Prostitutes as workers: employment status, taxes, pensions, and health insurance

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The women who work at Japanese brothels are not technically “employed.” In most cases, they are not permanently employed by a brothel; rather, they are “registered” there. That means they are essentially working as self-employed.

There are several reasons why most brothels do not hire prostitutes as regular employees. Let us take a closer look at the employment status of prostitutes, and what that means for the ways they pay taxes.

Most prostitutes are self-employed

The majority of prostitutes in Japan work as self-employed individuals. You will see male staff and female prostitutes at a brothel, but only the male staff are actual employees of that establishment. The prostitutes, on the other hand, basically do business by registering with a particular brothel and renting a room there.

Some brothels offer services that are technically illegal, for instance penetrative intercourse, which is forbidden under Japanese prostitution laws. Brothels that do offer intercourse skirt around the law by arguing that when a prostitute has penetrative sex with a client, she does so because she has a personal relationship with the man and made a personal decision to have intercourse with him.

If prostitutes were regular employees of such a brothel, then the brothel would be responsible for any illegal intercourse that happens on its premises, because the law would assume that brothel owners instructed their employees to have intercourse with clients. To avoid being held responsible in this way, brothels “employ” prostitutes by registering them to the establishment rather than outright hiring them as employees.

For the brothel, both the male client and the prostitute are “customers.” The position of the male client is obvious: he is a customer because he pays money to the brothel. However, a brothel obviously cannot function without prostitutes there to service these clients. This is why brothels go out of their way to provide an environment where prostitutes can ply their trade as comfortably and easily as possible.

In the interest of providing a wholesome work environment, some brothels do hire prostitutes as actual employees. In those cases, the employment status of a prostitute is no different from that of any regular company employee, and the information about tax returns provided below does not apply.

Filing income tax returns as a prostitute

To recap, most prostitutes work as self-employed individuals rather than as regular employees of a company. One big difference between these two kinds of workers is the way they have to file income tax returns. Regular employees do not have to file income tax returns themselves. Self-employed individuals, however, have to declare their income themselves. That means most prostitutes have to file their own income tax returns, and pay taxes based on those.

However, only a fairly small percentage of prostitutes actually file income tax returns. Many prostitutes find the process of filing tax returns exceedingly complex, and many are not even aware that they are obliged to declare their income by themselves.

Most brothels, however, withhold some tax at the source by subtracting 10% from a prostitute’s earnings and paying that as tax. In this way, there are many women who actually do pay taxes.

Pension and health insurance payments for prostitutes

Besides income tax, prostitutes also have to pay for their pension and their health insurance. There are different kinds of pension and health insurance plans. Most prostitutes join Japan’s national pension system and the national health insurance system.

Both of these need to be paid for. However, while most prostitutes pay their obligatory national health insurance premiums, relatively few of them contribute to the national pension system. The main reason for this is that many women do not trust the pension system, and doubt whether they will actually be able to receive pensions in the far-off future.

However, there are some women who ignore even the obligatory national health insurance premiums. This is often not because they have no money, but because circumstances make it impossible for them to pay.

Some prostitutes are married women who have escaped from domestic violence. If such a woman changes her certificate of residence to her new location, there is a chance that her husband will discover where she lives. Many women in this situation do not change their certificate of residence at all because they are afraid their husbands will come to attack them again. One consequence of this is that they cannot complete the procedure for renewing their national health insurance registration at their new address. As a result, they end up having to pay very high fees when they have to go to the hospital.

Many of these women do not go to the hospital even when they are very sick, instead trying to self-medicate at home with over-the-counter drugs.

In short, most prostitutes work as self-employed individuals, and the way they have to handle taxes, pension payments, and health insurance is different from regular employees. Men who make use of a prostitute’s services are usually unaware of all this. Knowing more about prostitutes’ circumstances is important for understanding the darker side of the Japanese sex industry.