How to hire and pay employees in Taiwan
With Instahirin, your business can easily hire employees in Taiwan. No more worrying about local laws, complex tax systems, or managing international payroll.
Before hiring
EMPLOYEES IN The Taiwan
Before hiring employees in Taiwan, one key thing employers should be aware of is the Personal Data Protection Act (PDPA). This law regulates how employee personal data is collected, stored, and shared—especially with overseas entities. Employers must gain consent, specify the purpose of data use, and ensure secure handling of all personal information to remain compliant.
Another important factor is understanding Taiwan’s labor laws and statutory benefits. Employers must contribute to labor insurance, health insurance, and the labor pension scheme. Employees are entitled to paid annual leave (based on tenure), national holidays, sick leave, and parental leave. Employment contracts must comply with the Labor Standards Act, which also governs working hours, overtime pay, termination conditions, and severance. Note that foreign employers must also comply with local regulations when hiring Taiwanese nationals remotely.
At a glance
CURRENCY
New Taiwan Dollar
OFFICIAL LANGUAGE
Mandarin Chinese
PAYROLL FREQUENCY
Monthly
EMPLOYER TAXES
20.1%
of gross salary
13th / 14th SALARY
N/A
Good to know
Taiwan offers universal healthcare through the National Health Insurance (NHI) system, funded by contributions from employers, employees, and the government. Coverage includes doctor visits, hospital care, and prescriptions with low co-payments. Employers are required to enroll employees and typically cover around 60% of the premium.
The standard workweek is 40 hours, typically 8 hours per day over 5 days. Overtime is permitted within legal limits and must be compensated at 134% to 200% of the regular wage, depending on timing. Employees are entitled to a minimum of 7 days of paid annual leave (increasing with tenure) and national public holidays.
Labor laws in Taiwan
Working hours and overtime
In Taiwan, the standard working hours are generally 8 hours per day and 40 hours per week. Overtime work is allowed but must not exceed 46 hours per month, according to labor regulations. Employers must pay overtime wages at higher rates, typically 1.33 times the regular hourly wage for weekdays and 1.66 times for holidays. These rules ensure workers are fairly compensated for extra hours beyond the normal schedule.
Employment contracts
In Taiwan, an employment contract must clearly outline job duties, working hours, wages, and benefits. It is usually required to be in writing to protect both employer and employee rights. The contract should specify the duration of employment and conditions for termination. This helps ensure fair treatment and legal compliance under Taiwan’s Labor Standards Act.
Probationary period
The minimum probation period is 6 months, there is no maximum by law but companies usually set up a maximum probation period.
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Benefits and leave in Taiwan
Annual leave in Taiwan
In Taiwan, employees are entitled to paid annual leave based on their years of service, starting from 7 days after one year. The leave increases incrementally with longer tenure, up to a maximum of 30 days. Annual leave must be used within two years, or it may be forfeited.
Sick leave
Employees are entitled to paid sick leave for up to 30 days. They are also entitled to up to 1 year of hospitalization leave over two years. Sick leave is paid at 50% of the employee's salary by the employer.
Parental leave
Employees are entitled to 2 years of parental leave. Both parents can decide how to distribute the time off. Either parent can take parental leave. Parental leave is unpaid.
Holidays
Taiwan observes several public holidays, including Lunar New Year, National Day, and Tomb Sweeping Day. These holidays are typically paid days off for employees.
Employer tax
In Taiwan, employers typically contribute around 6% to 10% of an employee’s gross salary to mandatory social security programs, including labor insurance, national health insurance, and pension funds, with exact rates depending on the specific insurance type and employee salary level.
Individual tax
In Taiwan, individuals pay progressive income tax rates ranging from 5% to 40% based on annual income, along with mandatory contributions to labor insurance and national health insurance, totaling approximately 10% to 12% deducted from salaries depending on income and employment type.
Termination in The Taiwan
Employee dismissal must be according to the Labor and Standards Act (LSA). Both employer and employee are required to provide notice or payment in lieu. Any non taken holidays, payments, or benefits must be paid upon termination.
Notice period
The minimum notice period is 0 days and will be increased according to the length of the employment.
- Continuous employment for less than 3 months - No notice
- Continuous employment for at least 3 months but less than 1 year - 10 days
- Continuous employment for at least 1 year but less than 3 years - 20 days
- Continuous employment for at least 3 years - 30 days
Start hiring employees in
Taiwan
Setting up a business entity in every country where you want to hire isn’t scalable it’s time-consuming, costly, and legally complex. In Taiwan, navigating labor laws, income tax regulations, social insurance contributions, and mandatory employee benefits can be challenging. Managing contracts, payroll, and compliance manually through spreadsheets and emails often leads to inefficiencies and risks.
With InstaHirin, you can easily manage HR, payroll, and automate compliance in Taiwan and 180+ countries all from one user-friendly platform so you can hire quickly and confidently without setting up a local entity.
Disclaimer: The information provided in this resource is for general educational purposes only and shall not be construed as legal advice. While InstaHirin yster strives to provide current and accurate information, InstaHirin makes no warranties or representations as to the correctness of the content provided and accepts no liability or responsibility for any errors or omissions in the content provided. By using this resource you acknowledge and agree that you do so at your own risk. The content of this resource is subject to change without notice.
