Complete Guide to Side Jobs and Freelancing for Engineers in Japan: Legal Requirements, Taxes, and Platforms
Many foreign engineers working in Japan are interested in earning additional income through side jobs or freelancing alongside their main employment. However, Japanese labor laws and tax systems are complex, and many people don't know where to start. This article provides comprehensive practical information on the legal requirements, tax structure, available platforms, and income expectations for side jobs and freelancing in Japan.
Legal Requirements to Verify Before Starting a Side Job
Before starting a side job in Japan, you must first verify your work visa conditions and your company's regulations.
Work Visa and Permission for Activities Outside Qualified Status
If you're working on an Engineer Visa (Engineer/Specialist in Humanities/International Services), you may need "Permission for Activities Outside the Status of Qualification" to engage in activities outside your main job. However, if the side job is in the same field, permission is often not required. For example, if you're working as a software development engineer and take on programming work for another company on weekends, this typically doesn't fall under activities outside your qualified status.
On the other hand, if you engage in activities outside your visa category, such as working part-time at a restaurant, you must obtain permission for activities outside qualified status from the Immigration Bureau. Violations can lead to visa cancellation or denial of renewal in the worst case, so caution is necessary.
Check Your Company's Side Job Regulations
Since the Work Style Reform in 2018, the Japanese government has been promoting side jobs, but some companies still prohibit them. First, check your employment rules and confirm with your HR department whether side jobs are permitted. If approval is required, you must apply in advance. Engaging in side jobs without permission could potentially result in disciplinary action in the worst case.
However, legally, it has become increasingly difficult for companies to prohibit side jobs without reasonable grounds, and many IT companies are moving toward allowing them.
Basic Knowledge of Taxes and Social Insurance
When you earn income from side jobs, your tax and social insurance obligations change. Without proper understanding, you may face unexpected expenses later.
Income Tax and Tax Returns
In Japan, if your income outside of salary exceeds 200,000 yen per year, you must file a tax return between February 16th and March 15th of the following year. The amount subject to taxation is your side job income minus necessary expenses.
For example, if you earn 1 million yen annually from side work and incur 300,000 yen in expenses such as computer purchases and internet fees, the taxable amount is 700,000 yen. This amount is subject to income tax (progressive rates from 5% to 45%) and residential tax (flat 10%).
Consumption Tax Payment Obligations
As a freelancer, if your annual sales exceed 10 million yen, you'll be obligated to pay consumption tax two years later. Until then, you're a tax-exempt business operator and don't need to pay consumption tax even if you collect it. However, the Invoice System that started in October 2023 has complicated consumption tax handling. Some large companies may require invoice registration, so consider this based on your situation.
Changes in Social Insurance Premiums
Depending on the form of your side job, it may also affect your social insurance premiums. If you become independent as a sole proprietor, you'll need to enroll in National Health Insurance and National Pension, which may be more expensive than your main company's social insurance. On the other hand, if your side job involves an employment contract, you may need to enroll in social insurance with the side job employer if certain conditions are met.
Recommended Side Job and Freelance Platforms
Japan has several excellent platforms where engineers can find side job and freelance projects.
Engineer-Focused Platforms
Lancers and CrowdWorks are Japan's largest crowdsourcing services. They feature a wide range of IT projects including website development, app development, and data analysis. Projects range from small-scale work for beginners to projects worth several million yen. English support is limited, but once you become comfortable with Japanese, these are extremely useful platforms.
Levtech Freelance and Geechs Job handle more specialized engineer projects. They feature many high-value projects ranging from 500,000 to over 1 million yen per month, making them ideal for experienced engineers. Agents support you from project introduction to contract, making them suitable for those who aren't comfortable with sales.
Global Platforms
If you prefer communicating in English, international platforms like Upwork and Toptal are also options. However, there are fewer projects based in Japan, and compensation follows international standards, so you need to consider the balance with Japan's cost of living.
Income Expectations and Career Strategy
How much income can you realistically expect from side jobs and freelancing?
Income Expectations by Skill Level
For junior engineers (1-2 years experience), realistic income is 2,000-3,000 yen per hour, earning 20,000-30,000 yen per month with about 10 hours of side work monthly. Mid-level engineers (3-5 years experience) can expect 4,000-6,000 yen per hour, earning 80,000-120,000 yen per month with 20 hours of work.
For senior engineers (5+ years) or full-time freelancers, projects paying 600,000-1,000,000 yen per month are not uncommon. Particularly, if you have lead engineer or architect-level skills, projects exceeding 1 million yen per month exist.
Long-term Career Strategy
Side jobs aren't just an income source—they're also an opportunity to develop skills and broaden your career. By working with different technology stacks from your main job or participating in startup launches, you can increase your market value. Additionally, if you're considering future independence, side jobs are an important step for building a client base and securing stable income.
Conclusion: Start with a Plan
Side jobs and freelancing in Japan offer an excellent opportunity to achieve both increased income and career advancement with proper preparation and knowledge. First, verify your visa conditions and company regulations, and understand the tax and social insurance systems. Then, choose a platform that matches your skill level and goals, and we recommend starting small and gradually expanding.
Japan's side job market is growing year by year, offering great opportunities for foreign engineers as well. We hope this article helps you take your first steps into side jobs and freelancing.