PKF Shiodome Partners

PKF Japan | Accounting , Tax , Payroll and Incorporation


Payroll Management and Employee-related Services

Payroll management and employee-related services

PKF 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 include:

• 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

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) Corporate regulations relating to expats

Below are examples of transfer allowances for expats:

・Livelihood Allowance
Housing allowance, Family allowance, Education (Childcare) allowance, and Commuting allowance are common to support the life as an overseas employee.

・Hardship Allowance
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, and at the occasion of unaccompanied assignment.

・Overseas Position Allowance
This allowance is commonly referred to as a managerial allowance or overseas allowance.

Contact us

If you need expert assistance with organizing payroll and employee matters, we can help. To schedule a consultation, you can contact us at [email protected], call our Tokyo office at 81-3-6228-4162, or submit a Contact Request Form at your convenience.

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