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Payroll in Taiwan
Running payroll in Taiwan means managing 5 different social insurance categories, labor pension contributions, and tax deadlines that follow the lunar calendar for bonuses. Your employees expect their salary on time, but Taiwan's complex contribution system can trip up even experienced payroll teams.
Taiwan payroll stands out for several unique requirements that catch international companies off guard. The 13th month bonus isn't optional—it's a legal requirement paid before Lunar New Year. Your employees contribute to both Labor Insurance and National Health Insurance, while you handle separate employer portions plus labor pension contributions. Monthly salaries are the standard, but many companies also provide quarterly or annual performance bonuses that trigger different tax calculations.
Taiwan payroll at a glance
Taiwan also requires labor pension contributions to individual employee accounts—think of it as a mandatory 401(k) where you contribute 6% of salary and employees can add up to another 6%. The Labor Standards Act governs overtime calculations, which can get complex during Taiwan's frequent national holidays.
Quick Taiwan payroll snapshot:
- Currency: TWD (New Taiwan Dollar)
- Standard pay cycle: Monthly (salary paid by 5th of following month)
- Tax year: Calendar year (January 1 - December 31)
- Key employer obligations:
- Labor Insurance contributions (varies by salary bracket)
- National Health Insurance (5.17% employer rate)
- Labor pension contributions (6% of salary)
- 13th month bonus payment
One Global Payroll handles all Taiwan contribution calculations, tax withholdings, and statutory payments, so you can focus on growing your team instead of decoding insurance brackets.
How does payroll work in Taiwan?
The Taiwan payroll cycle follows a monthly schedule. Most companies process payments on the 5th of the following month, though some pay on the last working day of the current month.
Monthly payroll cycle
Calculate payroll
Last week of monthProcess salary, overtime, and deductions
Generate payslips
1-2 days before paymentCreate Chinese and English payslips
Process payment
5th of following month or last working dayTransfer to employee bank accounts
Payment frequency and timing
Taiwan law requires monthly salary payments for most employees. You must pay salaries by the 5th day of the following month at the latest. Many companies choose to pay on the last working day of the current month to improve cash flow and employee satisfaction.
Hourly workers and daily wage earners can be paid more frequently - weekly or bi-weekly payments are acceptable. However, you still can't exceed the 5th day rule for any payment period.
Payment deadline
All salary payments must be completed by the 5th day of the following month. Late payments can result in fines and labor disputes.
Year-end bonuses
Taiwan has strong cultural expectations around year-end bonuses, though they're not legally mandatory. Most companies pay between 1-3 months of additional salary as a year-end bonus.
The 13th month bonus is standard practice across industries. It's typically paid in January or February, before Chinese New Year. Some companies split this into two payments - one in July (mid-year bonus) and one before Chinese New Year.
Year-end bonuses are subject to regular income tax and labor insurance contributions. There's no special tax treatment, so they're taxed at the employee's marginal rate.
Holiday and vacation pay
Annual leave must be paid at the employee's regular daily wage rate. Taiwan calculates daily wages by dividing the monthly salary by 30 days, regardless of actual working days.
Unused annual leave must be paid out when employment ends. You can't force employees to forfeit unused vacation days. The calculation uses the same daily wage formula.
Public holiday pay depends on whether the employee works:
- Holiday off: Regular salary continues
- Holiday worked: Double pay (regular salary plus holiday premium)
Payment methods
Bank transfer is the standard and most practical payment method. You'll need each employee's local bank account details, including their Chinese name exactly as it appears on their bank account.
Cash payments are legally acceptable but impractical for most companies. If you pay in cash, you need signed receipts and must maintain detailed records.
Foreign currency payments aren't permitted for Taiwan-based employees. All salaries must be paid in Taiwan dollars (TWD), even if your company operates internationally.
Bank account setup
Help new employees open local bank accounts quickly. Most major banks can process applications within 1-2 business days with proper documentation.
Payslip requirements
Payslips must include specific information in Chinese. While English translations are helpful, the Chinese version is legally required.
Required payslip elements:
- Employee name and ID number
- Pay period dates
- Basic salary breakdown
- Overtime hours and payments
- All deductions (taxes, labor insurance, health insurance)
- Net pay amount
- Year-to-date totals
Electronic payslips are acceptable if employees can access them easily. Many companies use both electronic delivery and provide printed copies upon request.
You must retain payslip records for five years. This includes both the payslip copies and underlying calculation records.
What taxes apply in Taiwan?
Income tax in Taiwan ranges from 5% to 40%, with the top rate kicking in at NT$4,530,000.
Taiwan uses a progressive tax system with six brackets. The first NT$560,000 is tax-free, which helps reduce the burden on lower-income employees.
| Annual Income (NT$) | Tax Rate |
|---|---|
| NT$0 - 560,000 | 0% |
| NT$560,001 - 1,260,000 | 5% |
| NT$1,260,001 - 2,520,000 | 12% |
| NT$2,520,001 - 4,530,000 | 20% |
| NT$4,530,001 - 10,310,000 | 30% |
| Above NT$10,310,000 | 40% |
Tax year runs January to December
Taiwan follows the calendar year for tax purposes. Annual reconciliation must be completed by May 31 of the following year.
Withholding requirements
You're responsible for withholding income tax from every payroll run. Register for payroll tax withholding with the National Taxation Bureau before your first pay date.
Monthly withholding tax returns are due by the 10th of the following month. For example, January withholdings must be filed by February 10th. The penalty for late filing is 3% of the tax due, with an additional 1% for each month of delay.
Annual reconciliation happens between February 1 and May 31. Employees can file their own returns or authorize you to handle it for them.
Tax registration
New employers need a Business Administration Number (BAN) and must register for payroll tax withholding within 15 days of hiring your first employee.
You'll need your company registration documents, a list of employees, and estimated monthly payroll amounts. The registration process typically takes 5-7 business days.
Special tax considerations
Non-resident employees face different rules. If they stay in Taiwan for less than 183 days in a tax year, they're taxed at a flat 18% rate on Taiwan-sourced income. No tax-free allowance applies.
Resident foreigners (183+ days) use the same progressive rates as locals and can claim the NT$560,000 exemption.
Taiwan has tax treaties with 34 countries that may reduce withholding rates for certain types of income. Check treaty provisions for executives and specialized personnel.
Common tax mistakes
Incorrect residency determination is the biggest error. Track days carefully - the 183-day test determines which tax regime applies.
Missing supplemental income withholding catches many employers. Bonuses over NT$84,000 annually face a flat 5% withholding rate in addition to regular income tax.
Late monthly filings cost 3% of taxes due immediately, plus 1% monthly thereafter. A NT$50,000 withholding filed two months late costs NT$4,000 in penalties.
Employer contributions in Taiwan
A NT$60,000 salary in Taiwan actually costs you NT$69,540. Here's the breakdown.
Taiwan's employer contributions add 15.9% to every salary through mandatory social insurance and pension contributions. You'll register with multiple agencies and handle monthly payments with strict deadlines.
Contribution breakdown
| Contribution Type | Employer Rate | Employee Rate | Monthly Cap |
|---|---|---|---|
| Labor Insurance | 8.5% | 11% | NT$45,800 salary |
| National Health Insurance | 5.17% | 5.17% | - |
| Labor Pension | 6% | 6% (voluntary) | NT$150,000 salary |
| Employment Insurance | 0.23% | 0.23% | NT$45,800 salary |
| Total | 15.9% | 16.4% | - |
| Employee pays | Employer pays | |
|---|---|---|
| Labor Insurance | 11% | 8.5% |
| Health Insurance | 5.17% | 5.17% |
| Labor Pension | 6% | 6% |
| Employment Insurance | 0.23% | 0.23% |
Total employer cost calculation
For a NT$60,000 monthly salary:
- Base salary: NT$60,000
- Labor Insurance: NT$5,100 (8.5%)
- National Health Insurance: NT$3,102 (5.17%)
- Labor Pension: NT$3,600 (6%)
- Employment Insurance: NT$138 (0.23%)
Total monthly employer cost: NT$69,540 Annual cost multiplier: 1.159
Contribution caps and limits
Labor Insurance and Employment Insurance cap at NT$45,800 monthly salary. Higher earners save you money on these contributions.
For employees earning NT$100,000 monthly:
- Labor Insurance caps at NT$3,893 (not NT$8,500)
- Employment Insurance caps at NT$105 (not NT$230)
- Health Insurance and Labor Pension have no caps
Labor Pension caps at NT$150,000 salary, meaning maximum monthly contribution is NT$9,000.
Registration requirements
You must register with three agencies before hiring:
Bureau of Labor Insurance
- Register within 3 days of hiring
- Provide employment contract and ID documents
- Obtain Labor Insurance certificate
National Health Insurance Administration
- Register within 3 days of hiring
- Submit employee health insurance application
- Receive NHI card within 7 days
Labor Pension Bureau
- Register within 15 days of hiring
- Open pension account for employee
- Provide pension handbook
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Payment deadlines and penalties
All contributions are due by the 15th of the following month. Late payments trigger immediate penalties.
Labor Insurance and Employment Insurance: 0.1% daily penalty after 15th National Health Insurance: 0.1% daily penalty plus potential service suspension Labor Pension: 0.2% daily penalty after 15th
Payment deadline critical
Missing the 15th deadline starts daily penalties immediately. Set up automatic transfers to avoid costly mistakes.
Pay through designated bank transfers or online systems. Cash payments aren't accepted for any contributions.
Skip the complexity. We manage tax calculations, contributions, and compliance in 150+ countries.
Leave and benefits in Taiwan
Employees in Taiwan get 7 days minimum vacation in their first year. That's just over a week of paid leave to calculate, but it scales up significantly with tenure.
How does annual leave work in Taiwan?
Taiwan's vacation system rewards loyalty. New employees start with 7 days, but this jumps to 10 days after one year, then 14 days after two years. By year 10, employees earn 30 days annually.
Vacation pay calculation
Pay vacation days at the employee's regular daily rate. If someone earns NT$60,000 monthly, their daily rate is NT$2,000 (monthly salary ÷ 30 days). A 5-day vacation costs NT$10,000 in payroll.
Carryover and payout rules
Employees can carry unused vacation forward for up to two years, but you must pay out any remaining days when they leave. This creates a potential liability on your books.
What about sick leave entitlements?
Taiwan provides 30 days of sick leave annually, but the payment structure splits between you and the employee.
| Employer pays 100% | Employee pays (unpaid) | |
|---|---|---|
| First 30 days | 100% salary | N/A |
| Days 31+ | N/A | Unpaid leave |
You'll pay full salary for the first 30 sick days each year. After that, additional sick leave is unpaid. Employees need a medical certificate for sick leave longer than 3 consecutive days.
The good news? No social insurance complications here - you handle sick pay directly through payroll.
How does parental leave affect payroll?
Maternity leave
Female employees get 8 weeks of maternity leave at full pay. You're responsible for the entire cost - there's no government reimbursement for regular maternity leave.
For high-risk pregnancies, this extends to 10 weeks. The additional 2 weeks are also at full pay and your expense.
Paternity leave
Male employees get 5 days of paternity leave at full pay when their child is born. This must be taken within 15 days of the birth.
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Taiwan public holidays 2026
| Date | Holiday | Notes |
|---|---|---|
| January 1 | New Year's Day | Fixed date |
| January 28-30 | Lunar New Year | 3-day period |
| February 28 | Peace Memorial Day | Fixed date |
| April 4 | Children's Day | Combined with Tomb Sweeping |
| April 5 | Tomb Sweeping Day | Traditional holiday |
| May 1 | Labor Day | For employees only |
| June 14 | Dragon Boat Festival | Lunar calendar date |
| September 21 | Mid-Autumn Festival | Lunar calendar date |
| October 10 | National Day | Double Ten Day |
Work on public holidays requires double pay - your regular wage plus a 100% premium. Most businesses simply close instead.
What mandatory benefits affect payroll?
Labor insurance premiums
You'll deduct labor insurance premiums from employee paychecks monthly. The total rate is 11.5% of insured salary, split between employee (2%), employer (7%), and government (2.5%).
National health insurance
Health insurance premiums are 5.17% of salary. Employees pay 30%, you pay 60%, and the government covers 10%. For someone earning NT$50,000 monthly, that's NT$775 from their paycheck and NT$1,551 from your budget.
Labor pension fund
You'll contribute 6% of each employee's salary to their individual pension account. Employees can voluntarily contribute up to another 6%, which you'll deduct from their payroll and remit together with your contribution.
This isn't negotiable - every employee gets the 6% employer contribution, regardless of their voluntary participation.
Compliance requirements in Taiwan
Taiwan tax authorities audit 15% of employers annually. Here's what they check.
Audit focus areas
Tax authorities prioritize payroll tax compliance, social insurance contributions, and proper employment documentation during their reviews.
What monthly filings do you need to submit?
Taiwan requires several monthly submissions that keep your payroll compliant. Miss these deadlines and penalties add up fast.
Payroll tax withholding
Submit employee income tax withholdings by the 10th of the following month. For January 2026 payroll, your deadline is February 10th, 2026.
File through the eTax portal (etax.nat.gov.tw) using your business tax ID number. The system accepts submissions 24/7, but don't wait until the last day. Technical issues can cause delays.
Late filing triggers penalties of NT$1,500 per day until you submit. The penalty cap is NT$15,000, but interest keeps accruing on unpaid amounts.
Social insurance contributions
Labor Insurance and National Health Insurance contributions are due by the last day of the following month. January 2026 contributions must be paid by February 28th, 2026.
Submit through the Bureau of Labor Insurance e-services platform. You'll need to upload payroll data showing gross wages, contribution calculations, and employee details.
Monthly compliance timeline
Process payroll
Month-endCalculate wages and deductions
File tax withholdings
By 10thSubmit through eTax portal
Pay social contributions
By month-endSubmit via BLI platform
What annual reporting is required?
Year-end brings detailed reporting requirements that affect both employer obligations and employee tax situations.
Annual reconciliation
Complete your annual payroll tax reconciliation by May 31st, 2026 for the 2026 tax year. This reconciles all monthly withholdings against actual tax liability.
The reconciliation covers all employees who earned more than NT$408,000 in 2026. Include salary, bonuses, overtime, and taxable benefits in your calculations.
Employee tax statements
Issue withholding statements to all employees by January 31st, 2027. These statements show total earnings, tax withheld, and social insurance contributions for 2026.
Employees need these statements to file their individual tax returns by May 31st, 2027. Provide both physical and digital copies through your payroll system.
Government reporting
Submit your annual payroll summary to the tax authority by January 31st, 2027. This detailed report includes:
- Total wages paid to all employees
- Tax withholdings by month
- Social insurance contribution summaries
- New hire and termination data
Annual reporting checklist
- Complete tax reconciliation
Due May 31st
- Issue employee tax statements
Due January 31st following year
- Submit payroll summary
Due January 31st following year
- Maintain 5-year records
Digital copies acceptable
What employee documentation must you maintain?
Taiwan requires specific employment documentation that must meet local language and content requirements.
Employment contracts
All employment contracts must be in Traditional Chinese and include mandatory elements. Contracts in English only aren't legally valid, though bilingual contracts are acceptable.
Required contract elements include:
- Specific job duties and responsibilities
- Base salary and payment schedule
- Working hours and overtime policies
- Leave entitlements and calculation methods
- Termination notice periods (minimum 30 days for indefinite contracts)
Payslip requirements
Issue detailed payslips within 5 days of each pay period. Taiwan law specifies exact information that must appear on every payslip:
- Employee name and ID number
- Pay period dates
- Base salary, overtime, and allowances
- All deductions with specific amounts
- Net pay amount
- Year-to-date totals for earnings and deductions
Payslips must be in Traditional Chinese. Digital delivery is acceptable if employees can access and print them easily.
Record retention
Maintain all payroll records for 5 years from the end of the employment relationship. This includes contracts, payslips, time records, and tax documents.
Digital storage is acceptable, but records must be easily retrievable and printable during audits. Cloud storage is permitted if you can guarantee access.
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What are the penalties for non-compliance?
Taiwan's penalty structure escalates quickly for payroll violations. Understanding these costs helps prioritize your compliance efforts.
| Violation | Penalty | Additional consequences |
|---|---|---|
| Late tax filing | NT$1,500 per day (max NT$15,000) | Interest on unpaid amounts |
| Missing payslip elements | NT$20,000 - NT$1,000,000 | Repeat violations double |
| Incorrect withholding | 5% of underpayment | Employee tax liability transfers |
| Missing employment contracts | NT$90,000 - NT$450,000 | Per employee violation |
| Late social insurance payments | 0.1% per day of contribution | Coverage gaps affect employees |
| Inadequate record keeping | NT$60,000 - NT$300,000 | Extended audit periods |
Penalty escalation
First-time violations often receive warnings, but repeat offenses within two years face doubled penalties. The Ministry of Labor maintains a violation database that tracks employer compliance history.
Serious violations can result in business license suspension for up to 30 days. This affects companies with multiple violations or those that fail to correct issues within specified timeframes.
High-risk violations
Incorrect social insurance contributions and missing employment contracts trigger the highest penalties and most frequent audits.
Which regulatory bodies oversee payroll?
Multiple Taiwan agencies regulate different aspects of payroll compliance. Each has specific responsibilities and enforcement powers.
Ministry of Finance - Taxation Bureau
Oversees income tax withholding and annual reconciliation requirements.
- Website: www.mof.gov.tw
- eTax portal: etax.nat.gov.tw
- Hotline: 0800-000-321 (Mandarin only)
Handles tax audits, penalty assessments, and withholding compliance. Regional offices provide in-person support for complex issues.
Ministry of Labor
Regulates employment contracts, working conditions, and labor insurance.
- Website: www.mol.gov.tw
- Labor standards hotline: 1955
- Bureau of Labor Insurance: www.bli.gov.tw
Conducts workplace inspections and investigates employee complaints about payroll violations.
National Health Insurance Administration
Manages health insurance enrollment and contribution collection.
- Website: www.nhi.gov.tw
- Service hotline: 0800-030-598
- Online services: cloudicweb.nhi.gov.tw
Provides employer registration services and handles contribution disputes.
Contact these agencies directly for guidance on complex compliance situations. Most provide English-language support for foreign employers, though response times may be longer than Mandarin inquiries.
Managing Taiwan payroll compliance in-house? See how we simplify it
Recent changes in Taiwan
Minimum wage in Taiwan increased 4.6% in 2026, from NT$27,470 to NT$28,590 per month for full-time employees. The hourly minimum wage rose from NT$183 to NT$190.
This affects your payroll calculations immediately if you have employees earning base wages. Double-check that all January 2026 payments reflect the new rates.
2026 Minimum Wage Update
Monthly: NT$28,590 (up from NT$27,470) | Hourly: NT$190 (up from NT$183) | Effective January 1, 2026
Labor Insurance Premium Adjustments - Effective January 1, 2026
The Labor Insurance premium rate increased slightly from 11.5% to 11.8% of insurable salary. Employers pay 70% of this premium, employees pay 20%, and the government covers 10%.
For an employee earning NT$45,800 (insurable salary ceiling), your monthly Labor Insurance cost increased from NT$3,683 to NT$3,777 - an additional NT$94 per employee.
Employment Insurance Rate Reduction - Effective January 1, 2026
Good news here: Employment Insurance premiums dropped from 1% to 0.9% of insurable salary. This partially offsets the Labor Insurance increase.
The combined effect means your total insurance burden increased by about NT$60 per month for employees at the insurable salary ceiling.
National Pension Contribution Changes - Effective July 1, 2026
The National Pension contribution rate will increase from 9% to 9.5% in mid-2026. This affects employees not covered by Labor Insurance (typically part-time workers under 15 hours per week).
Update your payroll system before July to handle the new 9.5% rate split: employers pay 60% (5.7%), employees pay 40% (3.8%).
Upcoming Changes
Taiwan's Ministry of Labor announced they're reviewing overtime calculation methods for 2027. No concrete changes yet, but expect potential updates to how you calculate overtime premiums for irregular schedules.
The Labor Standards Act amendments regarding flexible working arrangements are still under legislative review, with implementation potentially delayed to late 2026.
Frequently asked questions about payroll in Taiwan
Disclaimer: This guide is for informational purposes only and does not constitute legal or tax advice. Regulations change frequently, so always consult with local experts and official government sources for your specific situation.