates, vocational school graduates, and high school graduates.
Location
People in urban areas make more than people in the countryside. Tokyo is the political and economic center with the highest salary average in Japan. The second and third highest are Kanagawa and Osaka.
However, the living cost in metropolitan regions is not cheap. Tokyo, Yokohama (located in Kanagawa prefecture), and Osaka are the most expensive cities to live in Japan. Making more money there does not guarantee you are richer than people in other areas in Japan.
Tokyo is one of the most expensive cities in the world
Company Type
Working in Japanese companies or foreign companies in Japan is different. Not only the workspace environment but also the salary determination factors. Employees in foreign companies tend to get higher salaries but with less stability.
In Japanese companies, the salary gradually increases every year. Japanese companies usually have a permanent employment system where employees only work in one place for a long time. After retirement, they will get a pension. That is why the salary is lower than foreign companies, but it’s more stable.
Also Read: Freelancing in Japan as A Foreigner
What to expect if you are working in Japan?
If you work in traditional Japanese companies, the salary when you first start working may not be much because the wages increase periodically. It takes time to reach your ideal numbers. For this reason, working in startups has become popular in Japan. Startups offer competitive salaries based on skills and experiences, not age. However, if you feel stagnant in your career, you can consider moving location or changing industries to get better opportunities.
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