Understanding HSP Annual Salary Points
Understanding HSP Annual Salary Points
Decoding the HSP Compensation Points System At Continental, we frequently receive inquiries from corporate HR managers and individuals regarding the calculation of points for the compensation of Highly Skilled Professionals (HSP). The calculation of HSP compensation, which is based on the projected annual salary, is a common point of confusion. It refers to the total expected salary over the coming year at the time of application.
What Comprises ‘Annual Salary’ in Point Calculation? The ‘Annual Salary’ includes basic pay, bonuses, and taxable allowances. However, it may not encompass reimbursements such as commuting, dependent, or housing allowances due to their nature. Overtime pay is also excluded from points calculation due to its uncertainty at the time of application, although fixed overtime pay is considered. The complexity increases with performance-linked compensation and stock rewards (RSUs, PSUs).
Compensation from Overseas for Assignees in Japan For expatriates transferred to a Japanese company, the salary paid by a foreign head office or subsidiary is included in the compensation calculation for points. This arrangement could be a 50/50 split between a foreign and Japanese employer. However, if the transfer does not involve an overseas company, then the compensation does not count.
Minimum Income Requirements for HSP Categories For HSP categories 1b and 1c, the projected annual salary cannot be less than 3 million JPY.
A Closer Look at Japanese Salary Structures
Japan’s Traditional Salary Dilemma In Japan, particularly within traditional companies, salary structures are designed based on long-term employment, often resulting in lower wages for younger employees. For example, when the author(I) joined a securities company, the starting salary was just only 178,000 JPY( ；∀；). Survival was possible only due to the employer covering housing, utilities, meals, and commuting costs, with senior colleagues and bosses generously covering post-work drinking expenses. Consequently, foreigners transitioning into traditional Japanese corporates may find their salary points on the lower side. Although salary standards are gradually increasing, they are still not on par with global levels.
Continental’s Support and Invitation for Inquiries Continental welcomes requests from corporate HR and individual foreign clients. We encourage you to reach out with any queries. Our commitment is to support foreign researchers, business managers, and executives to thrive and have fulfilling days in Japan.
For those who may have questions or require assistance with understanding the nuances of HSP compensation and its point calculation in Japan, or if you are considering a career move to a Japanese corporation and are curious about how your salary will affect your visa status, do not hesitate to contact us. We are here to ensure that your transition is smooth and your contribution to Japan’s workforce is valued and rewarded appropriately.
Professional
Masakazu Murai
18 years experience in Investment Banking at Mitsubishi UFJ Morgan Stanley(JV, MUFG Bank and Morgan Stanley). He had provided financial advisory more than 500 entrepreneurs and senior management.
During his tenure, he worked as an employee union executive committee member in promoting diversity, including the active participation of foreigners and women in the office, and engaged in activities to improve the working environment. He specializes in financial consulting and VISA/PR consulting.
Gyoseishoshi Immigration Lawyer
CMA(Japanese financial analyst license)
CFP (Certified Financial Planner)
Master of Business Administration in Entrepreneurship
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