Japanese Subsidy to pay salary to its employees and coronavirus
In this page, I will try to explain information about Subsidy relating to covid-19 in Japan.
If you are operating a business in Japan and sales amount of your business has declined due to covid-19, you may be able to use this subsidy to pay salary to your employees in Japan.
Let’s assumed that Sales amount of your business has declined by five percent or more compared to same month of last year.
Actually it is difficult to sustain your business in this situation and you have decided to suspend your business for a while.
And you will request your employees to stay at their home and not to come to work place.
But when you suspend your business, you still need to pay at least 60% of employee’s average salary.
For your reference, please find this article below.
“Article 26 of Labor standard law of Japan
In the case an absence from work for reasons (Including corona virus) that are attributable to the employer , the employer need to pay an allowance equal to at least 60 percent of the worker’s average salary to each worker relating to period of absence from work.”
So if average daily salary is 10,000 yen, you need to pay at least 6,000 yen to your employees.
I know that it should be difficult for you to pay this amount.
In that case you may be able to apply for this subsidy.
Japanese Government may provide you Subsidy to pay salary to your employees
In order to apply for this Japanese subsidy (雇用調整助成金), you need to have joined employment insurance.
In the case an employee is part time worker, she may not need to join employment insurance.
However you can still use this subsidy for her.
In order to apply for this subsidy, you need to discuss with a representative of employees and prepare 労使協定 (Written agreement between employer and employees) .
And you can make schedule of suspension of your business in advance.
How to calculate amount of Japanese subsidy relating to coronavirus ?
Let’s assumed that Average daily salary of your employee is 10,000 yen
Then, you have decided to pay 80% of such amount as allowance for absence for work.
The number of employees to be absent is 5 persons.
And you have decided that duration of suspension of business is for 10 days.
In this case, 10,000 yen × 80% × 90％ ×５ persons × 10 days = 360,000 yen.
Lke this, you can receive this subsidy (360,000 yen) from Japanese government.
This red percentage differs depending on scale of your business.
In the case of Large company, it is 75% and in the case of Small and medium sized business, it is 90%.
And there are other conditions.
In the case a Large company dismissed some employees, it is 66%.
And in the case a Small and medium sized business operators have dismissed some employees, percentage is 80% .
But you can receive at most 8335 yen per a day.
Yes, there is a limitation and it is terrible.
So let’s assume that Average daily salary is 20,000 yen.
And The number of employees to be absent is 5 persons.
Meaning 5 employees will be suspended from their work.
And you have decided that duration of suspension of business is for 10 days.
And you have decided to pay 60% of such amount as allowance for absence for work.
In this case 20,000 yen × 60% × 90% = 10800 yen though, you can receive only 8335 yen per a day.
So you can receive
8335 yen × 5 persons × 10 days = 416,750 yen as subsidy.
Defect of this Japanese coronavirus subsidy
In order that you apply for this subsidy, you need to pay allowance for absence from work before you receive subsidy.
So at first you need to pay 20,000 yen × 60% × 10 days × 5 persons = 600,000 yen. (Before you receive subsidy)
However it will take several months until you can receive subsidy from Government.
Even if you pay allowance for absence from work, you may not be able to receive subsidy from government.
It should be tough for you.
How to apply for this Japanese coronavirus subsidy ?
In order to apply for this subsidy, you need to fill in many matters (38 items) in application form.
This paper needs to clarify the reason of suspension of business, period, proportion of allowance for absence etc.
You need to make payroll that clarifies amount of suspension allowance.
