Payroll and Benefits Guide Taiwan

Employer

Employer Payroll Contributions

Employee

Employee Payroll Contributions

Employee Income Tax

* Any employer shall not discriminate against any disabled candidates or refuse employment due to their disability. In accordance with the provisions of Paragraph 2 of Article 38 in the “People with Disabilities Rights Protection Act,” any company with fewer than 67 employees shall employ people with disabilities at numbers no less than 1% of the total number of employees and shall not be less than one person.

Failure to do so will subject the employer to make a contribution to the Disabled Employment Funds, the contribution amount is based on the required number of disabled employees multiplied by the statutory monthly minimum wage.

The employer is not required to report the recruitment of employees with disabilities to the government. The government will obtain such information from the enrollment of social insurance for such employees.

General

Taiwan’s comprehensive labor rights protection system is primarily based on the Labour Standards Act, which stipulates the basic wage, working hours, weekends and holidays, and other primary working conditions. For persons paid by the month, the minimum monthly wage is TWD 26,400 and the minimum hourly wage is TWD 176.

Payroll Cycle

The payroll cycle in Taiwan is generally monthly and payments are usually paid on the 15th of each month.

13th Salary

Although it is not mandatory, often 13th and 14th-month salaries are provided and paid before the Chinese new year. Festival bonus is also common before the Dragon Boat Festival and Mid-Autumn Festival.

General

The maximum number of working hours are eight hours per day and 40 hours per week, up to a maximum of 12 hours per day, inclusive of overtime. In Taiwan, it is mandatory to have two days off every seven days. One of these days off is compulsory and the other day is flexible and can be worked and paid as overtime.

Overtime

Work in excess of the standard weekly working hours is considered overtime and is regulated by the employment contract or collective agreements.
The employer must pay overtime as follows:

• First two hours of overtime: 134% of the regular salary rate
• Following two hours of overtime: 167% of the regular salary rate

Employees can work a maximum of 12 hours per day including overtime and a total of 46 overtime hours per month.

Working Week

Monday–Friday

Paid Time Off

The employment contract determines paid leave in Taiwan as dependent on the completed years of service.

Annual leave is accrued as follows:

• 6 months to less than 1 year of employment: 3 days’ paid leave
• 1 year of employment: 7 days’ paid leave
• 2 years of employment: 10 days’ paid leave
• 3 years of employment: 14 days’ paid leave
• 5 years of employment: 15 days’ paid leave
• One additional day is provided for each year of service following the completion of 10 years (to a maximum of 30 days)

Public Holidays

Holidays falling on Sundays are usually moved to another day in lieu.

Sick Days

There are two types of sick leave in Taiwan. For employees who are sick but do not require hospitalization, sick leave entitlement is 30 days per year paid at 50.00% of the regular salary rate. When an employee’s sickness is covered by labor insurance and there’s a difference in the amount due and the regular salary rate of pay, the employer must pay the difference.

Sick leave entitlement increases to twelve months when the employee is hospitalized.

Taiwan’s government will stop covering the COVID-19-related medical expenses of foreign nationals without National Health Insurance (NHI) cards from 2024.

Maternity Leave

Employees are entitled to eight weeks of paid maternity leave at 100.00% of the regular salary rate of pay for employees with a minimum of six months of employment. If the employee has not been employed for the minimum period, maternity pay reduces to 50.00%.
In addition, pregnant employees are entitled to five days’ leave prior to birth for medical check-ups.

Paternity Leave

Employees are entitled to seven days of paid paternity leave at the rate of 100% of the regular pay.

Parental Leave

Employees may apply for parental leave after being in service for six months. The period of this leave is until their children reach the age of three years old but may not exceed two years. When employees are raising over two children at the same time, the period of their parental leave shall be computed aggregately and the maximum period shall be limited to two years received by the youngest child.

The parental leave allowance shall be 60% of the insured person’s average monthly insurance salary six months prior to the month the person went on parental leave. For each child, the parent may, on an aggregated basis, receive a maximum of six months’ allowance. This allowance is covered by the Bureau of Labor Insurance.

Other Leave

In the event of the death of an immediate family member, an employee is entitled to up to eight days’ leave.
National Service is a paid official leave granted to an employee who is required for education or duty of national service.

Termination Process

It is common to use a mutual term agreement to end the employment relationship. The terms of this agreement vary case by case.

Notice Period

Notice periods within Taiwan are as follows:

• 3 months to 1 year of employment: 10 days’ notice
• 1-3 years of employment: 20 days’ notice
• Over 3 years of employment: 30 days’ notice

Severance Pay

Generally, severance is 50% of the average monthly pay per year of service, up to a maximum of six months’ pay. For foreigners and local employees that are still under the LSA pension system, severance is one month’s average pay for each year of service.

Probation Period

The probation period in Taiwan for permanent definite employment is generally three months.

General

• Travel insurance
• Housing allowances
• Festival bonuses (holidays bonuses)
• Meal allowances
• Housing allowances to expatriates and some senior-level executives
• Medical benefits are typically extended to employees’ spouses and dependent children

VISA

Work permits are issued by the Council of Labor Affairs (CLA) upon request from a Taiwanese employer.
Work permits are valid for up to three years, although an employer can apply for an extension on behalf of an employee, which the employer should submit within four months of the expiration date. When an employee changes employers after arriving in Taiwan, the new employer must apply for a new work permit. In addition, the previous employer must apply to have the original work permit canceled with the Council of Labor Affairs.
When the permit is issued in a foreign country, it must be verified by a representative from a local Taipei Economic and Cultural Office or Taiwan representative office in the country which issued it.
There is an approved list of employment for foreign nationals in Taiwan, including school or foreign-language teachers, specialized or technical experts, a director, executive, or manager of a business set up by or invested in by a foreigner.

General

The Government of Taiwan passed a work from home regulation requiring employers to provide remote employees with the necessary tools and equipment to perform the job which should include the use of ergonomically sound work equipment and up to date software on electronic devices.

Employers are required to pay for any maintenance of such tools and equipment as needed and provide education and training on mental and physical health to ensure the wellbeing of their remote employees.

General

5% standard rate.

Companies looking to hire locally in Taiwan without a registered foreign subsidiary can check out our payroll service in Taiwan.