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Foreign worker pay in Japan rises 6.4% amid broader wage hikes

Created at 31 Aug · 7:36 PM1 source↑ Market-relevant
IN SHORT

Foreign nationals working in Japan earned an average of 292,400 yen ($1,831) per month in 2025, a 6.4% increase from the previous year. This rise aligns with broader wage hikes across Japan, averaging over 5% in spring labor negotiations, driven by inflation and labor shortages.

Key Numbers

292,400 yenaverage monthly earnings for foreign nationals in Japan (2025)
$1,831average monthly earnings for foreign nationals in Japan (2025)
6.4%year-on-year increase in foreign worker earnings
5.26%average reported pay increase in spring labor negotiations (as of March 23)
5%average wage increase for SMEs
2%annual consumer price index increase since 2022
–38employment conditions diffusion index in Bank of Japan's Tankan survey
292,000 yenaverage monthly earnings for professional/technical visa holders
12%gap between professional/technical visa holders and all-Japan average wage
3.3 yearsaverage tenure for foreign workers
12.4 yearsaverage tenure for all workers
3.8%national average wage growth in 2024 survey

Who's Involved

Yamada Hisashi
macroeconomist warning of challenges for small businesses
Rengō (Japanese Trade Union Confederation)
reported average pay increase of 5.26% in spring labor negotiations
Keidanren (Japan Business Federation)
policy encouraging management to increase base pay
Tsutsui Yoshinobu
Chairman of Keidanren
Bank of Japan
conducted Tankan survey showing high percentage of understaffed companies
Foreign worker pay in Japan rises 6.4% amid broader wage hikes

↳ Why This Matters

The rising wages for foreign workers and the broader trend of wage hikes in Japan signal a potential shift away from decades of nominal wage stagnation, driven by inflation and labor shortages. This could impact the cost of doing business for SMEs and influence the overall economic vitality of the country.

Key facts

  • Foreign nationals working in Japan earned an average of 292,400 yen ($1,831) per month in 2025.
  • This marks a 6.4% increase from the previous year.
  • Japan's spring labor negotiations resulted in average wage hikes exceeding 5%.
  • Labor shortages and inflation are key drivers behind the wage increases.
  • Foreign workers on professional and technical visas earn an average of 292,000 yen per month.

Foreign nationals working in Japan saw their average monthly earnings rise by 6.4% to 292,400 yen ($1,831) in 2025, according to a government survey. This increase aligns with a broader trend of wage hikes across Japan, with spring labor negotiations yielding average increases of over 5% for companies of all sizes, including small and medium-sized enterprises.

These wage increases are attributed to a shift towards an inflationary economy and intensifying labor shortages, exacerbated by Japan's declining birth rate. Major employers, guided by Keidanren's policy, have proactively agreed to raise base pay to attract and retain talent, a move that SMEs are increasingly forced to follow.

While foreign workers on professional and technical visas earn an average of 292,000 yen per month, this is still about 12% below the national average. This gap is largely explained by differences in tenure, as the Japanese pay system heavily rewards seniority, with foreign workers averaging 3.3 years of service compared to 12.4 years for the overall workforce. The national average wage itself saw a significant 3.8% increase in the 2024 survey.

Frequently asked questions

Foreign nationals working in Japan earned an average of 292,400 yen ($1,831) per month in 2025.

The average reported pay increase for companies of all sizes was 5.26% as of March 23, with SMEs also seeing increases exceeding 5%.

The primary drivers are the shift to an inflationary economy and intensifying labor shortages due to Japan's declining birth rate.

The gap is largely attributed to tenure and seniority, as the Japanese pay system rewards years of service, and foreign workers typically have less tenure.

What Happens Next

01Monitor continued wage growth in subsequent labor negotiations.
02Observe the impact of wage hikes on inflation and productivity.
03Track the ability of SMEs to absorb rising labor costs.
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How It Developed

Foreign nationals working in Japan earned an average of 292,400 yen per month in 2025.
This represents a 6.4% increase from the previous year.
Japan's spring labor negotiations saw wage hikes averaging over 5%.
Major companies announced decisions to fully accept unions' wage demands.
The average pay increase for companies of all sizes was 5.26% as of March 23.
Even small and medium-sized enterprises saw average wage increases exceeding 5%.
Keidanren's policy encouraged management to start negotiations with base pay increases.
The shift to an inflationary economy since the COVID-19 crisis is a key factor.

Sources

T1
Foreigner pay in Japan rises 6% amid overall wage hikes: surveyNikkei Asia
T2
Average Salary in Japan for Foreigners: 2026 Data by Industryatarashift.com
T2
Only 6% of workers in Japan say wage hike rates larger than price ...mainichi.jp
T2
Spring Wage Hikes Signal Shift in Japanese Economy: But Small ...nippon.com

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