What is 仮上げ住宅手当 (Kariage Jutaku Teate)? Understanding Housing Allowance Arrangements in Japan
In Japan, employee compensation often goes beyond base salary. One common practice is the provision of 仮上げ住宅手当 (kariage jutaku teate)—a type of housing allowance arrangement. For foreign employers entering the Japanese market, understanding how these allowances work is essential, as they play a significant role in both employee satisfaction and overall cost management.
At Outsourcing Japan, we help employers design and administer compliant housing allowance programs that align with Japanese labor practices while supporting business objectives.
1. What is 仮上げ住宅手当?
仮上げ住宅手当 refers to a system in which an employer provides financial support for an employee’s housing costs. Unlike a company-leased apartment (社宅, shataku), where the company directly manages the lease, this arrangement typically involves the company paying a portion of the employee’s rent as an allowance.
The allowance is often paid directly with the employee’s monthly salary and can be structured in different ways, depending on company policy and tax considerations.
2. Who is Eligible?
Eligibility is determined by each company’s internal rules, but common categories include:
Regular employees – Most commonly receive housing allowances, especially when relocating for work.
Directors and executives – Some companies extend allowances to directors, though this is subject to stricter tax treatment.
Transferred employees – Staff sent to another city or region often receive housing support to offset relocation costs.
Clear eligibility rules are important to avoid claims of unfair treatment and to maintain compliance with Japanese labor and tax law.
3. Benefits to Employees
For employees, 仮上げ住宅手当 provides:
Reduced living costs – Housing in Japan can be expensive, particularly in metropolitan areas like Tokyo.
Financial stability – Knowing a portion of rent is covered improves employee satisfaction and retention.
Increased mobility – Employees are more willing to accept transfers when housing support is provided.
4. Benefits to Employers
Employers also gain significant advantages:
Talent attraction and retention – Competitive housing support makes job offers more attractive.
Operational flexibility – Easier to relocate staff within Japan without resistance.
Tax efficiency – When structured properly, certain housing allowances can reduce overall taxable income for employees while remaining deductible for employers.
Summary
仮上げ住宅手当 is a key element of employee compensation in Japan. It helps employees manage high housing costs and increases job satisfaction, while also giving employers an important tool for attracting talent, supporting mobility, and managing costs effectively.
For companies operating in Japan, understanding how to structure and administer housing allowances correctly is essential to staying compliant and competitive in the labor market.