Guidelines for FY2026 regional minimum wages have been released. To support small businesses struggling to increase pay, the Labor Ministry has established the “Business Improvement Subsidy.” Since the government has begun accepting applications for fiscal 2026 subsidy on September 1, this article provides an overview of this subsidy system.
[1] What is the Business Improvement Subsidy?
The subsidy is given to cover a part of expenses for capital investment (machinery, consulting, personnel training, education, etc.) aimed to improve productivity. Businesses that have raised workplaces’ minimum wage (*) are applicable to the subsidy.
*Minimum wage refers to the lowest hourly wage in the workplace, which is calculated in the same way as the regional minimum wage.
[2] Applicable investment
Listed below are examples of investment applicable to the subsidy. The cost must be 100,000 yen or higher (excluding tax). The subsidy is provided for total expenditure of 100,000 yen or higher, even if each item costs less than 100,000 yen.
Introduction of a POS system to simplify inventory management
Introduction of a special vehicle with a cargo lift to reduce transportation time
Reexamination of operational flow by a qualified specialist to improve customer turnover
Systemization of customer management data
[3] Upper limits and application flow
There are upper limits to the subsidy according to the amount of wage increase. Specific limits are also determined by the number of applicable workers (among those enrolled in the employment insurance system).
|
Courses |
Subsidy limits |
|
|
Other than the right column |
Workplaces with less than 30 workers |
|
|
50-yen course |
300,000 – 1,300,000 yen |
400,000 – 1,300,000 yen |
|
70-yen course |
400,000 – 3,000,000 yen |
500,000 – 3,000,000 yen |
|
90-yen course |
900,000 – 6,000,000 yen |
1,000,000 – 6,000,000 yen |
The subsidy amount is the lower of the cost of applicable investment multiplied by the subsidy rate or the upper limit.
The subsidy rate is four-fifth for workplaces where the minimum wage is less than 1,050 yen, and three-fourth if the minimum wage is 1,050 yen or higher.
To receive the subsidy, companies need to submit an application along with a minimum wage increase plan and a capital investment plan, carry out the plans and report results. The subsidy will not be paid for an investment made before the approval of application.
Since there are other detailed requirements, please visit the ministry website and check the application manual and Q&A.
■Reference
The Ministry of Health, Labour and Welfare, “Business Improvement Subsidy”
*This information is based on laws and regulations as of the date of the original article.
