How overtime works in Japan

In Japan, overtime is governed by a single national statute — the Labour Standards Act(労働基準法, the “LSA”). It fixes one nationwide floor of premium rates that applies to every employer, with no separate layer of industry-by-industry awards setting different rates. An individual contract, collective agreement or set of work rules can pay more, but never less.

Before any overtime can be worked at all, the employer must have a “36 Agreement” (三六協定, saburoku kyōtei) — a written labour-management agreement concluded under LSA Article 36 with the majority union or an elected employee representative, and filed with the Labour Standards Inspection Office. The 36 Agreement is what makes overtime lawful at all. Since a 2019 reform, the ceiling it can set is no longer just a matter of negotiation between employer and employee representative — the Act itself now fixes a hard, criminally enforced upper limit on how much overtime may be worked, covered next, on top of the premium rates further below.

Overtime is time worked beyond statutory working hours. The LSA sets these two ways, and whichever is reached first triggers the overtime premium:

Two more premiums sit alongside the overtime rules and are assessed separately for the whole time worked, no matter how many hours were done that day: late-night work (深夜業) between 22:00 and 05:00, and work on the weekly statutory rest day (法定休日). As a later section shows, these can apply on top of overtime.

Before 2019, Japan capped overtime only by administrative guidance — a 36 Agreement could set almost any ceiling, and exceeding it carried no legal penalty. The 2019 Work Style Reform changed that: the Labour Standards Act itself now fixes a hard ceiling on how much overtime may be worked, backed by a criminal penalty. This is a genuine statutory cap on hours worked — distinct from the premium rates in the next section, which govern how much that time is paid, not how much of it is allowed.

In practice this means a roster can be fully compliant with every premium rate in the next section and still be unlawful, if the underlying hours breach the Article 36(6) ceiling. The two checks — how much overtime is allowed, and how much it is paid — are separate and both apply.

The LSA sets each premium as a percentage added on top of the base hourly wage (LSA Article 37). These are statutory minimums — always the least you may pay:

Where two of these conditions overlap, the law adds the premiums together. A late-night hour that is also overtime carries both the 25% overtime premium and the 25% late-night premium — 1.50× in total. In A Tick records each resulting combination as its own rate code, so every minute of a timesheet carries exactly one code:

Take one employee's June — a real sample month of timesheet entries, run through the engine. It mixes long weekdays, a couple of late-night starts, a Sunday rest-day shift, and enough overtime that the month crosses the 60-hour threshold. Here is how a handful of the days bucket into rate codes:

The 60-hour test is tracked across the whole calendar month, not reset each week. Once the running total of overtime passes 60 hours, every further overtime hour steps up from OT (1.25×) to HOT (1.50×), and late-night overtime from OT_LN to HOT_LN(1.75×). Totalling the whole month by rate code:

Worth flagging: this sample month exists to show how the rate codes work, not as a lawful roster. Add the rest-day hours (13.5) to the overtime hours (99) and this employee worked 112.5 combined hours in the month — over the 100-hour single-month ceiling from the earlier section. No lawful 36 Agreement permits that; a real employer in this position has already breached Article 36(6), independently of how correctly the pay above is calculated.

Working a month like that out by hand is error-prone once, and unmanageable across a whole team. In A Tick models these rules once for your Japan region — the 8-hour day and 40-hour week, the late-night window, the statutory rest day, the running 60-hour monthly test, and the way the premiums add together — and its overtime calculation engine buckets every logged minute into the right rate code automatically. It is deterministic: the same timesheet always produces the same result, so pay is never left to guesswork or to AI.

Because the late-night and monthly rules need real clock times, In A Tick reads the actual start and end of each shift rather than a bare hours figure. The statutory rest day defaults to Sunday and can be moved to whichever day your workplace designates. And because the rules live in your region's configuration, a change to the law — or a whole new jurisdiction — is a different rule set, not a different spreadsheet. The calculation, the audit trail and the payroll-ready export all come out the same way.

The Article 36 ceiling on total overtime hours is a separate check from the rate calculation above — a timesheet can be priced correctly and still breach the statutory limit. We expect to help teams track that ceiling directly in future.