Japan's 2026 minimum wage: an increase guideline of 55 yen. What small-business owners should check first

In short: On 28 July 2026, the Central Minimum Wages Council issued a guideline for a national weighted average increase of 55 yen in the 2026 minimum wage. This is not a final figure: if each prefecture raises its rate in line with the guideline (54 yen for Rank A, 56 yen for Ranks B and C), the national weighted average would be 1,176 yen (an increase of 55 yen). The actual amount and effective date differ by prefecture and will be applied in stages from October 2026. What a company should check is not just the "revised amount." When basic pay or hourly pay is actually raised in response to the minimum wage, the effects ripple through the wage table, part-time hourly pay, premium wages, fixed overtime allowance, social insurance, monthly remuneration change report and annual labour costs in that order. This article walks through "what exactly should our company check?"

Some owners think: "The minimum wage is going up by 55 yen, but we already pay a bit more, so it doesn't affect us." That is not necessarily true. Even if you are above the minimum wage, you should check the ripple effects, especially for wages near the minimum wage and for employees whose basic pay you actually revise in response to the change.

How much will the minimum wage rise in 2026?

The minimum wage is set by prefecture under the Minimum Wage Act. Each year, the Ministry of Health, Labour and Welfare's Central Minimum Wages Council issues a "guideline" for the increase, and each prefecture's Regional Minimum Wages Council then decides the actual revised amount.

For 2026, the Council issued a guideline on 28 July 2026 for a national weighted average increase of 55 yen (1,176 yen). The guideline is divided into Ranks A, B and C according to the economic conditions of each region: Rank A is 54 yen, and Ranks B and C are 56 yen. The figure of 1,176 yen is not a final amount; it is the national weighted average if each prefecture raises its rate in line with the guideline.

Rank	Increase guideline
Rank A (Saitama, Chiba, Tokyo, Kanagawa, Aichi, Osaka)	54 yen
Rank B	56 yen
Rank C	56 yen

The actual revised amount and effective date differ by prefecture and will be applied in stages from October 2026. Be sure to check the revised amount and effective date for the prefecture where your workplace is located, in the announcements of the prefectural Labour Bureau and the Ministry of Health, Labour and Welfare.

Separately from the regional minimum wage, an industry-specific minimum wage is set for certain industries. Where both the regional minimum wage and the industry-specific minimum wage apply, you must not fall below the higher of the two.

What will Tokyo's minimum wage be?

In Tokyo, where 四葉社会保険労務士事務所 is located, the current minimum wage is 1,226 yen per hour (effective 3 October 2025). Tokyo is classified in Rank A for the 2026 guideline, and the Central Minimum Wages Council's increase guideline is +54 yen. If revised in line with the guideline, it would be 1,280 yen.

However, 1,280 yen is only a projection "if revised in line with the guideline." The official revised amount and effective date will be fixed by the Tokyo Regional Minimum Wages Council's recommendation and the Tokyo Labour Bureau's announcement. Please check the latest official announcement at the time this article is written and published.

As a concrete example, if you employ part-time or casual workers at 1,250 yen per hour, they are currently above the minimum wage (1,226 yen). But if Tokyo's 2026 minimum wage becomes 1,280 yen, 1,250 yen would fall below the minimum wage and the hourly rate would need to be raised. Check whether your workplace in Tokyo has hourly rates like this "near the minimum wage."

What in your company is affected when the minimum wage rises?

A minimum-wage increase is not just "raising the hourly rate of people below the minimum wage." When you actually raise basic pay or hourly pay in response, the effects ripple through your company's pay, attendance and social insurance in the following order.

Wage table → part-time hourly pay → premium wages → fixed overtime allowance → social insurance → monthly remuneration change report → annual labour costs

Let us go through them in order.

How far should you review the wage table and part-time hourly pay?

First, hourly or monthly pay below the minimum wage must be raised. Even for monthly or daily pay, the minimum wage is judged by converting the amount to an hourly rate (dividing by prescribed working hours). This is not only a matter of hourly pay.

Here, it is important not to simply convert total pay into an hourly rate. When comparing with the minimum wage, the following wages are excluded and the hourly rate is calculated without them.

• Bonuses and other wages paid over a period longer than one month
• Premium wages for overtime, holiday or late-night work (the premium portion)
• Perfect-attendance allowances
• Commuting allowances
• Family allowances

On top of that, check the following:

• How far to raise hourly rates that are just at the minimum wage, in view of hiring and retention
• Consistency between the regular employees' wage table and part-time/casual workers' hourly rates
• Notification to existing employees and reflection in the work rules and wage regulations when the wage table is revised

How to calculate the minimum wage for monthly pay is also explained in the FAQ below. For preparing work rules including wage regulations, see from how many employees are work rules mandatory, and what is not mandatory.

How should you revise fixed overtime allowance and premium wages?

Premium wages are calculated as "hourly wage × hours × premium rate." Overtime is 25% or more, holiday work is 35% or more, and late-night work (10 p.m. to 5 a.m.) adds a further 25%. When you actually raise basic pay or the hourly rate in response to the minimum wage, this "hourly wage" also rises, so the premium wage rate may need to be revised.

Particular care is needed if you use a fixed overtime allowance (deemed overtime). If the amount paid as fixed overtime allowance is below the premium wages for the assumed overtime hours, the difference must be paid. Also, when comparing with the minimum wage, the portion of the fixed overtime allowance corresponding to overtime work is excluded; the basic-pay portion is converted to an hourly rate for the comparison. Use the minimum-wage increase as an opportunity to check the "assumed overtime hours" and "amount" of the fixed overtime allowance, and whether the basic-pay portion is below the minimum wage. The overtime ceiling is set by the Article 36 agreement, so also see how the overtime ceiling is set by the Article 36 agreement, and how far you can ask a Shakai Hoken Roumushi.

How does it affect social insurance and the monthly remuneration change report?

When you raise basic pay or the hourly rate in response to the minimum wage, the "standard monthly remuneration" for social insurance may change. If the fixed remuneration (basic pay or fixed allowances) changes and, based on the following three months' remuneration, the standard monthly remuneration changes by two or more grades, and the requirements for a discretionary revision (monthly remuneration change report) are met, a monthly remuneration change report must be filed. Because there are also requirements such as the number of days serving as the basis for payment, the need must be checked case by case.

Note that the minimum-wage revision and the expansion of social-insurance coverage are separate systems. However, in October 2026 the wage requirement (monthly pay of 88,000 yen or more) for short-time workers to enroll in social insurance is scheduled to be abolished, so the minimum-wage increase and changes in social-insurance eligibility overlap in timing. For social-insurance coverage, see the 1.06 million yen wall is abolished in October 2026 — what a business owner should do; for how enrollment works for short-time employment, see what happens to social insurance when you hire someone for short hours; and for the overall picture of payroll, see how much does it cost to entrust payroll to a Shakai Hoken Roumushi.

How should you estimate the impact on annual labour costs?

In addition to the revised amount, we recommend estimating the impact on annual labour costs. As a guide, consider the wage increase × the number of affected workers × annual working hours, plus the employer's share of social-insurance premiums resulting from the actual wage revision.

The more broadly you revise the wage table, the wider the effect beyond the directly affected workers. Estimating early how much the annual burden will increase — including the employer's share of premiums and the revision of premium wages and the fixed overtime allowance — makes it easier to plan the budget. Tax treatment is the domain of a tax accountant and is not covered in this article.

In the end, what should a business owner check?

Do not stop at just seeing the news about the revised amount; check in the following order.

1. Revised amount and effective date: check the revised amount and effective date for the prefecture where your workplace is located in official announcements (for Tokyo, the official announcement of the Tokyo Labour Bureau)
2. Existence of an industry-specific minimum wage: for covered industries, check the higher of the regional minimum wage and the industry-specific minimum wage
3. Identify workers below the minimum wage: convert hourly, daily and monthly pay to an hourly rate excluding the excluded wages
4. Review the wage table: keep part-time hourly rates, the regular employees' wage table and wage regulations consistent
5. Premium wages and fixed overtime allowance: for workers whose pay you actually raise, check the premium wage rate and the basis for the fixed overtime allowance
6. Social insurance and the monthly remuneration change report: check changes in standard monthly remuneration, whether a monthly remuneration change report is needed, and changes in eligibility
7. Estimate annual labour costs: including the wage increase and the employer's share of social-insurance premiums

What can 四葉社会保険労務士事務所 organise?

The minimum wage is revised every year. Each time, checking the revised amount, converting every worker's pay to an hourly rate while watching for excluded wages, and cross-checking premium wages, fixed overtime allowance, social insurance and the monthly remuneration change report is a considerable burden for an owner. "Knowing the revised amount from the news" and "applying it to your company's pay, attendance, social insurance and labour costs" are different jobs. 四葉社会保険労務士事務所 values organising "which worker's what should be checked, by when, in this company," rather than merely explaining the revision itself. We cross-check the wage table, wage regulations, premium wages and social insurance as follow-up to the regulatory change. The first consultation (up to 60 minutes) is free. For fees, see the fee schedule.

Frequently asked questions

Q. How do I calculate the minimum wage for monthly pay?
A. Divide the monthly pay by the prescribed monthly working hours to convert it to an hourly rate. At that time, exclude bonuses, premium wages for overtime, holiday and late-night work (the premium portion), perfect-attendance allowances, commuting allowances, family allowances and the like. Do not simply convert total pay into an hourly rate.

Q. Can a fixed overtime allowance be counted toward the minimum wage?
A. When comparing with the minimum wage, the portion of the fixed overtime allowance corresponding to overtime work is excluded; the basic-pay portion is converted to an hourly rate for the comparison. If the basic-pay portion is below the minimum wage, the basic pay needs to be raised.

Q. If the minimum wage rises, is a monthly remuneration change report necessary?
A. If, as a result of raising fixed remuneration in response to the minimum wage, the standard monthly remuneration changes by two or more grades based on the following three months' remuneration, and the requirements for a discretionary revision are met, a monthly remuneration change report must be filed. Because there are also requirements such as the number of days serving as the basis for payment, please consult a Shakai Hoken Roumushi for individual judgments.

Q. When and how much will Tokyo's minimum wage become?
A. The current rate is 1,226 yen per hour (effective 3 October 2025). For 2026, the Central Minimum Wages Council's guideline is +54 yen (Rank A), so it would be 1,280 yen if revised in line with the guideline; however, the official revised amount and effective date should be confirmed in the Tokyo Labour Bureau's announcement. The effective date differs by prefecture and will be applied in stages from October 2026.

Sources

• Minimum Wage Act. The minimum wage is set by prefecture and applies by converting any of hourly, daily or monthly pay to an hourly rate. There are a regional minimum wage and an industry-specific minimum wage; where both apply, the higher one applies.
• Wages excluded from the minimum wage: bonuses and other wages paid over a period longer than one month; the premium portion of premium wages for overtime, holiday and late-night work; perfect-attendance allowances; commuting allowances; family allowances; and the like.
• Central Minimum Wages Council, "Guideline for the revision of regional minimum wages for fiscal 2026" (recommendation of 28 July 2026). The national weighted average increase of 55 yen (1,176 yen) is a projection if each prefecture raises its rate in line with the guideline. Rank A 54 yen, Ranks B/C 56 yen.
• Ministry of Health, Labour and Welfare, "Guideline for the revision of regional minimum wages for fiscal 2026" (https://www.mhlw.go.jp/stf/newpage_74920.html).
• Tokyo minimum wage: 1,226 yen per hour (effective 3 October 2025, announced by the Tokyo Labour Bureau). Confirm the official amount and effective date for 2026 in the Tokyo Labour Bureau's announcement.
• Labor Standards Act, Article 37 (premium wages for overtime, holiday and late-night work; overtime 25% or more, holiday 35% or more, late-night 25% or more).
• Discretionary revision (monthly remuneration change report) of social insurance (health insurance and employees' pension insurance). Cases where, after a change in fixed remuneration, the standard monthly remuneration changes by two or more grades based on the following three months' remuneration (subject to requirements such as the number of days serving as the basis for payment).

This article does not decide whom you should consult. Preparing the wage table, wage regulations, premium wages and social-insurance procedures is the work of a Shakai Hoken Roumushi. Tax matters (the tax treatment of wages and year-end adjustment) are the domain of a tax accountant. For fees when consulting 四葉社会保険労務士事務所, see the fee schedule; for frequently asked questions, see the FAQ.

This article is general information. Whether the system applies and whether individual wage revisions or social-insurance procedures are necessary are determined by a qualified professional after a consultation, in light of the latest primary sources (Ministry of Health, Labour and Welfare, prefectural Labour Bureaus, Tokyo Labour Bureau, Japan Pension Service, etc.) and individual circumstances. Written by Joji Uramatsu (Shakai Hoken Roumushi, Gyoseishoshi, Registered Real Estate Transaction Specialist).