Overtime Calculation in Japan: Fixed Overtime Traps and How to Check Your Pay

Information current as of March 2026 based on the Labor Standards Act and MHLW guidelines. Since April 2023, the 50% overtime premium for 60+ hours/month applies to ALL companies including SMEs. For a full overview of your rights, see our guide to foreign workers' rights in Japan.

Overtime rates: what the law requires

Type of work	Rate (of base hourly wage)	Example (base ¥1,500/hr)
Standard overtime (over 8h/day or 40h/week)	125%	¥1,875/hr
Night work (22:00–05:00)	125%	¥1,875/hr
Statutory holiday work (法定休日)	135%	¥2,025/hr
Overtime exceeding 60 hours/month	150%	¥2,250/hr
Standard overtime + night work	150%	¥2,250/hr
Overtime over 60h + night work	175%	¥2,625/hr
Holiday work + night work	160%	¥2,400/hr

Key change (April 2023): The 50% premium for overtime exceeding 60 hours/month now applies to all companies, including SMEs. Previously, only large companies were required to pay this rate.

How to calculate your base hourly wage

Your base hourly wage is the foundation of all overtime calculations. Here's how to calculate it:

Formula: Monthly base salary ÷ average monthly working hours = base hourly wage

Important: "Monthly base salary" excludes these items:

• Commuting allowance (通勤手当)
• Family allowance (家族手当)
• Housing allowance (住宅手当)
• Bonuses paid less than quarterly
• Fixed overtime allowance (固定残業手当) — this must be excluded when calculating the base

Example:

• Monthly salary: ¥300,000 (including ¥50,000 fixed overtime, ¥15,000 commuting)
• Base salary: ¥300,000 – ¥50,000 – ¥15,000 = ¥235,000
• Monthly working hours: 160 hours (8h × 20 days)
• Base hourly wage: ¥235,000 ÷ 160 = ¥1,469/hr
• Overtime rate (125%): ¥1,469 × 1.25 = ¥1,836/hr

Fixed overtime (固定残業代): the 3 tests

固定残業代 (kotei zangyoudai) — also called みなし残業 (minashi zangyou) — is a system where your salary includes a fixed number of overtime hours. It's legal, but only if all three conditions are met:

Test 1: Clear separation (明確区分性)

Your employment contract and pay slip must clearly show:

• Base salary: ¥XXX,XXX
• Fixed overtime allowance: ¥XX,XXX (for XX hours)

Red flag: If your contract just says "monthly salary: ¥300,000 (includes overtime)" without specifying the split, it fails this test.

Test 2: Specified hours and amount

The contract must state the exact number of overtime hours and the yen amount. Example: "Fixed overtime allowance: ¥50,000 for 30 hours."

Red flag: "Overtime included" or "overtime as needed" without a number = illegal.

Test 3: Excess payment obligation

If you work MORE than the fixed hours, your employer MUST pay the difference at the legal overtime rate. This is non-negotiable.

Red flag: Your company says "overtime is capped at 30 hours regardless of actual hours worked" — that's illegal if you actually work more.

5-minute pay slip check

Grab your latest pay slip (給与明細 / kyuuyo meisai) and answer these questions:

1. Is there a separate line for 固定残業手当 or みなし残業手当? If not → your employer may be hiding overtime in the base salary.
2. Does the line show a specific number of hours? (e.g., "30時間分") If not → the arrangement may be invalid.
3. Do the numbers add up? Take the fixed overtime amount ÷ the stated hours. If the result is LESS than your base hourly rate × 1.25, you're being underpaid.
4. Did you work more than the fixed hours this month? Check your time records. If yes, is there an additional overtime line on your pay slip? If not → you're owed money.
5. Does your base salary (after removing fixed overtime) still meet minimum wage? Calculate: (base salary ÷ monthly hours) ≥ your prefecture's minimum wage. If it's below → the arrangement is illegal.

If any answer raises a red flag, you may be owed back pay. The statute of limitations is 3 years from each unpaid pay date. For how to actually recover the money, see our guide to recovering unpaid wages.

The 36 Agreement: does your company even have one?

Under the Labor Standards Act, an employer cannot require ANY overtime without a 36 Agreement (三六協定 / saburoku kyoutei) — a written agreement between the employer and employee representative, filed with the Labor Standards Office.

Even with a 36 Agreement, overtime is capped at:

• 45 hours/month, 360 hours/year (standard)
• 100 hours/month, 720 hours/year (special provision, max 6 months/year)

If your company has no 36 Agreement on file, ALL overtime is illegal. You can check by asking your HR department: 三六協定の届出はありますか？ (Saburoku kyoutei no todokede wa arimasu ka?) — Has the 36 Agreement been filed?

If checking your pay slip or asking HR in Japanese feels risky or overwhelming, that's exactly why I built LO-PAL. Post your question for free — a local helper can review your pay slip, calculate what you're owed, and explain your options without your employer knowing.

Common patterns that underpay foreign workers

• "Service overtime" (サービス残業): Working unpaid overtime because "everyone does it." This is illegal regardless of workplace culture.
• Fake management position (名ばかり管理職): Being given a "manager" title to exempt you from overtime pay. Only genuine 管理監督者 (kanri kantokusha) with real authority are exempt.
• Time record manipulation: Being told to clock out at 18:00 but keep working. Keep your own records (photos of your screen, transit IC card data, emails sent after hours).
• Fixed overtime set absurdly high: "Fixed overtime: 80 hours" built into salary. This is a red flag — 45 hours/month is the standard cap without special provisions.

Related articles

• Foreign Workers' Rights in Japan: What Your Employer Won't Tell You
• How to Recover Unpaid Wages Before 3 Years Run Out
• Wrongfully Fired in Japan? Your Rights and How to Fight Back
• How to File a Complaint at the Labor Standards Office

Get Your Pay Slip Reviewed Confidentially

You shouldn't have to guess whether you're being paid correctly. Post your question on LO-PAL for free — a local helper can review your pay slip and contract, calculate what you're actually owed, and explain your next steps. Completely confidential. You only pay when you accept task help.