Are you always guaranteed to receive a bonus (Shoyo) in Japan?
The answer is no.
Are You Always Guaranteed to Receive a Bonus (Shoyo)?
Companies in Japan are not legally obligated to pay bonuses.
That said, according to a survey by Teikoku Databank on winter bonuses in 2025, around 80% of companies do provide bonuses. While there are no precise statistics regarding satisfaction levels, it appears that a significant number of companies are unable to pay bonuses at a level employees feel is sufficient.
Public servants, on the other hand, do receive bonuses as a rule.
Japan’s Unique Bonus System
The bonus system in Japan is quite different from those in the United States and Europe. While performance-based bonuses do exist in Western countries, a fixed, regular bonus system that is built into household financial planning—like in Japan—is relatively rare.
In Japan, base salaries tend to be lower, with compensation supplemented by bonuses paid in summer and winter. In many cases, bonuses total four to five months’ worth of salary per year. Summer bonuses are often paid in July, while winter bonuses are typically paid in December.
Historically, bonuses are said to have originated in the Meiji era, when Yataro Iwasaki, founder of the Mitsubishi Group, paid extra compensation to his employees. During Japan’s period of rapid economic growth (from around 1955), bonuses became widespread through labor union negotiations. As noted earlier, bonuses are not mandated by law, but are instead a long-standing business custom.
Bonus Amounts Vary Widely
As this is a uniquely Japanese system, bonus amounts vary greatly by company and industry. According to a Keidanren survey, the average winter bonus at large companies in 2025 was approximately ¥1,000,000. Well-performing small and medium-sized enterprises reportedly paid around ¥500,000.
In practical terms, this suggests that:
- Large companies may pay around ¥2,000,000 per year
- Successful SMEs may pay around ¥1,000,000 per year
- Other companies often fall around ¥800,000 per year
Bonuses Are Also Subject to Taxes and Deductions
Bonuses are treated as lump-sum income, and social insurance premiums (health insurance, pension, and employment insurance) as well as income tax are deducted. The exact amount depends on the bonus size, but take-home pay is typically around 75% to 85% of the gross amount.
Whether You Receive a Bonus Can Significantly Affect Your Life
The presence or absence of bonuses can create a difference of around ¥1,000,000 in annual income, which can have a major impact on daily life.
Even if employees ask for bonuses at a company that does not offer them, the company is under no obligation to pay. For this reason, whether a company pays bonuses is an important factor to consider when choosing an employer.
If you are considering working for a Japanese company, it is wise to check whether bonuses are offered before accepting a position.
Hajime’s Note
The company I currently help does not pay bonuses, and perhaps because of that, it has a high turnover rate. I believe it is difficult to maintain motivation when there is an imbalance between job satisfaction and compensation. When looking for work, why not seek a position where both income and fulfillment feel reasonably balanced?
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