On April 4, 2025, the Labour Ministry designated the fourth fund transfer service provider for digital wage payment. With all providers that have applied for the designation obtained approval, the digital payment method is expected to spread further in the future. This article outlines the digital wage payment system.
[1] What is digital wage payment?
The Labor Standards Act stipulates that “an employer must pay the full amount of wages in currency directly to the worker.” As an exceptional method, companies are allowed to pay wages through money transfer to workers’ bank or security accounts after obtaining individual consent.
From April 2023, digital wage payment became possible. Companies may pay wages through designated fund transfer services that satisfy certain requirements. The four companies and their services designated as of April 2025 are PayPay Corporation (PayPay Salary Receipt,) Recruit MUFG Business (COIN+ (Standard,)) Rakuten Edy (Rakuten Pay Salary Receipt,) au Payment Corporation (au PAY Salary Receipt.)
[2] Necessary procedure
Before starting digital wage payment, companies must follow the six steps below.
1. Check information about the designated fund transfer service providers
2. Examine the providers’ services to introduce the system
3. Sign a Labor-Management Agreement
4. Explain about the system to employees
5. Obtain individual consent from employees
6. Check and complete necessary administrative procedures
Regarding 4 and 5, companies are required to explain necessary matters to employees wishing to use digital wage payment and obtain their consent individually. Companies must also explain that other wage payment methods (cash payment, transfer to a bank or security account) are possible. Along with the consent, companies should receive information required to make digital payment to the employees’ accounts, amounts to be paid digitally and details about alternative bank account.
The Labour Ministry‘s special website for digital wage payment has been updated to provide information for employers, workers and fund transfer service providers. Please check the website if your company is considering digital wage payment.
[Reference]
The Ministry of Labour, “Sending wages to fund transfer service accounts (digital wage payment)”
“Designation of fund transfer service providers for digital wage payment”
https://www.mhlw.go.jp/stf/newpage_56549.html
The information is valid as of the date of the original article.
