The statutory disability employment rate is now 2.7%. Does it apply to your company, and how many people must you employ?

In short: On 1 July 2026, the statutory employment rate for persons with disabilities at private companies was raised to 2.7%. With this change, the obligation to employ persons with disabilities expanded to employers with 37.5 or more regularly employed workers. However, "37.5 or more" does not mean "pay 50,000 yen per month." The disability employment levy applies in principle to employers with more than 100 regularly employed workers; an employer below the statutory number of persons with disabilities to be employed pays 50,000 yen per month for each worker short of that number. This article walks through the flow of "know 2.7% → confirm whether 37.5 applies → calculate the required number → grasp the gap with the current employment situation → put hiring, the workplace environment and reporting in order," and organizes what a business ultimately needs to check for its own company.

Some owners think, when they hear that the disability employment rate has risen to 2.7%, "this probably doesn't affect us." But whether a company is covered is not decided simply by its headcount. You need to check in order: how to count regularly employed workers, how many persons each person with a disability counts as, and whether the levy or reporting obligations apply.

What changed in July 2026 regarding the disability employment rate?

The statutory employment rate under the Act on Employment Promotion etc. of Persons with Disabilities has been raised in stages for private companies.

Period	Statutory employment rate (private)	Covered employers (regularly employed workers)
Until March 2024	2.3%	43.5 or more
April 2024 – June 2026	2.5%	40.0 or more
From 1 July 2026	2.7%	37.5 or more

From 1 July 2026 the rate became 2.7%, and the scope of covered employers expanded to those with 37.5 or more regularly employed workers. Employers that were previously excluded because they had fewer than 40 workers are now subject to the employment obligation if they have 37.5 or more.

How do you count "37.5 or more employees"?

"37.5" is not a simple headcount. For the disability employment rate, regularly employed workers are counted as follows.

• Workers whose weekly scheduled working hours are 20 hours or more, and who are either (i) employed without a fixed term, or (ii) employed under a fixed-term contract of more than one year (including those expected to be so employed).
• Short-time workers with weekly scheduled working hours of 20 hours or more but less than 30 hours count as 0.5.
• In certain industries, an exclusion rate applies that excludes a certain percentage when counting regularly employed workers.

The exclusion rate was reduced by 10 percentage points for each covered industry from 1 April 2025, and industries whose rate had been 10% or less are no longer subject to the exclusion-rate system. Because it applies only to certain industries, including construction, check the Ministry of Health, Labour and Welfare and Hello Work guidance on whether your industry falls within it.

In other words, part-time and casual workers are included as regularly employed workers if they work 20 hours or more per week and are expected to be employed for more than one year. Conversely, workers with fewer than 20 weekly scheduled working hours are not included as regularly employed workers.

How many does one person with a disability count as?

When calculating the employment situation of persons with disabilities (the actual employment rate), how many each person counts as differs by the type of disability and the weekly scheduled working hours. The treatment as of 2026 is as follows.

Category of person with a disability	30 hours or more	20 to less than 30 hours	10 to less than 20 hours
Person with a severe physical disability or severe intellectual disability	2	1	0.5
Person with a non-severe physical or intellectual disability	1	0.5	Not counted
Person with a mental disability	1	1 (special rule)	0.5

There are three key points.

• A person with a severe physical disability or severe intellectual disability counts as 2 at 30 hours or more, and as 1 even at 20 to less than 30 hours.
• There is no "severe" classification for mental disabilities; a person with a mental disability counts as 1 at 30 hours or more. However, a person with a mental disability at 20 to less than 30 hours counts as 1 under a special rule for the time being.
• A person with a severe physical disability, severe intellectual disability or mental disability working 10 to less than 20 hours per week counts as 0.5 under a special rule (the counting special rule that took effect on 1 April 2024).

Do not simplify this to "any person with a disability counts as one." Confirming the counting method by type of disability, severity and weekly scheduled working hours is the prerequisite for calculating the required number.

How many people must our company employ?

The required number is calculated as "regularly employed workers × statutory employment rate," with the fraction after the decimal point rounded down.

As an example, a company with 120 regularly employed workers calculates 120 × 2.7% = 3.24, which is rounded down to 3 persons as the statutory number of persons with disabilities to be employed.

The difference between the "employment obligation" and the "levy system" by company size can be organized as follows.

Regularly employed workers	Disability employment obligation	Levy, adjustment allowance and incentive payment
40 (example)	Yes (37.5 or more)	Not subject to the levy (100 or fewer). An incentive payment can be applied for if the company employs beyond a certain number
50 (example)	Yes	Same as above
More than 100 (e.g., 120)	Yes	Subject to the levy if below the statutory rate, or the adjustment allowance if above it

Because the actual counting reflects the calculation of regularly employed workers, the exclusion rate and the counting method for persons with disabilities, the table above only shows the structure of the system. Calculate your own company's figures in light of primary sources and after confirmation by a Shakai Hoken Roumushi.

Does "37.5 or more" mean a 50,000 yen levy?

No. It is not the case that "once you reach 37.5 or more, you pay 50,000 yen per month for each person you are short."

The disability employment levy system is a system that adjusts the economic burden among employers that comes with employing persons with disabilities, and promotes the employment of persons with disabilities. The levy applies in principle to employers with more than 100 regularly employed workers.

• Levy: An employer with more than 100 regularly employed workers that is below the statutory number of persons with disabilities to be employed pays 50,000 yen per month for each person short of that number.
• Adjustment allowance: An employer with more than 100 regularly employed workers that employs more than the statutory rate can receive, upon application, 29,000 yen per month for each person employed in excess (the portion for which the number of persons covered exceeds 120 person-months per year is 23,000 yen).
• Incentive payment: An employer with 100 or fewer regularly employed workers that employs beyond a certain number (the larger of the annual total of 4% of the monthly number of regularly employed workers or 72 persons) can receive, upon application, 21,000 yen per month for each person employed in excess (the portion for which the number of persons covered exceeds 420 person-months per year is 16,000 yen).

In short, employers with 100 or fewer workers are in principle not subject to the levy. The levy is not a substitute for the employment obligation; the obligation to employ up to the statutory rate remains with the employer. It is not a system under which "paying the levy means you do not have to employ anyone."

Who must file the disability employment status report, and when?

An employer subject to the disability employment rate must report the employment situation of persons with disabilities as of 1 June each year to the Minister of Health, Labour and Welfare, via Hello Work, by 15 July of that year (Article 43, paragraph 7 of the Act on Employment Promotion etc. of Persons with Disabilities).

After the rate was raised to 2.7% on 1 July 2026, the reporting obligation also covers employers with 37.5 or more regularly employed workers. However, because the report as of 1 June 2026 is made under the pre-increase 2.5% standard (40 or more regularly employed workers), confirm the scope applicable on the reference date in the guidance of the Ministry of Health, Labour and Welfare and Hello Work.

Is it enough just to satisfy the employment rate?

In addition to satisfying the statutory employment rate, employment management and workplace retention after hiring are also important. Filling the number is not the end; preparing an environment in which the employed person with a disability can continue working is part of employment management in practice.

Disability employment should be considered as including retention support after hiring, improvement of the workplace environment, establishment of a consultation system and confirmation of working conditions. Employment that focuses only on the number tends to lead to early turnover, which in turn affects the company's employment rate and workplace stability.

What should you check about work rules, reasonable accommodation and a consultation system before hiring?

Before hiring a person with a disability, we recommend confirming the following three points.

1. Preparation of work rules and working conditions: Check whether provisions on job content, working hours, breaks and leave, and occupational safety and health can accommodate the working style of a person with a disability. For preparing work rules, see from how many employees are work rules mandatory, and what is not mandatory.
2. Provision of reasonable accommodation: The Act on Employment Promotion etc. of Persons with Disabilities obliges employers, in recruitment and hiring (Article 36-2) and after hiring (Article 36-3), to take necessary measures that give consideration to the characteristics of the disability, based on a request from the person with a disability. What accommodation is necessary for each disability characteristic is considered through dialogue with the person concerned, and is not decided uniformly.
3. Consultation system and retention support: Arrange in advance a contact point or person with whom to consult after hiring, and coordination with support organizations as needed.

Regarding reasonable accommodation, the Act for Eliminating Discrimination against Persons with Disabilities also provides for the prohibition of unjust discriminatory treatment and reasonable accommodation for administrative organs and businesses. However, the employment field is governed by the Act on Employment Promotion etc. of Persons with Disabilities, and the Act for Eliminating Discrimination against Persons with Disabilities does not cover the employment field. The obligation of reasonable accommodation by businesses under the Act for Eliminating Discrimination against Persons with Disabilities was made mandatory from 1 April 2024, but this covers fields other than employment (such as the provision of goods and services).

For how to present actual working conditions from the job posting and recruitment stage, also see what must be written in a job posting.

In the end, what should a business check?

Check in the following order.

1. Whether it is covered: Correctly count regularly employed workers and confirm whether the company falls under 37.5 or more.
2. Required number: Calculate the statutory number of persons with disabilities to be employed as "regularly employed workers × 2.7%" (fractions rounded down).
3. Gap with the current employment situation: Count by type of disability, severity and weekly scheduled working hours, and grasp the gap with the current number employed.
4. Levy, adjustment allowance and incentive payment: Confirm which system applies to your company depending on whether it is above or at/below 100 workers.
5. Hiring and workplace environment: Prepare work rules, reasonable accommodation, a consultation system and retention support.
6. Disability employment status report: If covered, do not forget the annual report as of 1 June, by 15 July.

What can 四葉社会保険労務士事務所 organize for you?

Knowing the figure "it has become 2.7%" and counting your own regularly employed workers, calculating the required number, and putting hiring, reporting and the workplace environment into practice are different jobs. 四葉社会保険労務士事務所 values organizing "in this company, who should be counted how, and what should be done by when," rather than merely explaining the regulatory change itself. We organize the calculation of regularly employed workers, the counting of persons with disabilities, the applicability of the levy, adjustment allowance and incentive payment, the disability employment status report, and the preparation of work rules, reasonable accommodation and a consultation system, in light of each company's circumstances. The first consultation (up to 60 minutes) is free. For fees, see the fee schedule.

Frequently asked questions

Q. Which companies are subject to the 2.7% disability employment rate?
A. Employers with 37.5 or more regularly employed workers. Regularly employed workers are workers whose weekly scheduled working hours are 20 hours or more and who are employed (i) without a fixed term or (ii) under a fixed-term contract of more than one year (including those expected to be so employed). Short-time workers (20 to less than 30 hours) count as 0.5, and an exclusion rate applies in certain industries.

Q. If we reach 37.5 or more, do we have to pay the 50,000 yen levy?
A. No. The disability employment levy applies in principle to employers with more than 100 regularly employed workers. An employer below the statutory number of persons with disabilities to be employed pays 50,000 yen per month for each person short of that number. Employers with 100 or fewer workers are in principle not subject to the levy.

Q. How many does one person with a disability count as?
A. It differs by type of disability, severity and weekly scheduled working hours. A person with a severe physical or severe intellectual disability counts as 2 at 30 hours or more, 1 at 20 to less than 30 hours, and 0.5 at 10 to less than 20 hours. A person with a mental disability counts as 1 at 30 hours or more, 1 (special rule) at 20 to less than 30 hours, and 0.5 at 10 to less than 20 hours. A person with a non-severe physical or intellectual disability counts as 0.5 at 20 to less than 30 hours.

Q. By when must the disability employment status report be filed?
A. Report the employment situation of persons with disabilities as of 1 June each year to the Minister of Health, Labour and Welfare, via Hello Work, by 15 July of that year. After the 2.7% rate took effect in July 2026, the scope covers employers with 37.5 or more regularly employed workers.

Sources

• Act on Employment Promotion etc. of Persons with Disabilities. The statutory employment rate for private companies is 2.7% from 1 July 2026 (previously 2.5%). Covered employers are those with 37.5 or more regularly employed workers (after 2.7% applies).
• Counting of regularly employed workers: workers with 20 or more weekly scheduled working hours who are employed without a fixed term or under a fixed-term contract of more than one year (including those expected to be so employed). Short-time workers (20 to less than 30 hours) count as 0.5. An exclusion rate applies in certain industries (reduced by 10 percentage points each from 1 April 2025; those at 10% or less are no longer covered).
• Counting of persons with disabilities: persons with severe physical/severe intellectual disabilities count as 2 at 30 hours or more, 1 at 20 to less than 30 hours, and 0.5 at 10 to less than 20 hours. Persons with non-severe physical/intellectual disabilities count as 1 at 30 hours or more and 0.5 at 20 to less than 30 hours. Persons with mental disabilities count as 1 at 30 hours or more, 1 (special rule) at 20 to less than 30 hours, and 0.5 at 10 to less than 20 hours (the counting special rule that took effect on 1 April 2024).
• Act on Employment Promotion etc. of Persons with Disabilities, Article 36-2 (recruitment and hiring) and Article 36-3 (after hiring): the obligation to provide reasonable accommodation (effective April 2016).
• Act for Eliminating Discrimination against Persons with Disabilities. Reasonable accommodation by businesses was made mandatory from 1 April 2024 (the employment field is governed by the Act on Employment Promotion etc. of Persons with Disabilities).
• Act on Employment Promotion etc. of Persons with Disabilities, Article 43, paragraph 7 (disability employment status report; report as of 1 June each year by 15 July).
• Disability employment levy system (JEED): the levy is 50,000 yen per person short per month for employers with more than 100 regular workers. The adjustment allowance is 29,000 yen per person in excess per month for employers with more than 100 workers. The incentive payment is 21,000 yen per person in excess per month for employers with 100 or fewer workers.
• Ministry of Health, Labour and Welfare, "For employers (disability employment rate)" (https://www.mhlw.go.jp/stf/seisakunitsuite/bunya/koyou_roudou/koyou/jigyounushi/page10.html).
• Japan Organization for Employment of the Elderly, Persons with Disabilities and Job Seekers (JEED), "Overview of the disability employment levy system" (https://www.jeed.go.jp/disability/about_levy_grant_system.html).

This article does not decide whom you should consult. Calculating the disability employment rate, the applicability of the levy, adjustment allowance and incentive payment, the disability employment status report, and the preparation of work rules, reasonable accommodation and a consultation system are the work of a Shakai Hoken Roumushi. 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 the necessity of your own calculations or procedures are determined by a qualified professional after a consultation, in light of the latest primary sources (Ministry of Health, Labour and Welfare, Hello Work, JEED, etc.) and individual circumstances. Written by Joji Uramatsu (Shakai Hoken Roumushi, Gyoseishoshi, Registered Real Estate Transaction Specialist).