As companies get globalized, it is not uncommon to see Japanese working abroad, or foreigners working in Japan. There is no difference between the two groups as long as they are getting paid for their work. However, calculation of their payroll depends on where they are working because the tax systems of each country are different. Although it depends on how big the company is, various ways are used to calculate payments which are: using accounting software, pass the operation to the Labor and Social Security Attorney, or outsourcing the whole operation.
Now, let’s see how Japanese accounting and outsourcing work.
The complicated Japanese payroll accounting
When we say “payroll accounting”, people think it is very simple as we just pay the payroll to the employees. However in reality, all the employees have different conditions and salary terms which is very complicated until the payment is confirmed.
1. Maintenance of employees information
2. Aggregation of various allowances and attendance data
3. Calculate social insurance premiums, tax, deductions, etc. and create payslips
4. Pay employees and complete payment of taxes and insurance premiums.
The features of Japanese payroll processing
Payroll operations include not only monthly salary but also bonuses several times a year, year-end adjustments, revisions and updates to social insurance premiums, and update of inhabitant tax. In the companies where payroll is calculated in-house, the human resources department and accounting department are often in charge. However, due to the complexity of the work, it is also true that more and more companies are outsourcing payroll accounting.
Maintenance of employees information
Maintain employee information which is the source of payroll data. It is necessary to prepare data such as information of entry and withdrawal of the company, transfer, raises, family structure leading to deductions for family dependents, and information of social insurance. The more employees you have, the more complicated the task will be.
Aggregation of various allowances and attendance data
The actual salary paid to the employee is the basic salary stipulated in the employment contract and work regulations, plus overtime and various allowances. Then deductions are made, such as social insurance premiums, employment insurance premiums, income tax and inhabitant tax.
Therefore, we calculate total overtime pay and various allowances first.
Break down of payment
1. Basic salary
3. Allowance (Residence allowance or commuting allowance etc.)
The deduction amount is roughly divided into the following four categories, and the deducted amount is paid to the pension office or tax office.
1. Social insurance premiums
2. Employment insurance premiums
3. Income tax
4. Inhabitant tax
For income tax, submit the approximate amount to the tax office in advance and adjust the difference by year-end adjustment.
In addition, the Labor Standards Law requires that a wage ledger that describes the payment status of employees’ salaries be created and stored.
Pay employees and pay taxes and insurance
The fixed salary will be paid to the employee on the specific date.
Taxes such as income tax and inhabitant tax must be paid to the tax office on the 10th day of the month following the payment of salary, and social insurance must be paid by the end of the month based on the delivery notice.
You can outsource payroll!
Payroll is complicated work, so if you spend too much time on it, you will not be able to focus on your main business. Therefore, companies are starting to outsource payroll accounting.
Labor and Social Security Attorney
Labor and Social Security Attorneys have the knowledge that is indispensable for payroll operations. This is because they are familiar with the labor laws and regulations necessary to calculate overtime pay, and have the ability to read labor rules and labor-management agreements.
They are also constantly updating their knowledge of how to calculate employment insurance premiums, health insurance premiums, and welfare pension insurance premiums.
There is no doubt that outsourcing companies that have legally strong labor and social security attorneys can be reliable.
Abundant staff members
Since payroll operations must be punctual to follow deadlines, it is important to avoid having only one person in charge and being unable to respond due to unforeseen circumstances. It is desirable to have abundant staff members who can handle it.
Even if there is a lot of staff, if each member does not understand what to do, it is hard to count them in the head. If the work flow is visualized, and if each of the tasks are understandable, you have enough manpower to handle.
What is “Mamasan&Company”?
Mamasan&Company has about 400 workers working from home all over the world.
Each of them works from home, but since they work through virtual desktops, security measures are perfect. Among the workers, there are workers with various skills such as labor and social security attorneys and those who are fluent in English.
Mamasan & Company has many workers living not only in Japan but also overseas and we have bilingual staffs all over the world. We have a multilingual team that can handle projects other than Japanese. We have a track record of responding to inquiries from overseas.
Thanks to the teleworkers enrolled from all over the world, we made it possible to work efficiently by using the time differences. Workers in Japan are in charge of daytime work. And not only Japanese workers but also overseas workers are in charge of nighttime work. It is possible to work 24 hours a day and respond quickly.
A major feature of Mamasan&Company is the visualization of all operations. A flowchart is created for each case so that you can see the big picture. In addition, since the work is divided into small parts and manuals are created for each, even if a worker has never been involved in a certain task, the work can be done with the same quality.
You can rely on Mamasan&Company for payroll
It is difficult to have payroll processing in-house, which is a complicated task and poses a legal risk if you make a mistake. It is effective to ask an outsourcing company that you can trust in order to focus on your main business and improve work efficiency. Mamasan&Company has reliable labor and social security attorneys, and many workers work all over the world. We contract from, not only from all the payroll accounting, but also from a part of the operation. Why not contact us?