Employer of Record in Taiwan

Businesses can only operate smoothly in Taiwan if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Taiwan below, to avoid any compliance issues.

Employment Contract Requirements

In Taiwan, two contract types are utilised: fixed term for temporary or short-term positions, and indefinite term for both part-time and full-time roles. These employment contracts do not need to be in formal writing for legal validity, but it is recommended to indicate the following basic employment terms:

• Designated workplace and working hours
• Starting and conclusion date
• Job title and responsibilities
• Vacations and leave entitlements
• Wages
• Rules of conduct
• Work discipline

Onboarding Process

We can help you get a new employee started in Taiwan quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.

For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Taiwan

In Taiwan, standard working hours amount to 8 hours per day or 40 hours per week. A maximum of 12 hours per day may be worked, including overtime. Every seven working days necessitate two days off, with one being obligatory and the other offering flexibility for work, compensated as overtime if utilized. The total weekly working hours must not surpass 48 hours.

Overtime in Taiwan

Overtime work, as outlined in employment contracts or collective agreements, is compensated according to specified rates. Employees can work up to 12 hours daily, including overtime. There is a monthly limit of 46 overtime hours.

The initial 2 hours of overtime receive a rate of one-third over and above the regular salary, while the subsequent 2 hours are compensated at a rate of two-thirds over and above the regular salary.

Probation Period in Taiwan

While probationary periods are a common practice in Taiwan, they are not explicitly mentioned in the country's Labor Standards Act (LSA). Typically, for permanent definite employment, the probationary period lasts for three months.

Fiscal Year in Taiwan

1 January - 31 December is the 12-month accounting period that businesses in Taiwan use for financial and tax reporting purposes.

Payroll Cycle in Taiwan

The payroll cycle in Taiwan is usually monthly, with employees being paid by the 15th of each month.

Minimum Wage in Taiwan

The minimum wage for employees in Taiwan is typically 183 TWD per hour, amounting to ~27,740 TWD per month for a typical 40 hour work week.

Bonus Payments in Taiwan

Though not obligatory, employees in Taiwan often receive a 13-month and 14th month salary, which is typically paid before Chinese New Year. Additionally, festival bonuses are often given before the Dragon Boat Festival and Mid-Autumn Festival.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 19.6% on top of the employee salary in Taiwan.

Employee Payroll Tax Contributions

In Taiwan , the typical estimation for employee payroll contributions cost is around 3.95%.

Individual Income Tax Contributions

In Taiwan, individual tax rates are progressive, and tax residents are also subject to a flat-rate Income Basic Tax (IBT) of 20%, applicable to both locals and expats staying in Taiwan for 183 days or more in the tax year.

Pension in Taiwan

A Taiwanese company contributes 6% of Taiwanese employees' earnings to pension funds. Employees can voluntarily contribute 5.1% to National Pension Programs. Labor insurance premiums at 11% cover disability, old-age, and survivor annuities, with employees contributing 6% of monthly earnings to a mandatory individual account.

In Taiwan, work permits and visas are essential for employers hiring foreign workers. The process involves determining the appropriate visa type, submitting applications, providing necessary documentation, and ensuring compliance with Taiwan’s labor regulations. The key visa types include the Employment Gold Card for highly skilled professionals, the Specialized Talent Work Visa for individuals with specialized expertise, the Investor Visa for entrepreneurs, and the Teaching Visa for foreign educators. Employers must meet all requirements and sponsor their employees' visa applications to ensure a smooth employment process.

Mandatory Leave Entitlement in Taiwan

The annual leave entitlement in Taiwan is 3 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Taiwan

Full-time employees in Taiwan are paid for public holidays, which can be either fixed or based on the lunar calendar. Employers and employees can negotiate adjustments, and Taiwan observes various national and public sector holidays, including:

Paid Time Off in Taiwan

In Taiwan, the allocation of paid leave is stipulated by the employment contract and is dependent on the number of years of service completed. The accumulation of annual leave is as follows:

• 6 months to less than 1 year of service: 3 days paid leave
• 1 year of service: 7 days paid leave
• 2 years of service: 10 days paid leave
• 3 years of service: 14 days paid leave
• 5 years of service: 15 days paid leave
• Upon completing 10 years of service, an additional day is provided with a maximum of 30 days

Maternity Leave In Taiwan

Employees are entitled to 8 weeks of fully paid maternity leave at 100% of the regular salary rate, if they have been employed for more than 6 months or at 50% of their regular pay, if the employment duration is less than 6 months. Additionally, they can take 7 days of leave for medical check-ups before childbirth.

Paternity Leave In Taiwan

Spouses are entitled to 7 days of paternity leave with full pay, and the employer is responsible for covering the cost.

Sick Leave In Taiwan

Non-hospitalised sick employees receive 30 days of leave annually at 50% of the regular salary, and if covered by labour insurance, the employer compensates the difference. If an employee needs to be hospitalised, they are entitled to unpaid sick leave for up to 1 year. This period cannot exceed 1 year in each 2 consecutive years.

Parental Leave In Taiwan

Employees with 6 months of service can take up to 2 years of parental leave until their child turns three. The parental leave allowance, provided by the Bureau of Labor Insurance, is 60% of the insured persons average monthly salary for the preceding 6 months. This subsidy is capped at a maximum of 6 months per child. Both parents have a total of 2 years of unpaid parental leave and can negotiate its distribution.

Bereavement Leave

In an event where an employee expreiences the death of an immediate family member, they are eligible for a leave of up to 8 days.

National Service

The National Service is an official paid leave provided to employees who are required for national service duties or education.

Termination Process in Taiwan

Terminating employment should comply with the Labour Standards Act. Mutual termination agreements, subject to case-specific terms, may also be utilised. Both parties must give prior notice, provide payments in lieu, and settle any remaining holidays, payments, or benefits upon termination.

Notice Period in Taiwan

The notice periods in Taiwan extend based on the following length of employment:

• Less than 3 months of service: no notice required
• 3 months to 1 year of service: 10 days notice
• 1-3 years of service: 20 days notice
• More than 3 years of service: 30 days notice

Severance in Taiwan

Severance pay in Taiwan under the Labor Pension Act - required for redundancy or poor performance termination - is typically 50% of the average monthly pay per year, up to a maximum of 6 months' pay. For those under the LSA pension system, including foreigners and local employees, it amounts to one month's average pay per year of employment.