Small and midsize employers can seek help with productivity investment as they lift wages. For worksites in Tokyo, Osaka and Saitama, applications are due by Sept. 30.
A short window before October
Japan began taking applications on Sept. 1 for a subsidy that links wage increases to productivity investment. For many small and midsize employers, the window will close before the end of the month.
Applications are due on the earlier of Nov. 30 or the day before a prefecture’s new minimum wage takes effect. Tokyo, Osaka and Saitama will introduce their revised rates on Oct. 1, leaving Sept. 30 as the deadline for worksites in all three.
Tokyo’s hourly floor will climb 54 yen to 1,280 yen. Osaka will raise its rate to 1,231 yen, while Saitama will move to 1,196 yen. Because each prefecture sets its own rate and start date, a company with several locations may face several filing calendars.
The money is for productivity, not payroll
The program does not repay the extra wages. Employers must raise the lowest hourly rate at a worksite by at least 50 yen, then invest in equipment or services expected to make the operation more productive.
Eligible examples include inventory-linked checkout systems, lift-equipped vehicles, consulting to streamline customer flow and digital customer management. Laptops, smartphones and tablets are generally excluded, though an exception may be available to some businesses squeezed by higher input costs or weaker profits.
The unit of application is the worksite — a store, factory or office — rather than the company as a whole. A group operating in several prefectures may therefore need separate calculations and filings for each location.
Why the 6 million-yen headline can mislead
The top award of 6 million yen applies only when at least 10 workers receive an increase of 90 yen or more and the employer meets the program’s special-business conditions. It is a ceiling, not a standard payment.
A worksite with a lowest wage below 1,050 yen can claim 80% of eligible investment; the rate falls to 75% at 1,050 yen or above. The award is whichever is lower: that calculation or the cap set by the wage band, worker count and company size.
The ministry’s example shows how the cap bites. A site paying as little as 1,040 yen raises eight workers by 90 yen and invests 6 million yen. Although 80% of the bill is 4.8 million yen, the grant stops at 4.5 million yen.
Timing can make or break an application
Employers file the wage and investment plans first. The pay increase comes next — after filing, but no later than the day before the new regional minimum wage takes effect. The revised workplace rate must also appear in work rules or an equivalent document.
The investment runs on a different timetable. Subsidized equipment cannot be ordered or installed before the grant decision. Buying early to solve an urgent business need can disqualify a cost that would otherwise have been eligible.
Nor can the required wage increase be broken into several smaller steps. The project must be finished by Jan. 31 of the fiscal year in which the grant is approved, while substantial changes may need the labor bureau’s consent in advance.
Salaried staff are part of the calculation
Japan’s regional minimum wages generally cover workers regardless of title or contract type, from full-time employees to part-timers and temporary staff. Daily and monthly salaries must be translated into an hourly rate.
For salaried staff, the relevant monthly pay is divided by average scheduled hours. Bonuses, overtime and holiday premiums, the premium portion of night work, commuting and family allowances, and attendance bonuses are left out.
The central minimum-wage council recommended an average increase of 55 yen, or 4.9%, for fiscal 2026. If every prefecture matched that benchmark, the national weighted average would reach 1,176 yen. Companies still need to use the legally effective rate in each location.
A higher floor can reshape the pay scale
Raising the legal floor affects more than employees below the new threshold. It can narrow the gap with jobs that carry extra experience, skills or responsibility, pushing employers to revisit the next rungs of the wage ladder.
The effect can spread to overtime rates, recruitment offers and annual labor budgets. A retailer or restaurant that adjusts only its lowest rate may leave experienced staff earning almost the same, creating retention problems even after meeting the law.
That helps explain why the subsidy is tied to equipment and process upgrades. The government shares part of the upfront investment cost; the higher payroll remains a recurring expense for the employer.
The immediate to-do list
Companies should first map the new rate, effective date and filing deadline for every worksite. They then need to identify employees close to the floor, convert daily, monthly and piece-rate pay into hourly terms, and exclude allowances that do not count toward the legal minimum.
A prospective applicant must choose the 50-, 70- or 90-yen track, verify the eligible worker count, collect investment quotes and submit before the local cutoff. Orders for subsidized equipment should wait until the grant decision.
The new rate applies from its effective date even when that date falls midway through a payroll period. Any shortfall should be settled quickly. Failure to pay the regional minimum can carry a fine of as much as 500,000 yen.
Seven checks before filing
- Map the new rate and effective date for every worksite.
- Convert monthly, daily and piece-rate pay into an hourly equivalent.
- Remove bonuses, overtime and excluded allowances from the test.
- Choose a 50-, 70- or 90-yen increase and validate the worker count.
- Prepare investment quotes and file before the local cutoff.
- Do not buy subsidized equipment before the award decision.
- Update work rules, contracts, payroll settings and employee notices.
The grant can reduce an investment bill; it neither delays the wage deadline nor covers recurring payroll. Employers must coordinate compliance with the productivity project.
Official sources
Japan Ministry of Health, Labour and Welfare – FY2026 Business Improvement Subsidy
Japan Ministry of Health, Labour and Welfare – FY2026 subsidy guide
Japan Ministry of Health, Labour and Welfare – FY2026 regional minimum-wage benchmark
Tokyo Labour Bureau – Tokyo minimum wage of 1,280 yen from Oct. 1, 2026
Osaka Labour Bureau – Osaka minimum wage of 1,231 yen from Oct. 1, 2026
Saitama Labour Bureau – Saitama regional minimum wage
Japan minimum-wage portal – Worker coverage
Japan minimum-wage portal – Included and excluded wage items
Japan minimum-wage portal – Hourly conversion and compliance check
Japan minimum-wage portal – Frequently asked questions and penalties
Updated Sept. 4, 2026. This article provides general business and regulatory information. Employers should confirm the applicable rate, deadline and grant conditions with the labor bureau responsible for each worksite.
GTB Holdings