Employment contracts in Taiwan can be verbal or written, but most are in writing. They can be in the local language or in English, provided that both the employer and employee are comfortable with and understand the language. Employment contracts should include:

• place of work,

• salary, payment method (check, bank transfer) and payment duration,

• salary details,

• working hours,

• annual leave,

• work commencement date, and

• company policies.

For persons paid by the month, the minimum monthly wage is TWD 27,470. The hourly minimum wage is TWD 183.

Common Benefits

Leaving service benefits (LSB)

Life, accident, and business travel insurance

Housing allowances – Mainly provided to expatriates and some senior-level executives and are included in taxation. Most multinational companies provide these enhanced benefits to attract and retain local talent.

Meal Allowance – No legally mandated amount of meal allowance, employers can decide on their own policy. Non-taxable within TWD 3,000 per month.

Medical benefits – Optional, supplemental medical plans extended to employees’ spouses and dependent children.

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 are allowed to work up to a maximum of 12 hours per day, inclusive of overtime, with a total limit of 46 overtime hours per month.

Remote Work

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.

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. To request this leave the worker should file an application in writing 10 days in advance.

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)

Bereavement Leave – In the event of the death of an immediate family member (parent, foster-parent, step-parent, spouse) a worker shall be entitled to 8 days of funeral leave with pay. On the death of grand-parent, son or daughter, parent of spouse, foster-parent or step-parent of spouse, a worker shall be entitled to 6 days of funeral leave with pay. On the death of great-grandparent, brother or sister, grand-parent of spouse, a worker shall be entitled to 3 days of funeral leave with pay.

Marriage Leave – A worker is entitled to 8 days of wedding leave with pay.

National Service – is official leave with pay granted to an employee who is required for education or duty of national service.

Leave for Personal Matters – Workers may take up to 14 days of unpaid leave annually to deal with personal matters.

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

Date Day Holiday Notes

1 Jan 2024 - Monday - Founding Day of the Republic of China

8 Feb 2024 - Thursday - Chinese New Year

9 Feb 2024 - Friday - Chinese New Year

10 Feb 2024 - Saturday - Chinese New Year

11 Feb 2024 - Sunday - Chinese New Year

12 Feb 2024 - Monday - Chinese New Year

13 Feb 2024 - Tuesday - Chinese New Year

14 Feb 2024 - Wednesday - Chinese New Year

28 Feb 2024 - Wednesday - Peace Memorial Day

4 Apr 2024 - Thursday - Tomb Sweeping Day

5 Apr 2024 - Friday - Tomb Sweeping Day Holiday

1 May 2024 - Wednesday - Labor Day

10 Jun 2024 - Monday - Dragon Boat Festival

17 Sep 2024 - Tuesday - Mid-Autumn Festival

10 Oct 2024 - Thursday - National Day

Taiwan has a single-payer universal healthcare system.

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

An employer can terminate an employment contract with notice (or with pay in lieu of notice) and with severance pay only in one of the following circumstances:

● Stoppage of business or a transfer of ownership.

● Business losses or curtailment of business operations.

● Suspension of operations for more than one month due to a force majeure event.

● Alteration of the business nature, forcing a reduction in the number of employees where those employees cannot be reassigned to other suitable positions.

● The employee is incapable of performing the tasks assigned.

The employer must give the former employee proof of termination of the employment contract and documentation regarding the last day of work. The employee and employer should both sign these documents. An employer can terminate an employment contract without advance notice or severance pay only in one of the following circumstances:

● Misrepresentation of the facts by the employee at the time the labour contract was signed which leads, or may lead, to the employer suffering damage.

● Acts of violence by the employee against the employer, the employer’s family or representative, or other employees.

● Serious breaches by the employee of the employment contract or work rules.

● The employee has been sentenced to temporary imprisonment in a final judgment, which cannot be suspended or commuted to a fine.

● Purposeful damage or abuse to the employer’s property by the employee.

● Intentional disclosure by the employee of the employer’s technological or business secrets.

● The employee’s absence from work for three consecutive days, or for six days in a month, without justifiable reason.

The minimum period of notice required for an employer to terminate an employee:

● Employed for more than 3 months, but less than 1 year: 10 days’ notice.

● Employed for more than 1 year, but less than 3 years: 20 days’ notice.

● Employed for more than 3 years: 30 days’ notice.

Notice Period

The minimum period of notice required for an employer to terminate an employee:

● Employed for more than 3 months, but less than 1 year: 10 days’ notice.

● Employed for more than 1 year, but less than 3 years: 20 days’ notice.

● Employed for more than 3 years: 30 days’ notice.

Once an employee has received notice, the worker may ask for leave during work hours (not more than 2 days a week), for the purpose of finding a new job. During this time the employee must still receive their wages.

If an employer dismisses an employee without providing the requisite notice period, the employer must pay wages for the whole notice period.

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

In Taiwan, there isn’t a predetermined probation period. The Act gives the flexibility to employers and employees to decide the length of the probation period. There isn’t a maximum limit for this duration. However, typically, the probation period is set for 3 months.

Employer Payroll Contributions
7.70% - Labor Insurance

0.70% - Employment Insurance

6.00% - Pension Fund

4.84% - National Health Insurance

2.11% - National Health Insurance -Supplementary Premium

0.12% - Workers’ Compensation

18.202-20.312% - Total Employment Cost

Employee Payroll Contributions

2.20% - Labor Insurance

0.20% - Employment Insurance

1.55% - National Health Insurance contribution is applied on income between 27,470 TWD and 219,500 TWD.

4.651% - Total Employee Cost

Employee Income Tax

5.00% - Up to 590,000 TWD

12.00% - 590,001 TWD – 1,330,000 TWD

20.00% - 1,330,001 TWD – 2,660,000 TWD

30.00% - 2,660,001 TWD – 4,980,000 TWD

40.00% - 4,980,001 TWD and above

Non Resident Income Tax

18% - Flat rate

*The Minimum withholding tax threshold for monthly incomes, part-time and non-monthly incomes is 88,501 TWD

* 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.

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.

Authority Payment Dates Methods

國稅局

Tax Authority - Monthly; Due by the 10th of the following month. - Payment amount withdrawl from local bank account to pay the tax.

健保局

National Health Insurance Bureau - Monthly; Due by the 15th of the next 2 months. - Ex. January premium, due date will be March 15th. -Option 1: Payment amount withdrawl from local bank account to pay the premium.
Option 2: Auto deduction from local bank account (need to submit the applications to the authority and bank).

健保局

National Health Insurance Bureau - Monthly; Due by the 15th of the next 2 months. - Ex. January premium, due date will be March 15th. - Payment amount withdrawl from local bank account to pay the premium.

勞保局

Labor Insurance Bureau - Monthly; Due by the 15th of the next 2 months. - Ex. January premium, due date will be March 15th. - Option 1: Payment amount withdrawl from local bank account to pay the premium.
Option 2: Auto deduction from local bank account (need to submit the applications to the authority and bank).

勞保局

Labor Insurance Bureau - Monthly; Due by the last date of the next 2 months. - Ex. January pension, due date will be March 31st.-
Option 1: Payment amount withdrawl from local bank account to pay the premium.
Option 2: Auto deduction from local bank account (need to submit the applications to the authority and bank).

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.

The standard VAT rate in Taiwan is 5%.