BONUS-System FAIL in JAPAN! (5 Gründe)

A bonus of several thousand euros a year from a Japanese company, that sounds pretty nice at first. The problem is, it's not. And why I see it that way, I'll explain it to you today for five reasons. First of all, a little shout out to the dear Kevin from Nihongo, because he is the reason why I am making this video. He recently made a video on his channel about this bonus system in Japan, how it works, etc. The video is also very nice and you know Kevin, when Kevin makes a video, he has done his homework, he knows what he is talking about. This is well researched and well packaged and well presented, so take a look at this video. The video is wonderful, but what is the problem now, why am I making this video as an answer to it? The reason is very simple. He described this bonus system as very positive in his video, he said he thinks it's good. And you can already imagine, I see it differently, I don't think this system is particularly cool. That's why I thought I'd give myself a little bit of mustard and explain in this video why I don't think this bonus system in Japan is so nice. But first of all, what is it all about? In principle, you usually get a decent bonus at a Japanese company every six months. And as I said, that's several thousand euros per bonus. That means, usually it's around June, July, there's the summer bonus and then there's the winter bonus in December. And so you get your fat bonus every six months. And as I said, that's several thousand euros each and that's a sum that comes together. A bonus of several thousand euros a year, that sounds pretty nice at first, who wouldn't like to take that? But now let's get to the five reasons I see as a problem. And the first is that in my opinion it's just not a bonus, it's actually just the annual salary redistributed. You have to be clear about the fact that you can't rely too much on the monthly salary, but that you always have to look at the whole thing in the context of the annual salary, so to speak. It's like this, if you sign a employment contract, your annual salary is usually determined. How much do you get in total per year? And for the sake of simplicity, I'll just take an example at this point in euros, so that it's easier, let's say 60,000 euros per year. Before taxes, that would be the annual salary, so you start working at XY, you sign the employment contract and it says your annual salary is 60,000 euros. Okay great, that means you would normally assume or assume that if that's 60,000 euros a year, then I divide that by 12, then I have my monthly salary. That would be 60,000 euros a year, so 5,000 euros a month. So you could expect, okay, I get my 5,000 euros a month as my monthly salary. But the crux of the matter is here, with many Japanese companies this is not the case at all, but your annual salary is divided into more than 12 months, so to speak, and part of it is the bonus. Sounds weird, but let me explain that again. Let's take as an example that your annual salary is divided into 16 months or into 16 parts if you will. With some companies it can also be 15 or 14 or maybe 17, we'll just take 16 months again for the sake of simplicity. That means annual salary 60,000 euros, if you divide that by 16, then a monthly salary of 3,750 euros per month remains. So now you ask yourself, but Senpai has 12 months a year, now you divide it by 16, what about the remaining 4 months? And that's exactly the bonus, that's what is considered as a bonus. That means you get 12 sixteenths of your annual salary divided by the months as monthly salary and the remaining 4 monthly salaries are then 2 times 2 monthly salaries as a bonus, so to speak. That means, again specifically with the example remaining, that would be 3,750 euros monthly salary times 2, 7,500 euros as a bonus and you get that once in June, July or so and then once in December. That means you get a lower monthly salary than you would expect over the course of the year, for that you get 7,500 euros on top every six months and that is of course pretty fat at the time when the bonus is paid out. Because you have the normal monthly salary of 3,750 euros, then 7,500 euros are added, that means you somehow get 10,000 euros a month and that's just once, let's say in June and then once in December. And that is of course a huge amount of several thousand euros, but as I said, on the year-to-date it is actually the same annual salary of 60,000 euros, it is just redistributed into a lower monthly salary and then this bonus that comes on top. And if you are now asking yourself, but Senpai, is it always like that, can't it be more or less, it's not a bonus anyway? Exactly, if you expand that a little further, this bonus amount can be adjusted and with that we come to the second disadvantage, it can also be less. But let's first explain that with the adjustment, how is a bonus adjusted? We have now established, the baseline is in the example we are currently in, two monthly salaries would be a bonus every six months and it can now be adjusted. That means, let's say you get 10% on top of the bonus, so it can be adjusted upwards. Then we would now be at 7,500 euros plus 10%, that is 8,250 euros, that means your bonus can actually grow again and that is of course nice and then it is also really a bonus according to my understanding, where you get something extra on top of it. The disadvantage, however, is that the whole thing can also sink and now let's take the opposite case. Then, for example, 10% will be deducted, then we would only be at 6,750 euros of your bonus, which is of course well below 7,500 euros. As I said, everything is now a simplified example at this point, but as you can see, the bonus can also sink. Put yourself in the position of a fresh university graduate who is just starting to work in Japan, that was the case with me at the time and as a fresh university graduate your salary in Japan is usually quite low. I was in Japan, I was happy, but the salary was really not that nice. And for me now again, from my point of view, it was just extra stupid, because when you emigrate abroad, everything is expensive or more expensive than for a citizen of the country in which you are. That means you have incredibly high costs, first of all to find an apartment here, to move in, to buy furniture, maybe to buy clothes and then also things like a refrigerator, microwave, you know, you have to buy everything from scratch. Theoretically, you can still change the job at any time, but then you just have to make sure that depending on the timing when you do that, you may have a real loss. That doesn't always have to be the case, but it can be the case, which means it's another potential disadvantage of this redistribution with the big bonus. Now we have looked at all the negative sides from my point of view, but doesn't the whole thing have any advantages? And I spontaneously come across two advantages that the whole thing could have. And then you can maybe make bigger purchases with it or if you somehow have a loan that you have to pay off, be it a student loan or a house, car, whatever, that you can then use the large amount of money in one fell swoop for the loan repayment. And the second advantage that I see, I have already mentioned to you, you could of course get more than the two-month salary as a bonus. If your performance and that of the company is somehow good and it is adjusted upwards, then of course it will be more. Although you have to say again that it is not the case that you will not get a bonus if your annual salary is divided into twelve months, because in that case you would really get a bonus. So you can see it that way, but of course that could also prove to be an advantage. And of course you ask yourself all the time if that brings so many disadvantages and only so few advantages. If at all, why do you do it anyway? Why is there this system? Who has something of it? And the answer is also quite simply, at least in my understanding, the advantage is now here on the employer's side. The companies that regulate the bonus system, that's an advantage for them. Why? On the one hand, they can keep your salary, which they would otherwise pay you monthly. A part of it they can keep longer, up to the bonus. That means they have more money in their hands for a longer time. With which the companies could probably also use this saved money to invest. And then they probably have a little more financial leeway. Another advantage that I see, as I said, again from the company's point of view, is that the bonus can also be adjusted downwards. So that if the company is not doing well or the finances are tight, that you can then say, yes, okay, at the moment it's not that much money. Then let's adjust the bonus from our company a little bit down. Then we can save a little bit. Of course, it depends on the company. I could imagine, I don't know, I could imagine that if it's really tight and looks really bad, that the bonus can even be deducted if the companies really have to save. Which would be really stupid for the company. But I don't know if that's the case at all, whether companies really do that. But I could potentially imagine that as a worst-case scenario. And that wouldn't be so nice. Okay, I hope you can now understand what I have to say about this bonus system. Be sure to watch Kevin's video about it, if not already done. That's a good video. Otherwise, thanks for your attention. See you next time. Peace!