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What would you do if your company stopped paying bonuses—or never offered them in the first place?
It’s a common concern for employees in Japan, whether you’ve just joined a new company or noticed that bonuses you used to receive have suddenly disappeared. While companies aren’t legally required to pay bonuses, failure to pay them can sometimes cross legal lines.
In this article, we’ll explore how common it is for companies to skip bonuses, why it happens, and the pros and cons of working at a bonus-free company. We’ll also guide you on whether leaving your job is the right choice.
How often do companies offer no bonus?
In Japan, around 30% of companies don’t offer bonuses. For larger companies, that drops to about 10%.
According to the Ministry of Health, Labour and Welfare:
In 2023, 69% of companies paid year-end bonuses.
In 2024, 73% of companies with 5+ employees and 89.9% of companies with 30+ employees paid summer bonuses.
Most companies offer bonuses, and larger companies are more likely to do so.
How much is the average bonus?
Government data shows that in 2023, the average year-end bonus across all industries was ¥395,647 per employee. Summer 2024 bonuses averaged:
¥414,515 for companies with 5+ employees
¥478,814 for companies with 30+ employees
Bonuses vary by industry: mining averaged ¥581,210, while the food service industry averaged ¥69,234. Individual roles and company policies also affect the amount. Some companies pay only one bonus per year, and some years may have no bonus at all.
Is it illegal for full-time employees to receive no bonus?
No. For most companies, bonuses are discretionary. Only certain public-sector employees are legally guaranteed bonuses.
Japanese tax law defines bonuses as payments without a fixed amount or schedule.
Labor law allows companies flexibility, generally tying bonuses to performance.
When non-payment or reduction can be illegal:
If company rules guarantee a bonus: If your contract or handbook specifies a bonus, failing to pay without reason may be illegal. Companies often include clauses allowing adjustments based on business performance.
If there’s no legitimate reason: Personal conflicts or favoritism cannot justify cutting a bonus. Reductions must be fair, reasonable, and socially acceptable.
Do companies have to notify you if bonuses are cut?
No. There’s no legal requirement to give advance notice if bonuses are reduced or eliminated. However, employees can request clarification, and unfair treatment may be legally challenged.
Why do some companies not offer bonuses?
Some companies may choose not to offer bonuses due to financial or structural reasons. Common factors include:
Poor business performance: Limited profits may prevent bonus payments. Temporary downturns (e.g., COVID-19) may pause bonuses.
No labor union: Employees have less leverage to negotiate bonuses.
Small or new companies: Early-stage companies often reinvest profits rather than pay bonuses.
High base salary or annual salary system: Some companies include bonus equivalents in salary, ensuring stable income.
What are the advantages of working without a bonus?
Working at a bonus-free company isn’t always negative. In some cases, it can actually offer stability and flexibility:
Higher base salary: Stable monthly income makes budgeting easier.
Income less affected by company performance: Annual salary systems reduce risk of pay cuts during slow years.
Flexible career moves: You can change jobs without waiting for bonus season.
What are the disadvantages?
At the same time, there are potential downsides to consider:
Lower motivation: Bonuses reward performance, and their absence may reduce drive.
Harder to save large amounts at once: Without lump-sum payments, you need to save monthly for big purchases like a car or house.
Should you quit a company without a bonus?
Not necessarily. Consider the full picture: base salary, skill development, and growth potential.
5 things to check before moving:
Company stability: Ensure consistent income even without bonuses.
Company alignment: Are you motivated to contribute to the company’s goals?
Salary vs skills and contribution: Is compensation fair? Career consultants can help assess your market value.
Industry and role benchmarks: Compare annual pay, including bonuses, to industry averages. Robert Half’s Salary Guide is helpful.
Opportunities to grow: Can you develop skills and advance professionally?
How can you increase your income?
If you want to boost your earnings, there are several approaches:
Negotiate your salary: Timing matters—end-of-year reviews are ideal.
Improve skills or performance: Certifications or projects can justify higher pay.
Consider changing jobs: New opportunities may better reward your skills. Career consultants can guide you to companies that match your value.
FAQs
Why do bonuses decrease?
Poor company performance, unmet personal targets, revised pay policies, or economic downturns.
Are bonuses guaranteed?
No. They’re usually discretionary and can vary by company performance, employment type, or contract.
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Not receiving a bonus doesn’t necessarily mean a company is unstable. If you feel your contributions aren’t being fairly recognized, it may be a good time to consider your next career move or explore opportunities with the guidance of a recruiter.
