For international developers, one often confusing aspect of Japanese employment is their company’s overtime policy. Overtime is tightly regulated in Japan, with new laws introduced in 2019 to reduce the overall number of overtime hours worked. In addition to regular overtime, many work contracts include fixed overtime hours (みなし残業, minashi zangyou), which is a fixed amount of overtime that is paid for as part of an employee’s monthly salary.
Though fixed overtime is standard in Japan, it’s an unusual arrangement by international standards. Developers from overseas are often uncertain how overtime in Japan works, what fixed overtime means for their schedules and compensation, and what their company’s actual expectations are. This article will answer typical questions, including:
- What are Japan’s laws on overtime?
- What about flextime?
- How much do you get paid for overtime?
- Am I eligible for overtime pay?
- How does fixed overtime (minashi zangyo) work?
- Is fixed overtime unfair?
- Why do Japanese companies include this in their contracts?
- How common is overtime for developers in Japan?
Japan’s laws on overtime
The basics
According to Japan’s Labour Standards Act, overtime is defined as any work that exceeds 40 hours a week or 8 hours a day, excluding break periods. By law companies in Japan must provide a 45-minute break for employees during working hours if they’re working more than 6 hours at a time, and an hour-long break period if working hours exceed 8 hours. Practically speaking, this means most full-time work days are 9 hours with an hour off for lunch.
Employers are also obligated to provide one full day off a week, or four days off or more within a four-week period. These are legal minimums—TokyoDev found in its 2022 survey that 97% of permanent employees worked five days a week, and that 97% of all respondents got national holidays off. Work performed on statutory days off, though, is compensated at a higher rate.
Having established regular work hours in principle, the Labour Standards Act then explains in detail a number of exceptions: different industries, flextime, natural disasters, etc.
What is a 36 Agreement?
What’s important to know is that employers should not ask employees to work overtime unless they have already established a written agreement on overtime rules with the majority of employees, and filed it with the appropriate government agency. This is often called a “36 Agreement,” referring to Article 36 in the Labour Standards Act, and it should be displayed prominently in the workplace or otherwise made readily available to employees.
Even then, employers must abide by the following limits (not a comprehensive list):
- The period of special extended overtime can’t exceed six months in a year
- No more than 720 hours overtime in a year
- No more than 100 hours overtime in a month
Flextime
As mentioned earlier, Japanese labour law specifies a number of systematic exceptions to the work hours limit, including annual modified working hours, monthly modified working hours, and flextime. The last one is most likely to be relevant to developers.
Flextime is more strictly defined in Japan than elsewhere in the world, and is often mistaken for the discretionary labour system, but is not the same. The biggest difference is that flextime is considered a temporary and limited arrangement rather than an ongoing policy. If flextime will be instituted for a period of longer than one month, then a labour-management agreement must be filed with the relevant government agency.
Workers in a flextime arrangement must work a preestablished number of hours during a fixed period of up to three months; the agreed-upon number of hours cannot exceed an average of 40 hours a week, or 44 in special cases. So long as employees work the total number of hours, they can choose (within limits) when to begin and end work. This means that employees can’t automatically claim overtime for days in which they worked more than 8 hours, or weeks in which they worked more than 40 hours, because they control the timing of their workdays.
Nonetheless, if overtime does occur—that is, if employees are working more than an average of 40 hours a week during the specified period—a company must also have a 36 Agreement in place.
Rates of overtime pay
The government-mandated rates for overtime and other off-hours work are as follows:
| Category | Percentage of increase |
|---|---|
| 1. Work in excess of statutory working hours | 25% |
| 2. Work in excess of statutory working hours that exceeds 60 hours in a month* | 50% |
| 3. Work on statutory days off | 35% |
| 4. Work late at night, defined as between 10 p.m. and 5 a.m. | 25% |
| 5. Work late at night that is also in excess of statutory working hours | 50% |
| 6. Work late at night that is also in excess of statutory working hours exceeding 60 hours in a month* | 75% |
| 7. Work late at night on statutory days off | 60% |
| * Employers are also sometimes allowed to offer paid leave in lieu of higher wages for overtime work that falls under category two or category six, but only if that’s specified in the company’s 36 Agreement. |
Exempted employees
High-level professionals, managers, and those working under the discretionary labour system are exempt from overtime rules, but those categories are narrowly defined.
High-level professionals
This label applies only to workers who are engaged in financial consultations or research and development, and they must have an annual salary of 10.75 million yen or more.
High-level professionals of this nature are exempt from most labour standards regulation on working time, including overtime payments, holidays, and late-night premium wages. Employers must still provide 104 days off per year and ensure employee health and welfare measures are in place. Each employee must consent to being exempted from overtime, and that consent can be withdrawn at any time.
Managers
Managers and supervisors, and also those handling confidential administrative work who are closely involved in management, are exempted from overtime rules, with the exception of regulations on late-night work. This does not apply to everyone with “manager” or “supervisor” in their job title, though. For the purposes of labour law, managers are defined as follows:
- Someone who has the authority and status of a manager or supervisor, regardless of their job title
- Someone whose responsibilities to the company cannot be performed solely during regular office hours
- Someone who works in an integrated position with the business owner—in other words, they have access to the highest levels of the company and input into the company’s decision-making processes
- Someone who is paid appropriately for the extra responsibility, and who receives more in salary, bonuses, allowances etc. than employees who are not managers/supervisors
Rather infamously, in 2008 McDonald’s in Japan was sued by a restaurant manager for two years of overtime pay. His argument was that he was a manager in name only, and was not being sufficiently compensated for the loss of his ability to claim overtime pay.
The court agreed, finding that, while a restaurant manager for McDonald’s assumed responsibility for that particular restaurant, the manager could in no way be described as holding authority in an “integrated position” with McDonalds’ executives. In addition, there was nothing about the duties of a restaurant manager that were incompatible with them being carried out during regular working hours, and the salary was not different enough from other employees to be considered sufficient compensation.
The discretionary labour system
Those working under the discretionary labour system, as many developers do, aren’t exempt from overtime payments. However, their normal working system does make overtime difficult to claim. In this system—which is loosely equivalent to being a salaried employee in other countries—employees agree in advance to being compensated according to a “deemed” number of hours. If the agreement is that employees will be paid for 8 hours a day, then whether they work 6 hours or 10 hours, they are paid the same amount. Under these circumstances, employees can’t, for example, claim overtime for the 10-hour day.
The exception is if the deemed number of hours already exceeds statutory work hours. If, in the labour-management agreement, the deemed number of hours is more than 8 hours a day or 40 hours a week, then the company must pay those excess hours at the accepted overtime rates.
What is fixed overtime?
It’s easy to see how quickly overtime can become expensive for a business, or how even a well-meaning company could run afoul of the Labour Standards Act. Partially to prevent this, many companies include fixed overtime hours in their contracts.
Basically, fixed overtime is a company’s contractual agreement with employees to include in their regular work schedules a certain number of overtime hours in a month, often between 20 and 45 (which is the normal maximum upper limit).
Is fixed overtime unfair?
This arrangement is unusual by international standards, and workers from abroad often fall into two camps: they either see this fixed overtime pay as extra money for hours they may not have to work, or they complain about working overtime for “free” because they don’t see any difference in their monthly paychecks.
How much of the fixed overtime written into your contract you will actually have to work boils down to company culture. Some companies hardly ever call for overtime. Other companies will insist you work every minute. The best way to find out which way a company leans is to speak with current or former employees, before you sign the contract.
It may be the case that you won’t work an additional 45 hours every month—in fact it’s quite likely you won’t. If you ensure that you are satisfied with your compensation even with the fixed overtime included, though, you won’t feel cheated if and when your company does require you to work those hours.
Why do Japanese companies use fixed overtime?
Japanese companies include fixed overtime into their contracts for several reasons. First, as mentioned earlier, it allows them to remain compliant with the Labour Standards Act and their own 36 Agreement. Second, it helps them avoid administrative overhead in calculating individual employees’ overtime hours and pay. Automating a certain amount of overtime pay for everyone simply makes things easier.
How common is overtime for developers in Japan?
The amount of overtime worked in Japan has decreased significantly since the 1990s, when the average annual number of working hours hovered around 1900. In 2023, workers in Japan averaged 1636 annual work hours.
In terms of IT professionals specifically, the Ministry of Health, Labour, and Welfare tracks the average working hours in their monthly labour reports. From January to October of 2025, employees in the Information and Communications industry worked on average between 147 and 167 hours total per month, or between 36 and 42 hours a week. These findings are similar to TokyoDev’s.
We also conducted a quick survey on fixed overtime in the TokyoDev Discord. Most international developers in the TokyoDev community do have fixed overtime written into their contract, but do not work that overtime.
Out of 295 respondents:
- 49% had fixed overtime pay written into their contracts, but usually worked no overtime.
- 15% had fixed overtime pay, and usually worked overtime.
- 21% had no fixed overtime pay, and usually didn’t work overtime.
- 10% had no fixed overtime pay, and usually did work overtime.
- 5% weren’t sure.
Clearly, whether a company has fixed overtime hours is not the best indicator of whether those hours will be required. As mentioned earlier, it’s better to try and speak with current or former employees of that company to learn more about their typical work schedules.
Conclusion
Overtime is still a fact of life at many companies, but the Japanese government has gone to considerable lengths to limit overtime hours and create new employee protections. The Work Style Reform Act, however, is barely five years old. It may take more time to change prevailing cultural norms as well as the law.
That being said, international developers in Japan do not, on average, work much overtime. This is true even of employees whose contracts include fixed overtime.
If you want additional input and information from other developers in Japan, check out the TokyoDev Discord.
