Calculating Payment Due Dates in Japan: “Month-End Close, Paid End of Next Month” and Weekend Due Dates
An invoice says “closed at month-end, paid at the end of the following month”, and the due date happens to fall on a Saturday. Do you pay early, or on the next business day? And when does money sent on a bank holiday actually reach the other side? This guide works through how to read payment terms in Japan, what to do when a due date lands on a weekend or holiday, and when transfers actually arrive.
How to read payment terms
The period from invoicing to payment is called the payment site (shiharai saito). In Japan it's usually expressed as a combination of a closing date and a payment date, and even for the same delivery date, the combination can change the wait for payment considerably.
| How it's written | Meaning | If delivered on Sep 10 |
|---|---|---|
| Month-end close, paid end of next month | The month's transactions are paid together at the end of the following month | Oct 31 |
| Month-end close, paid end of the month after next | Paid at the end of the month after next | Nov 30 |
| Close on the 20th, paid on the 10th of next month | Closed every 20th and paid on the 10th of the following month | Oct 10 |
| Pay per invoice | Paid for each invoice | Depends on the invoice due date |
If you deliver right after the closing date, payment arrives almost a month later because you have to wait for the next close. A delivery on September 10 waits 20 days for the month-end close, then is paid at the end of the following month — about 50 days in total. For cash-flow planning, it's more realistic to think in terms of the actual number of days from delivery to payment rather than the nominal payment site.
What to do when the due date falls on a weekend or holiday
It's not unusual for the end of the month or the 10th to fall on a weekend or public holiday. Whether the payment moves earlier or later is decided by the contract or the business practice between the parties.
- Move to the next business day: Article 142 of Japan's Civil Code provides that when the last day of a period is a holiday and there is a custom of not doing business on that day, the period ends on the following day. This practice is based on that idea.
- Move to the previous business day: The payer transfers on the business day before the holiday to avoid paying late. Because the recipient isn't disadvantaged, this is widely used.
- Follow the contract first: If the contract says something like “if the payment date falls on a bank holiday, it shall be the preceding business day”, follow that.
For example, October 31, 2026 is a Saturday. The next business day would be Monday, November 2; the previous business day would be Friday, October 30. Deciding internally which rule you use means you don't have to make the call every month.
Bank holidays and when transfers arrive
Even if your company is open, transfers don't move when banks are closed. Bank holidays in Japan are set by the Banking Act: Saturdays, Sundays and public holidays, plus December 31 through January 3.
| When you send the transfer | When it arrives | Notes |
|---|---|---|
| Business-day morning | Same day | Same-day processing at most banks |
| Business-day evening or later | Same day or next business day | Cut-off times vary by bank |
| Weekend or public holiday | Next business day | Can be instant between banks that participate in the More Time system |
| December 31 – January 3 | January 4 or later | Banks are closed over the New Year |
Since 2018 the Zengin System's More Time system has let transfers between participating banks arrive instantly even at night and on holidays. Not every bank participates, though, and corporate services are sometimes excluded. Avoid sending transfers at the last minute; processing them by the previous business day is the reliable approach.
Rules that affect payment due dates
Payment terms can be set by agreement between the parties, but for some kinds of transactions the law caps them. Subcontracting is the best-known example.
- Under Japan's Subcontract Act, the due date for subcontracting payments must be set “within 60 days of receiving the goods, and as short as possible”.
- If no due date is set, the date of receipt is deemed the due date; if a due date more than 60 days out is set, the day before 60 days have passed since receipt is deemed the due date.
- Failing to pay by the due date makes the payer liable for late-payment interest.
- For construction contracts, the Construction Business Act sets rules such as paying within one month of receiving payment from the client.
With “month-end close, paid end of next month”, goods delivered right after the close wait up to about 60 days. If goods delivered at the start of a month are paid at the end of the month after next, the wait exceeds 60 days, so take care when setting due dates for subcontracting. Rounding consumption tax on invoices is covered in Invoice Tax Rounding.
Checking due dates with the tool
Conditions like “must arrive within N business days” are easy to get wrong in your head. The business days calculator lets you work out dates under conditions close to a bank calendar.
- 1
Match the closed days to the bank
Choose “Weekends & holidays off”, turn on “Treat the New Year break (12/29–1/3) as closed”, and remove December 29 and 30 from the extra closed days to get close to the bank holiday calendar.
- 2
Get the due date on the “N business days after/before” tab
Enter the number of days in the payment terms, counting from the date you received the invoice or the closing date. A negative number gives dates like “3 business days before the due date”.
- 3
Check whether the due date is a closed day
To see whether a particular day, such as the end of the month, is a business day, look at the surrounding dates on the “Business days in a period” tab. If it's a closed day, check both the previous and the next business day.
- 4
Share the conditions as a link
Press “Copy link to these conditions” to create a URL that includes the dates. It's handy when you want accounting or a supplier to check using the same assumptions.
If you're unsure how to count the starting day, see How to Count Business Days; the difference between your company calendar and the bank calendar is covered in Business Days vs Working Days vs Weekdays. How to build the data file for sending many transfers to a bank at once is explained in How to Build a Zengin Format File.
FAQ
- What does “month-end close, paid at the end of the following month” mean?
- Transactions from the 1st to the last day of a month are closed together and paid on the last day of the next month. Something delivered on September 10 is closed on September 30 and due on October 31 — about 50 days from delivery to payment. Delivering right after a closing date gives the longest wait, so cash flow is easiest to track by thinking from the closing date.
- If a payment due date falls on a weekend or holiday, do you move it earlier or later?
- If the contract specifies, follow it. If not, the common practice is to move payment up to the previous business day. Article 142 of the Civil Code says that when the last day is a holiday and there's a custom of not doing business that day, the period ends on the next day, so moving to the next business day also has a legal basis. Still, payers usually choose to pay early to avoid being seen as late.
- If I send a transfer on Friday, will it arrive on Saturday?
- In most cases, a transfer made within the bank's cut-off time on a business day arrives the same day. Weekends and public holidays are bank holidays, so as a rule it arrives on the next business day. Between banks participating in the More Time system, which has operated since 2018, transfers can arrive instantly even at night and on holidays. Not every bank or service supports it, though, so avoid last-minute transfers.
- By when should year-end payments be sent?
- Banks are closed from December 31 to January 3, so the year's last transfer processing is December 30, and earlier when the 30th falls on a weekend. If payment must arrive within the year, finish the procedure by the morning of the last business day in December. Government offices close from December 29, so payments to authorities have even earlier deadlines.
- Is there a maximum payment term?
- For subcontracting, the Subcontract Act requires the due date to be set within 60 days of receiving the goods and as short as possible. If no due date is set, the date of receipt is deemed the due date; if a date beyond 60 days is set, the day before 60 days have passed since receipt is deemed the due date. For other ordinary transactions, the parties can agree on terms freely.
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