On this page (7 sections)
Overview and why companies expand from Japan to Australia
- Japan and Australia have deep trade and investment ties, especially in energy, resources, food and financial services.
- The Japan-Australia Economic Partnership Agreement supports investment and business mobility.
- Australian business hours are close to Japan's, so teams can work together in real time.
- Australia is a base for Japanese firms serving Oceania and parts of South-East Asia.
Japanese employers moving into Australia often find the system more flexible on dismissal but more prescriptive on minimum conditions. Australian employees expect career mobility, clear job descriptions and work-life balance backed by statutory leave and the right to disconnect.
Japan and Australia at a glance
| Topic | Japan | Australia |
|---|---|---|
| Employment contracts | Employers must give a written notice of working conditions at hiring, including wages, hours, place of work and the scope of any changes. Many employers also have rules of employment that must be filed with the labour office once they have 10 or more employees. | A written contract is not legally required but is standard practice. Employers must give every new employee the Fair Work Information Statement, plus the Casual or Fixed Term Contract Information Statement where relevant. A modern award or enterprise agreement usually sets minimum terms. Fixed-term contracts are generally limited to 2 years or 2 consecutive contracts. |
| Probation | Probation of 3 to 6 months is common. It does not remove dismissal protection, although employees dismissed in the first 14 days are not entitled to notice. | No statutory probation. In practice the unfair dismissal "minimum employment period" works as one: 6 months, or 12 months for small businesses with fewer than 15 employees. |
| Working hours | Statutory limit of 8 hours a day and 40 hours a week. Overtime needs a written labour-management agreement (a "36 agreement") and is capped, generally at 45 hours a month and 360 a year. | Maximum 38 ordinary hours a week plus reasonable additional hours under the National Employment Standards. Awards set overtime rates. Employees have a right to disconnect outside working hours unless refusing is unreasonable. |
| Minimum wage | Set by prefecture. The national weighted average for FY2025 is ¥1,121 an hour, with each prefecture's new rate taking effect between late 2025 and early 2026. | National Minimum Wage of $26.44 an hour ($1,004.90 a week) from 1 July 2026. Most employees are covered by a modern award with higher minimum rates for their classification. |
| Annual leave | 10 days after 6 months of service, rising to 20 days after 6.5 years. Employers must make sure staff entitled to 10 or more days take at least 5 each year. | 4 weeks paid annual leave a year for full-time employees (5 weeks for some shift workers), accruing progressively. Untaken leave is paid out on termination. Many awards add a 17.5% leave loading. |
| Sick leave | No statutory paid sick leave. Health insurance pays a sickness allowance of about two-thirds of pay from the fourth day off work. | 10 days paid personal/carer's leave a year for full-time employees, plus 2 days unpaid carer's leave and 2 days paid compassionate leave per occasion. All employees can also take 10 days paid family and domestic violence leave a year. |
| Parental leave | Maternity leave of 6 weeks before and 8 weeks after birth. Childcare leave until the child turns 1 (extendable to 2), with benefits paid by Employment Insurance rather than the employer. | Up to 12 months unpaid parental leave after 12 months of service, with the right to request 12 more. The government funds up to 26 weeks of Parental Leave Pay at the national minimum wage from 1 July 2026, paid through Services Australia rather than the employer. |
| Public holidays | 16 national holidays. Employers are not legally required to make them paid days off. | National public holidays such as New Year's Day, Australia Day, Good Friday, Easter Monday, Anzac Day, Christmas Day and Boxing Day, plus state and territory holidays. Employees who work on a public holiday are usually paid penalty rates under their award. |
| Retirement and social security | Employees' Pension Insurance at 18.3% of standard monthly remuneration, split equally. Health insurance (the rate depends on the prefecture and insurer), employment insurance and workers' accident insurance are also compulsory. | Superannuation Guarantee of 12% of qualifying earnings, paid by the employer on top of wages. Since 1 July 2026 super must be paid each payday and reach the fund within 7 business days (Payday Super). There is no separate employer social security levy. |
| Payroll taxes | Employers withhold income tax and local resident tax and complete a year-end tax adjustment for employees. | Employers withhold PAYG income tax from wages. Each state and territory charges payroll tax once total Australian wages pass a threshold, for example 5.45% above $1.2 million in NSW and 4.85% above $1 million in Victoria. Workers' compensation premiums are also payable. |
| Notice periods | At least 30 days notice of dismissal or pay in lieu. | Employer notice under the National Employment Standards: 1 week (up to 1 year of service) rising to 4 weeks (over 5 years), plus 1 week if the employee is over 45 with at least 2 years of service. Pay in lieu is allowed. Awards set employee notice. |
| Dismissal protection | A dismissal is void unless it is objectively reasonable and socially appropriate under the Labour Contract Act. In practice dismissal is hard, so negotiated exits are common. | Unfair dismissal protection applies after the minimum employment period to employees covered by an award or agreement, or earning under the high income threshold of $190,100 (from 1 July 2026). General protections against adverse action apply from day one. Small businesses can follow the Small Business Fair Dismissal Code. |
| Severance | No statutory severance. Retirement allowances and negotiated packages are customary. | Statutory redundancy pay of 4 weeks (1 to 2 years of service) rising to 16 weeks (9 to 10 years), then 12 weeks at 10 years or more, when long service leave usually takes over. Small businesses with fewer than 15 employees are generally exempt. |
| Mandatory benefits | Social and labour insurance enrolment and annual health checks are mandatory. Commuting allowances are customary rather than required. | Superannuation, workers' compensation insurance (state-based and compulsory), paid leave under the National Employment Standards and long service leave under state and territory laws, usually after 7 to 10 years of service. |
| IP and restraint clauses | Non-competes are enforced only if reasonable in scope, usually with compensation. Employee inventions are covered by the Patent Act, which requires reasonable remuneration. | Post-employment restraints are only enforceable if reasonable to protect a legitimate business interest. Employers generally own IP that employees create in the course of employment. The federal government has proposed banning non-compete clauses for employees under the high income threshold from 2027; this was not law at the last review. |
| Visas and right to work | Foreign professionals usually need a status of residence such as Engineer/Specialist in Humanities/International Services, sponsored by the employer. Australians aged 18 to 30 can apply for a working holiday visa. | Every worker needs Australian work rights, which employers can check through VEVO. Sponsored skilled hires generally use the Skills in Demand (subclass 482) visa, which needs an approved sponsor. Some EORs can sponsor, many cannot. |
The differences that matter most
Mobility and job roles
Australian employment is usually tied to a defined role rather than general membership of the company. Transfers, rotations and role changes generally need the employee's agreement or a clear contractual basis.
Overtime and hours
Australia's standard is 38 ordinary hours a week plus reasonable additional hours. Award-covered employees are paid overtime and penalty rates. The right to disconnect protects employees who refuse unreasonable contact outside their hours, which matters when head office is in a different time zone.
Leave from day one
Australian annual leave accrues from the first day of employment, at 4 weeks a year for full-time employees, and paid personal/carer's leave of 10 days a year is a statutory right. Japan's annual leave starts after 6 months at 10 days.
Super instead of social insurance
Australian employers pay 12% super each payday. There are no employer health or pension insurance contributions, because health care is covered by Medicare and the age pension is funded from general taxation.
Dismissal
Australia doesn't apply Japan's strict test of social appropriateness, but unfair dismissal protection, general protections and redundancy obligations mean a documented, fair process is still essential.
Common compliance traps
- Expecting unpaid overtime as part of salaried roles without checking award coverage.
- Moving employees between roles or cities without agreement.
- Missing super or treating it as part of salary without clear agreement.
- Late-night calls with Tokyo that conflict with the right to disconnect.
- Visa compliance for secondees, including sponsorship obligations.
How an EOR works for Japanese companies in Australia
An Australian EOR employs your hire under a local contract, sets the award classification, runs payroll with PAYG withholding, pays super each payday and holds workers' compensation insurance. You manage the work and pay one invoice, often in JPY or USD. Larger operations usually move to an Australian subsidiary. See EOR vs setting up an Australian entity.
Frequently asked questions
Is lifetime employment common in Australia?
No. Australian employees typically change employers several times in their careers, and there is no tradition of lifetime employment or seniority-based pay. Retention depends on pay, development and flexibility.
How do overtime rules compare?
Japan requires a labour-management agreement (36 agreement) for overtime and caps it. Australia allows reasonable additional hours beyond 38 a week, and modern awards set overtime rates for covered employees. The right to disconnect also applies outside working hours.
Is dismissal harder in Japan or Australia?
Generally harder in Japan, where dismissals must be objectively reasonable and socially appropriate. In Australia, employers can dismiss with notice for a valid reason after a fair process, but employees who have served the minimum employment period can challenge unfair dismissals.
Do Australian employees get paid sick leave?
Yes. Full-time employees get 10 days of paid personal/carer's leave a year. Japan has no statutory paid sick leave, relying on health insurance sickness allowances.
Can we second Japanese staff to Australia?
Seconded staff need an Australian visa with work rights. Depending on the role and length of stay, the Skills in Demand visa (subclass 482) may apply. Australia and Japan also have a social security agreement that can affect pension contributions for seconded staff.
Sources
Last reviewed:
Figures on this page were checked against these official sources on 8 October 2026. Rates and thresholds change, often on 1 January, 1 April or 1 July, so confirm current figures before relying on them.
- DFAT: Japan-Australia Economic Partnership Agreement
- Ministry of Health, Labour and Welfare: Labour standards for foreign workers
- Ministry of Health, Labour and Welfare: Minimum wages
- Japanese Law Translation database
- Japan Pension Service
- Immigration Services Agency of Japan
- Fair Work Ombudsman: National Employment Standards
- Fair Work Ombudsman: Annual Wage Review 2026
- Fair Work Ombudsman: Fair Work Information Statement
- Fair Work Ombudsman: Dismissal and notice
- Fair Work Ombudsman: Redundancy pay
- Fair Work Ombudsman: Unfair dismissal
- Fair Work Ombudsman: Right to disconnect
- ATO: Payday Super
- Services Australia: Parental Leave Pay
- Revenue NSW: Payroll tax
- State Revenue Office Victoria: Payroll tax
- Department of Home Affairs: Skills in Demand visa (subclass 482)
Related guides
New to the model? Start with what an Employer of Record is, then compareEOR costs and pricing models.