Japanese Business Glossary

財形貯蓄制度 (zaikei chochiku seido), Asset Formation Savings System, is a system of financial savings plans in Japan designed to help employees save money through payroll deductions. These savings plans are incentivized by the government and are often offered by employers.

There are three main types of Zaikei savings plans. The first is the General Savings Plan (Zaikei Tsukurikata Chochiku), which is for general savings purposes and can be used for any personal needs or future expenses. The second type is the Home Ownership Savings Plan (Zaikei Jutaku Chochiku), specifically for saving towards purchasing a home or making home improvements. The third type is the Retirement Savings Plan (Zaikei Nenkin Chochiku), which is designed to help employees save for their retirement.

Contributions to these savings plans are automatically deducted from an employee's salary and can offer tax benefits, making them an attractive option for long-term financial planning. The funds are typically held in special accounts with financial institutions, and interest earned on these savings may also be tax-exempt under certain conditions.

In Japanese business terminology, 仕掛 (shikake), mechanism,device, or setup, can have various meanings depending on the context. Commonly, it refers to the mechanisms or setups within a system. In manufacturing, for example, 仕掛品 (shikakehin) means work-in-process items—products that are in production but not yet completed.

In broader terms, shikake can imply strategies, devices, or methods employed to achieve a particular goal. It can refer to physical mechanisms, like machinery components, or abstract strategies, like marketing tactics.

所得割額 (shotoku warigaku) refers to the income-based component of local inhabitant taxes in Japan. Local inhabitant taxes, which consist of a per capita levy and an income-based levy, are paid to prefectural and municipal governments. The income-based component shotoku warigaku is calculated based on an individual's taxable income from the previous year.

First, determine taxable income, which is the total income minus any applicable deductions. Then, apply the tax rate. Local inhabitant taxes usually have a flat rate. For municipal tax, it's typically around 6%, and for prefectural tax, it's around 4%. These rates can vary slightly depending on the region.

Finally, multiply the taxable income by the applicable tax rates to get the income-based tax amount. The shotoku warigaku is then added to the per capita levy to determine the total local inhabitant tax due. This tax is important for funding local government services and infrastructure.

労働保険料 (rodo hokenryo) refers to labor insurance premiums in Japan. This insurance is part of the social insurance system and consists of two main components: workers' compensation insurance (労災保険, Rosai Hoken) and unemployment insurance (雇用保険, Koyo Hoken).

Workers' compensation insurance provides coverage for workers who suffer from work-related injuries or illnesses. It covers medical expenses, compensation for lost wages, and benefits for permanent disabilities. Unemployment insurance provides financial support to workers who lose their jobs. It offers unemployment benefits, job training, and other assistance to help unemployed workers find new employment.

Employers are required to enroll their employees in these insurance programs and pay the premiums. The amount of the labor insurance premium depends on the total wages paid to employees and the industry in which the company operates. The premium rates are reviewed and adjusted annually by the government.

In summary, rodo hokenryo are mandatory contributions that employers in Japan must pay to ensure their employees are covered by workers' compensation and unemployment insurance.

慶弔金 (keichokin) refers to monetary gifts given on occasions of celebration or condolence in Japan. These gifts are a common part of Japanese culture and are usually presented in specific situations such as weddings, funerals, births, or other significant life events.

In the context of a workplace, companies often have a keichokin system as part of their employee welfare programs. This system provides financial support to employees during important personal events. For example, an employee might receive a congratulatory gift for getting married or having a child, or they might receive a condolence gift if they experience a death in the family.

The amount of keichokin varies depending on the occasion and the company's policies. The practice of giving keichokin helps foster a sense of community and support within the organization. It reflects the company's commitment to the well-being of its employees during both happy and challenging times.

慰謝料 (isharyo) refers to consolation or compensation money in Japan. It is typically paid as damages for non-economic losses, such as emotional distress, pain, suffering, or mental anguish. This form of compensation is often seen in legal contexts, particularly in cases involving personal injury, defamation, divorce, or other civil disputes.

Isharyo is distinct from other forms of compensation that might cover economic losses, such as medical expenses or lost wages. Instead, it addresses the emotional and psychological impact of an incident. For example, in a divorce case, one party might be required to pay isharyo to the other for the emotional pain and suffering caused by the breakup.

The amount of isharyo is determined based on various factors, including the severity of the distress, the circumstances of the case, and precedents from similar cases. It is intended to provide a measure of relief and acknowledgment of the non-tangible harm suffered by the affected party.