Payroll in Taiwan

Taiwan's statutory default is that wages are paid at least twice a month. Employer and employee can agree otherwise, and wages can also be paid in advance monthly, so a monthly cycle is allowed. Put the agreed payday in the contract and pay gross wages in New Taiwan dollars.

Payday and payslips

Record the payday, explain every lawful deduction and give the employee the calculation details. Keep wage records for five years. A penalty for leaving early, or a training-cost clause, cannot be deducted in advance from earned wages.

The employee's payday is one date. Your insurance, pension and tax remittance dates are separate. The dossier does not set those remittance deadlines, so confirm them with the relevant insurer and tax authority before your first pay run and keep them apart in your payroll calendar.

Extra and year-end payments

There is no statutory thirteenth salary. Check the contract and the bonus policy for any promised payment. Separately, Labor Standards Act Article 29 requires allowances or bonuses from remaining net profits, after the specified taxes, losses, dividends and reserves, for qualifying workers who worked the full preceding year without fault or misconduct. Do not label every year-end payment discretionary.

Contributions and tax withheld

Labour insurance is 11.5% and employment insurance adds 1% where the worker is covered. For ordinary company employees covered by both, the employer pays 70% and the employee 20% of each premium, and the government pays the remaining 10%. That is 8.75% employer and 2.5% employee before rounding, on the applicable insured salary. The general NHI premium rate is 5.17%, with the employee paying a 30% share for themselves and up to three enrolled dependants.

The employer also contributes at least 6% to the labour pension. This is an employer cost and is not deducted from salary. Employers covered by the Labor Standards Act contribute 0.025% of their total monthly insured-salary amount to the Overdue Wage Payment Fund. Occupational-accident insurance is paid by the employer on a separate rate.

For salary withholding, a resident generally follows the monthly withholding table or the employee's choice of 5%. Non-resident withholding is generally 18%, or 6% where the full monthly salary is no more than NT$44,250 in 2026. Establish tax residence from the actual facts and stay period.

Working time that affects pay

The normal limit is eight hours a day and 40 a week. Keep attendance records to the minute for five years. Weekday overtime is paid at least 4/3 of the usual hourly wage for the first two extra hours and 5/3 for the next two. Do not round those multipliers down to 1.33 and 1.66. Normal hours plus overtime generally cannot exceed 12 hours a day, and overtime normally cannot exceed 46 hours a month.

Rest-day and statutory-holiday work have their own calculations. The minimum wage from 1 January 2026 is NT$29,500 a month or NT$196 an hour, and overtime or holiday pay does not count toward it.

Taiwan taxes employment income progressively. Resident individuals do not pay one flat rate on gross salary. The rates apply to net taxable income, which is what remains after the relevant exemptions and deductions. Keep the income year separate from the year in which the tax return is filed.

Income tax bands

For 2026 income, there are five bands for resident individuals. The top rate is 40%.

Each rate applies only to the slice of income inside its band. The dossier for this guide does not set out the amounts of the personal exemptions, standard deduction or credits. Check the current figures with the tax authority or your tax adviser before you tell an employee what their final liability will be.

How withholding works

Withholding during the year is not the same as final tax. For resident employees, salary withholding generally follows the monthly withholding table, or the employee's choice of 5%, subject to the applicable thresholds and exceptions. Whatever is withheld is settled against the final liability when the annual return is filed.

Non-residents are treated differently. Salary withholding is generally 18%. It is 6% where the full monthly salary is no more than 1.5 times the minimum wage, which is NT$44,250 in 2026. Payroll should establish tax residence from the actual facts and the person's stay period, not from nationality or visa type.

Employee deductions from pay

Apart from income tax, employees bear part of the insurance premiums. The percentages below apply to the applicable insured salary, so eligibility and salary brackets matter.

• Labour insurance and employment insurance: the labour-insurance rate is 11.5% and employment insurance adds 1% where the worker is covered. For ordinary company employees covered by both, the employee pays 20% of each premium, the employer 70% and the government 10%. Before rounding, that is 2.5% for the employee and 8.75% for the employer.
• National health insurance (NHI): the general premium rate is 5.17%. The employee pays a 30% share for themselves and up to three enrolled dependants. Use the 2026 salary bracket and the published rounded amounts. Supplementary NHI premiums can apply separately.

Employment-insurance coverage for foreign staff needs care. From 2026, qualifying foreign professionals with permanent residency have employment-insurance coverage. A standard foreign work permit alone does not establish eligibility.

Pension is not an employee deduction. Under the Labor Pension Act, the employer contributes at least 6% and this is not taken from the employee's salary. Employees can choose to contribute up to 6% themselves, which is a voluntary deduction.

Business taxes are a separate matter

The corporate tax rate is 20% and VAT is 5%. These are business and transaction taxes. Neither is a percentage taken out of an employee's salary.

Taiwan has no single employer social security rate. You pay into several separate schemes, each with its own rate and salary base. The cost example below shows how they add up for one salary.

Employer and employee contribution rates

The government pays the remaining 10% of the labour and employment insurance premiums. The percentages above are for ordinary company employees covered by both schemes.

Bases, ceilings and eligibility

Each scheme applies its rate to an insured salary or contribution classification, and the schemes do not all use the same base. The dossier gives no bracket ceilings or floors, so take the current figures from the published insured-salary and pension contribution tables. For NHI, use the 2026 salary bracket and the published rounded amounts.

Eligibility also matters. Employment insurance applies where the worker is covered. From 2026, qualifying foreign professionals with permanent residency have employment-insurance coverage. A standard foreign work permit alone does not establish eligibility. Foreign professionals doing professional work are included in the new labour-pension system from 1 January 2026 without needing permanent residency.

What is and is not included

• Included in the employer cost: labour insurance, employment insurance, the employer NHI share and the pension contribution.
• Charged separately: occupational-accident insurance, which is distinct from ordinary labour insurance, and the wage fund contribution.
• Not included: overtime, bonuses, benefits, expenses and any supplementary NHI premium.

An international summary dated 1 January 2024 lists a 14.59% employer rate and a 2.4% employee rate. It uses a different breakdown from the scheme-level rates above, so do not add the two together. Confirm current rates against the official tables before quoting.

Worked cost example

This illustration assumes a NT$36,300 gross monthly salary, full-month coverage and a NT$36,300 base for each relevant scheme.

Over 12 identical months, that is NT$520,932.

Annual leave

Statutory annual leave depends on service with the same employer. It is three days after six months, seven after one year, ten after two years, 14 after three and four years, and 15 after five through nine years. At ten years it becomes 16 days, then rises by one day per additional year to a maximum of 30. Better contractual terms can apply.

Employees generally arrange their own leave dates, with changes negotiated for urgent business or personal needs. Unused statutory leave is paid at year-end unless both sides agree to defer it to the following year. Any remaining deferred balance is paid at the end of that year or when employment ends. Record entitlement, use and payment.

Public holidays

Workers covered by the Labor Standards Act have 16 general statutory holiday days. Eligible Indigenous workers have three additional days for qualifying traditional festivals. Those are not extra days for every employee. If a public holiday falls on a regular day off or rest day, arrange a substitute day by agreement. Voting-day entitlements follow different rules.

If an employee agrees to work on a statutory holiday, the normal day's wage remains payable and an additional day's wage is due for work within normal daily hours. Further overtime has its own calculation.

Sick leave

Non-hospitalised ordinary sick leave is limited to 30 days per year. Ordinary sick leave within that limit is generally paid at half wages, and the employer makes up the difference if the relevant insurance benefit is lower. Hospitalised leave, and combined hospitalised and non-hospitalised leave, are limited to one year over two years. Qualifying cancer treatment and medically required pregnancy rest follow the hospitalised-leave rules.

From 1 January 2026, an employer must not disadvantage an employee for taking up to ten days of ordinary sick leave in a year. An attendance bonus affected by ordinary sick leave must be reduced proportionately, subject to the separately protected leave categories.

Maternity, paternity and parental leave

Insurance maternity benefits are a separate calculation. They do not replace checking the employer's wage duty. The seven partner days are one combined entitlement, not seven prenatal days plus another seven for the birth.

For parental leave, eligible employment-insurance participants can receive a benefit and subsidy totalling 80% of average insured salary for up to six months per parent per child. Check insurance eligibility separately from the right to leave. From 1 January 2026, up to 30 days of parental leave per child can be taken in individual days before the child turns three. These days count within the two-year entitlement and are not additional. The usual application deadline is five days before the leave.

Other paid and unpaid leave

• Marriage leave is eight paid days.
• Paid bereavement leave is eight, six or three days depending on the family relationship.
• Menstrual leave is one day per month at half pay. The first three days in a year do not count towards ordinary sick leave.
• Family-care leave is up to seven unpaid days a year and counts within the 14-day personal-leave allowance.

Confirm the leave category with the employee before processing pay, because the category decides who pays and how the absence is treated for attendance bonuses.

Most compliance risk in Taiwan payroll sits in a few places: how the employment relationship is classified, the written terms, working-time records, wage payment and the rules for ending employment. Taiwan employment is not generally at will, so plan exits before they happen.

Contracts and written terms

Ordinary employment is not subject to a universal written-contract formality, but some specific clauses have writing requirements. Use a written agreement anyway. It should cover the employer, role, work location, pay and payment dates, hours, rest, leave, insurance, pension, expenses, confidentiality and employment exits. Check the enforcement rules for the required contract topics and give the employee terms they understand.

Ongoing work normally needs an indefinite contract. Fixed terms are available for temporary, short-term, seasonal or specific work. Temporary and short-term work generally cannot exceed six months, seasonal work cannot exceed nine months, and specific work exceeding one year requires approval. Taiwan has no general statutory probation period. You can agree a reasonable assessment period, but labour-law protections still apply and ending employment needs a lawful basis.

If a person works under your direction as part of your team, calling the agreement a consultancy contract does not settle their status. Review control, independence and business risk before choosing a contractor arrangement. If you use an employer of record, ask the provider to identify the actual employer, because supplying an employee to work under a client's direction can fall under labour-dispatch rules. A dispatched worker's contract must be indefinite.

Work rules, payment and records

An employer with at least 30 workers must draw up work rules, submit them for approval and make them available to workers. The statutory default is payment at least twice a month, unless the parties agree otherwise, so a monthly cycle can be agreed. Pay gross wages in New Taiwan dollars, explain lawful deductions and provide the calculation details. Keep wage records for five years. Keep attendance records to the minute and retain them for five years. Remote work still needs a workable process for recording hours.

The normal limit is eight working hours a day and 40 a week. Withholding depends on tax residence, which payroll should establish from the actual facts and stay period. Foreign professionals generally need the correct employer-sponsored work permit unless an exemption applies, and the permission must match the real job and employer arrangement.

Notice and termination

Article 11 lists the grounds for termination with notice, such as closure, business losses or contraction, qualifying operational changes and inability to perform the work. Article 12 permits termination without notice for specified serious circumstances, with a 30-day action deadline for listed grounds. A client asking to remove someone is not automatically a lawful ground.

Pay in lieu applies where required notice is not given. Employees ending an indefinite contract give the same service-based notice. During qualifying notice, employees can take up to two paid working days per week to seek another job. The law also restricts termination during statutory maternity leave and medical treatment for an occupational accident, so check leave, discrimination and retaliation protections before any dismissal.

On termination, settle wages immediately, including unpaid salary, overtime and payable unused annual leave. Statutory severance has its own 30-day deadline. Provide a service certificate if requested. For a layoff, submit the specified worker information to the local authority and public employment service at least ten days before departure. Larger reductions can trigger the Mass Redundancy Act, which generally requires a written plan and public announcement at least 60 days before implementation. Test the exact thresholds before scheduling departures.