JapanInterest rate on delayed compensation?
In Japan, the statutory interest rate on delayed compensation is 3% per year, unless a higher rate is agreed upon or a special law applies.
What the Law Says
Japanese law sets a default interest rate for unpaid monetary obligations, including delayed compensation such as unpaid wages, damages, or contract payments.
Under the Japanese Civil Code, when a debtor fails to pay a monetary obligation by the due date, interest accrues automatically on the overdue amount.
The standard statutory interest rate is 3% per year, unless the parties have agreed to a different rate in writing — provided it does not violate laws limiting excessive interest (e.g., Interest Rate Restriction Law).
This rate applies regardless of whether the delay was intentional or not, and no formal demand is required for interest to begin accruing — it starts the day after the payment deadline.
Statutory TextIf a person who owes a monetary debt fails to perform the debt, interest at the rate of three per cent per annum shall accrue on the amount of the debt from the time when performance was due.
— Civil Code, s. 404 — Interest on Delayed Performance
What to Do
Confirm the original payment deadline stated in the contract or legal basis for the compensation.
Calculate accrued interest at 3% per year from the day after the due date.
If a written agreement specifies a different lawful interest rate, apply that rate instead.
Include both principal and accrued interest in any formal demand or claim.
Keep records of the debt, due date, and calculation method for potential enforcement.
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.