Rob SherlingCover photo by https://unsplash.com/@themcny
This is a follow-up to Part one. This is an English article - I will only use Japanese when not using it would make it harder to convey a point.
Disclaimer - In the language section, I'm going to talk about Kichi, an app to help you learn Japanese to an advanced level by helping you read material that you are interested in. I made this app. It's incredible, and I use it every day.
Table of Contents
- Types of freelance
- Benefits over being a regular employee
- Downsides
- Compensation
- Visa - Highly skilled professional visa
- Learning Japanese
- Conclusion
Types of freelance
Freelance company
Like everything on this list, a freelance company is a mixed bag. They manage invoicing/billing and will arrange interviews on your behalf. In exchange, they take a cut behind the scenes. You typically get paid the next month, e.g. you worked the month of May, and get paid in June. Of course, their cut means less money that can go to you.
The way it works is that they have a bunch of job listings on their site. You create a profile, talk to an agent, and they match you with listings based on your needs.
I've seen some shady freelance companies that were like "we keep your profile on record and forward your information to prospective companies. You get paid after they pay us, so two months from the date of work. Also, we have 'incident insurance' that you can buy. If the company doesn't pay us, you still get paid half. Don't worry, that never happens. But still. We have the insurance".
The company I ended up choosing to help me find freelance jobs wanted to come with me on every interview, which was a bit awkward. Something I didn't realize was that them coming with you on each interview is also a big advantage - they typically give you very honest feedback about what went well or poorly in an interview based on the company's feedback. They get this feedback by asking you to wait outside the interview room right after the interview and get the company's immediate impression of you.
This works because the client company needs to be honest with them about how the interview went so that the freelance company can find better candidates, which will help the freelance company get paid. In turn, the freelance company can pass that feedback onto you so you can be hired more easily which will also help the freelance company get paid. It can help you realize areas you might need to work on or skills you might want to project better.
These types of places always pay you directly month-on-month. You don't need to send an invoice. Just do the work, file a report at the end of each day summarizing what you did (mine were usually about one line of text), and get paid. Simple.
I chose a company called "Crowdtech". I'd recommend them but you'll need some experience and language skill, covered below.
Direct contract
You reach out to a company directly. Use normal job hunting platforms and when you apply just tell them that you want to freelance. It's pretty surprising - a lot of companies are willing to do this because for them it's less risk. A lot of the protections that full-time "regular" employees have don't apply to a freelancer, i.e. they can just not renew your contract if it doesn't work out. Of course, you make more money compared to "salaried" workers because you lose those protections. Caveat - you can't negotiate a starting bonus as a freelancer, so take this into account. A starting bonus is for employees who will work long term, and freelancer implies leaving at any time.
They may pay you directly month-on-month without you doing anything. Alternatively, you may need to send them an invoice on the last of the month and they pay it on salary day the month after. For example, at the end of April, you create an invoice for April's work and give them a copy, and they pay you sometime in late May.
If you're going to send an invoice, use a program called "Misoca." It's a bit tough to register for but super helpful and free. Strongly recommend.
This is nice because there is no middle-man to take a cut of your salary, but it does require marginally more work. Still, this is my recommended method.
Companies that aren't freelance but look like it
Two types of companies: SES and 派遣会社. They hire you full-time and then send you out to different client companies so you can work side-by-side on the client's projects. This is the opposite of freelancing. You don't have a freelance contract, you don't control your freedoms, you stick to the client's schedules and expectations, etc. Would not recommend.
No need to network
A note on finding independent jobs and work on things like Upwork / Crowdworks. It seems like in other countries it is common to build your freelance career by networking and warm introductions and connections. In my experience in Japan, you can just job hunt like everyone else and simply ask to be freelance. You can go the networking route if you'd like, though. I've seen it happen - I've even seen a few freelancing companies that were started that way.
Please note: I don't do bill-by-the-hour freelancing or Upwork or any of that stuff. Bill-by-the-hour work is not as common in Japan as it is in America. If this is the type of freelance that you are interested in, I would recommend googling it.
Benefits over being a regular employee
Salary differences
You make more. Like, much more. It's further down the article, but you're taking on more risk so it makes sense that you make more. The exception here being starting bonuses, as mentioned above.
Meritocracy
When you have a normal "desk job", you have to be in that building for at least 8 hours. With freelancing, If you get the work done, people rarely care what hours you work. I've had freelancing gigs where I worked remote 4 days/week and on my office day I was there from about 9:15 am to lunch. Your time is your own, and it's great.
Remote work is easier to get
Remote has become far more common during the pandemic, but it's easy-peasy to work at least a few days a week from home and just do the office 1/week thing. It's a really big perk of being expected to crank out quality work constantly - no one cares where you are when you do it, as long as it gets done.
Fewer meetings
Double-edged sword. This contributes to a feeling of not being a part of the team, but I will take that trade 10 out of 10 times if it means that I only get roped into essential meetings. Counter-intuitively, I strongly recommend doing a 15-minute stand-up meeting each day if you're mostly remote. It helps people keep track of what you're doing and keeps you in the mind of your project manager, which is important for a lot of political reasons. Plus, it helps you do your job by keeping you abreast of sudden organizational changes and developments.
Easy access to cooler problems
This certainly isn't exclusive to freelancing, but you can get some crazy problems that no one else on a team can deal with, like build tools, profiling, or migrating systems. If the idea of minimal onboarding followed by "We need you to build a prototype in 2 weeks, can you do it?" is exciting, you shouldn't have any issues finding that kind of work. Also a huge upshot - as a freelancer I never get assigned to routine bug fixes or maintenance code, because we're expensive and prone to change jobs often. Interesting, hard problems are in everyone's best interest.
No code tests
I like code tests (think whiteboard interviews, not hacker rank) but it turns out that according to Japanese law you cannot be asked to take a code test if you are a freelancer. Polish those side projects if you don't have a large work history, because they can't directly test your aptitude so they'll need to see something.
So much time off
If you finish the work, it's stupid easy to take days off. These are often not paid days off, but most freelance contracts are written like "service provider will work between 140 and 180 hours per month." If you get all of your work done, 140 hours is a little more than 2 days off / month. Also, if you work well with the company, most companies will still pay you a full salary even if you take a week off once in a while. Seriously. It's the wildest thing, and I can't explain it, but I've had it happen at more than one company where they told me "If you make the hours back here and there, we aren't worried about a week."
Another big advantage is that taking unpaid time off as a regular employee can damage relations with your company. Not so for a freelancer - all time off is unpaid, so no worries.
Flexibility in work hours
This goes hand-in-hand with everything else, but screw a 9-6 workday. If you work best in the morning, put in a few hours first thing, enjoy your day, and then finish up in the evening or at night. It's up to you to make sure you get the work done and fulfill your contract hours, of course, but I've worked 5-hour days for a couple of days a week and finished out the time on a Saturday where I had no plans. You have infinity-flextime - use it.
True freedom
All of the above means that you get to experience the absolute best life that engineering can offer (in my incredibly humble opinion). If you want to work from another country (a little overrated, actually, but still nice!) or travel from Tuesday to Thursday because tickets to Wakayama were dirt cheap and that Airbnb with the rooftop pool lounge was only like 7,000 yen a night, but you don't want to suffer from bad work karma for taking time off? This is it. I despise being chained to a desk, and freelance is giving me everything I could ever want.
One interview
Most freelancing gigs are one or two interviews, but it isn't uncommon to just have one 45-minute interview and then be hired. Lower risks for the company means faster turn-around. Regular employee interviews can also be short, but I find that freelancing interviews on average tend to be shorter.
Job hopping isn't a big problem
Changing jobs often as a freelancer, especially if you have fulfilled your current project, is usually fine. The conventional wisdom in Japan is 3 years of employment. I usually change jobs 1/year, so freelancing is perfect for me.
Downsides
If it isn't clear that I'm very biased in favor of freelancing, I am. But there are some real downsides.
No stability
In short - Your contract can just be gone if they opt not to renew.
Most contracts are one-to-three month automatic renewing, but the details depend on the contract. That being said, I think because of the way these things are handled in Japan you are more likely to have a warning before your contract suddenly ends - my last freelance company had no more work for me but extended the contract by a month to let me start job hunting because they only realized about a week before my contract ran out. They kept me on longer so I could job hunt from a place of security. I'm still good friends with the people there by the way - amazing place.
No friends
This has more to do with the remote nature of freelance work compared to freelancing per-se, but you get to skip out on a lot of the meetings because you aren't part of the regular culture there. You also don't get access to certain slack channels because of company security reasons. That means missing out on social interactions with your coworkers. You can certainly make friends, but you don't interact socially with people as much if you're aiming for a full-remote type of thing. If you tend to change jobs more often you also won't form a lot of deeper bonds.
Language
I am going to talk about this extensively below in language learning, but in short - if you don't speak Japanese to a comfortable conversational level, you're going to have a really hard time getting hired as a freelancer. There are opportunities out there, of course, but you need to be able to demonstrate that you can take tasks and work them out without miscommunication. A company isn't going to work with you and wait for you to grow your Japanese ability as you work together because you have no long-term relationship. They hire you for your skills now, not what they can grow you into over the next 3 years. This brings me to my next point:
Skill
You need to have previous job experience and skills. In my experience, most people won't consider your first job for freelance even with an insane portfolio. Job experience tends to gets you the interview while skills will keep the contract renewing. Because companies aren't interested in "growing you", if you don't have skills you won't be hired. A big part of that salary bump is that they aren't investing other resources in you.
Benefits
If you are going to have a child, strongly consider becoming a regular salaried employee (the word in Japanese is 正社員). After one year of salaried employment, you are eligible for 1 year of paid maternity or paternity leave. You also become eligible for paid leave if you have a disability that stops you from working. The amount of time for disability leave can be based on your circumstances, so I'd encourage looking it up if you think it might apply to you.
You get paid leave when someone close to you dies, you usually get more money based on family conditions (for example, if you have kids, your salary goes up by 10,000 yen/month per kid), and it's very, very hard to fire you.
Another big benefit is for apartment hunting and taking out loans / getting credit. Big, stable companies especially look great on any kind of credit-based application.
Compensation
How much to charge?
TLDR: Your normal salary + 30%.
Whatever you want to make normally, add about 30%. For example, I usually charge about 750,000 yen/month for my work, so for freelance I tend to charge about 1,000,000 yen/month depending on the project and the time I need to put in. Keep in mind that if you are going through a contracting company they take a cut, so you might not get the exact salary bump you're hoping for. Also, if your output doesn't justify your salary, you are far more likely to be fired instead of the company working to improve your performance, so make sure you deliver that value consistently.
Health insurance
Go to city hall whenever you want, apply for health insurance, pay pretty much the same amount as a regular employee, get the same affordable coverage. It's awesome. America should try this sometime ;P (cue angry comments)
Taxes
This could be an entire article, but they're surprisingly straightforward.
How much money did you get paid all year? Revenue. What did you spend on equipment and train commutes? Expenses.
e.g. You work from home? Part of your internet bill, the electric bill, water, gas, and the portion of your apartment that is a dedicated office are all expenses. Expense everything that's reasonable. Eat lunch with your coworkers? Business lunch. Expensed. Go out drinking as part of a work event? Expensed. Keep receipts.
From year two onward, they'll pre-collect 2/3 of your estimated taxes as two separate payments made throughout the year. At tax time, you take the calculated expenses, any pre-paid taxes, and your revenue. Go down to the tax office, punch some buttons on a computer, and it gives you a number that you either pay (most likely) or get deposited into your bank account (less likely). You can even do the whole thing from home from your second year onward and just bring in the finished forms.
When in doubt, grab all your paperwork and go to your local tax office. They are shockingly helpful.
Bonus #1 - ふるさと納税
The scope is too big for this article, but google ふるさと納税。 Prepay your taxes (to a limit determined by last year's income), get crab/cake/strawberries/wagyu for free. For example, last year I got like 4 kilos of crab and I only had to pay the taxes I would normally pay + a 2000 yen flat fee for using the ふるさと納税 system. This isn't even a freelancer exclusive thing, but you should definitely do it if you are a freelancer. So much free stuff for the taxes you were going to pay anyway.
Bonus #2 - American? Read this
Global income and taxes as an American, the ultra-abridged version. Google what you don't understand.
This is the one place that it sucks to be a freelancer in a weird way - you get taxed on your revenue in Japan, and as a freelancer, your revenue is higher. Hence, you pay more - whereas in a company many benefits are taken into consideration before you are paid, so you make less but enjoy a lot of perks.
Federal tax: You MUST file every year, full stop, freelancer or not. File form 2555. If you make less than ~$100k in Japan, take the FEIE so you owe nothing in tax. Follow the steps, remain calm, and you'll be fine. It's not too complicated in most places. In certain situations (you make more than 100k in Japan), you might want to instead take a tax credit for the tax you already paid in Japan. That's too hard to put into the abridged version, so get ready to read a lot of paperwork.
If your rent is more than (I think) $1400/mo, you can deduct some of it from your American taxes depending on where you live in Japan. Check out the foreign housing deduction/exclusion.
If you have more than $10k (combined) at any point in the year in all of your Japanese accounts, file an FBAR. If you don't, the penalties will rip you in half. This also triggers if you have $5k in one account and then move it to another account.
Lastly, some states don't charge you state taxes if you live overseas. I am fortunate in that New York does not. Note to residents of California - they seem to charge you state tax on your overseas income the vast majority of the time. You should look into that.
Visa - Highly skilled professional visa
You get 5-year visa renewals, fast tracked permanent residence, and your spouse can work full time instead of just part-time. You can bring a domestic helper from your country if your spouse works, is ill and "can't do housework", or if you have kids. It's on a point-based system, but in short: Get the JLPT N1, have a bachelor's degree or higher, make a bunch of money, and you'll probably qualify.
The huge catch: In this specific case, the company you work for owns the visa, not you. If you change companies, you lose the visa. This is completely different from a normal visa. I would not recommend it for freelance workers.
Normal work Visa
Many companies have no issue sponsoring you as a freelancer to renew your visa. They might not want to sponsor you to come to Japan to work (few companies do), but renewing tends to be very easy.
Learning Japanese
Full explanation
If you are interested in my take on how to learn Japanese and how I did it, please read this:
How I learned Japanese to N1 as a translator and software engineer. If you like that article please clap a bunch for it because I have no idea how Medium works.
Very Short Version
This is the omega TLDR of the above article:
What level of Japanese should I have?
- I recommend ~JLPT N2.
Why?
- That's the level that your conversation really starts to flow. Read the above to learn more.
Do I need to know kanji / hiragana / katakana?
- Yes. You should be able to read and type all of the standard kanji, more or less. Note: not write, no one cares if you can't remember how to write the kanji for 納税 by hand.
How should I study?
- In short - 1) have fun, 2) immerse when you can, 3) review religiously but delete flashcards you don't need anymore as if they are costing you money to keep around.
I still make a lot of mistakes when speaking - is that going to be an issue?
- Usually, no. If people can understand what you want to say, you're probably fine. Flip the script here - if someone was talking to you in English and said "I am wanting to go to the lunch together, let's eat some roast foods!", you might find that grammar endearing, and it certainly wouldn't stop you from going to lunch. The inverse, however, "The server is down because static page on CDN was eaten by the node." -> Not being able to understand what this person is saying would be intensely frustrating. In short: if you know how to make yourself understood and are comfortable learning specialty words for your job as you go, no problem.
An app to help you learn
I covered this in my language article above, so I won't plug it too much here - I built a language learning app that helps you learn Japanese from things you're interested in. I used Anki to do this, but I got frustrated with some parts of Anki and wanted to do some things differently. You take images of things you like (menus, games, subtitles, physical books, screenshots of the kindle app, etc.) and it processes them. Tap a word in the image and it will give you the pronunciation, translation, more lookup options, and use the sentence you learned it from as an example sentence in a flashcard. It is specifically designed to help you customize your study to read the things you find fun instead of pre-made decks. I use it to read boatloads of Manga and kindle books, and sometimes play Japanese games.
If you're interested, check out https://learnkichi.com.
Conclusion
Everything here is just based on my own experiences. Every situation is different - some people really, really prefer the structure and security of salaried work, and there is nothing wrong with that.
Did I miss anything? I feel like there isn't a lot of information like this online, and I'm trying my best to post relevant updates. If you want to see an article on something, please let me know. You can leave a comment, track down my email, or just DM / follow me on twitter (link in my profile).
Again, if you want to know more, Part one is here.
