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Taiwanese Currency

New Taiwan Dollar (TWD)

The Capital of Taiwan

Taipei

Time Zone in Taiwan

GMT+8

Important Facts About the Country of Taiwan

Introduction to Taiwan

Taiwan’s political and legal status remains a subject of contention. The People’s Republic of China (PRC) asserts that the Republic of China (ROC) government is illegitimate, labeling it as the “Taiwan Authority.” Despite this, the ROC considers itself a sovereign state, maintaining its own constitution, independently-elected president, and armed forces. The global perspective on the ROC’s status is disputed, with questions about whether it exists as a recognized state or as a defunct state under international law. This ambiguity is influenced by its exclusion from the United Nations and limited diplomatic recognition worldwide.

What to Know about Taiwan’s Geography

Taiwan comprises numerous islands, encompassing a total area of 36,193 square kilometers. Among these are smaller islands such as the Penghu archipelago in the Taiwan Straits, along with the Kinmen, Matsu, and Wuqiu islands situated near the Chinese coast. Additionally, Taiwan encompasses certain islands in the South China Sea.

Climate in Taiwan

Taiwan experiences a predominantly subtropical climate, with the southern regions characterized by a tropical climate. Winters are brief and mild, while summers are extended and hot. Typhoon season typically occurs from July to September, and the months of May and June are marked by higher rainfall.

The Culture of Taiwan

Taiwan’s cultural identity is rooted in tradition, shaped by historical influences such as Chinese imperialism and colonization. The cultural landscape is predominantly patriarchal, with a strong emphasis on family as the focal point of cultural activities. Business culture in Taiwan reflects a blend of mainland Chinese and Japanese customs, deeply influenced by Confucianism, resulting in hierarchical structures within many Taiwanese companies.

The island is also home to diverse aboriginal cultures, constituting 2% of the population. There are 12 distinct aboriginal tribes—Amis, Atayal, Bunun, Paiwan, Puyuma, Rukai, Thao, Saisiyat, Tsou, Kavalan, Truku, and Yami—each contributing to the rich tapestry of Taiwan’s cultural heritage.

Religions Observed in Taiwan

Taiwan boasts a diverse religious landscape, embodying the constitutional freedom of belief. The array of religious practices includes Buddhism, Taoism, Christianity, Mormonism, Yiguandao, the Unification Church, Catholicism, Islam, Eastern Orthodoxy, Judaism, Hinduism, native sects like Yiguandao, and various other belief systems. This pluralistic approach underscores the island’s commitment to religious freedom and coexistence.

Languages Spoken in Taiwan

Mandarin serves as the official national language and is widely spoken by the majority of Taiwan’s population. Since the conclusion of Japanese rule, it has been the predominant language of instruction in schools. In line with practices in Hong Kong and Macau, traditional Chinese is utilized as the writing system in Taiwan.

Taiwanese Human Resources at a Glance

Employment Law Protections in Taiwan

The framework for employment in Taiwan is defined by the Labor Standards Act (LSA), setting forth the fundamental terms and conditions. For certain occupations and industries not encompassed by the LSA, the Civil Code addresses terms and conditions within individual contracts. The LSA comprehensively addresses aspects like labor contracts, wages, work hours, leave, compensation, retirement, and statutory benefits. It is noteworthy that the recruitment of foreign nationals is regulated by the Employment Services Act (ESA).

Employment Contracts in Taiwan

While written contracts are not obligatory, they are widely utilized and strongly advised in Taiwan. These contracts must adhere to the stipulations outlined in the Labor Standards Act (LSA). Employment agreements can be established in Chinese, English, or any other language through mutual consent. However, in the event of future disputes, a Chinese translation will be necessary.

Taiwan's Contract Terms

The Labor Standards Act (LSA) recommends incorporating up to 13 elements in written contracts to delineate the rights and responsibilities of both employers and employees, mitigating the risk of disputes. Employers are obligated to meet or surpass the minimum standards set by the LSA and other pertinent laws. Any alterations to working conditions necessitate employer agreement obtained through a Labor Management Conference or Labor Union.

Health and Safety

As per Article 20 of the Occupational Safety and Health Act, employers are obligated to request a pre-employment physical examination from new employees before the commencement of their duties. For existing employees, specific health examinations, including general health examinations and specialized assessments for tasks involving health hazards, must be conducted. Additionally, health examinations for specific items targeted at designated worker groups, as defined by the central competent authority, are required.

Employees under the age of 40 are subject to health checks every 5 years, those between 40 and 65 undergo checks every 3 years, and individuals aged over 65 must undergo an annual examination. The associated costs for these health examinations are the responsibility of the employer.

Furthermore, the Occupational Safety and Health Act mandates that employers with 50 or more employees engage or contract medical staff to undertake health management activities, occupational disease prevention, health promotion, and other initiatives to safeguard the health of employees.

Work Rules

Any employer who has more than 30 employees is required to have written work rules. These work rules must be registered with the local labor authority.

Taiwanese Timesheets / Attendance Records
Employers must prepare and retain worker attendance records for five years. The attendance records must register the attendance of workers on a daily basis to the minute. Employers may not refuse when workers request duplicates or photocopies of the attendance records.

Taiwan's Guidelines Regarding Probation Period
The probation period is generally three months in Taiwan. Per Article 16-1 of LSA, companies are not required to give advance notice.

Taiwanese Laws Regarding Overtime

The daily working hours are capped at 12 hours, and monthly overtime should not exceed 46 hours. Compensation for overtime is structured as follows: for the eighth through 10th hours (daily), the rate is 134%, and for the 10th through 12th hours (daily), it is 167%. In the case of overtime on a “flex-day,” the compensation stands at 134% for the first two hours, 167% for the second through eighth hours, and 267% for the eighth through 12th hours.

Casual leave can be taken for a minimum of a half day and up to three days. If leave extends beyond three days, it should be considered as annual leave, and advance permission is necessary for taking three consecutive days of leave.

According to The Shops and Establishment Act, employees are entitled to eight days of casual leave annually. However, casual leave cannot be carried forward, and any unused days will automatically lapse at the end of the year without the option for encashment.

Casual leave cannot be combined with annual leave or sick leave.

Rules Regarding Bonus and 13th Month Pay in Taiwan

Additional salary payments, commonly referred to as the 13th or even 14th month of salary, are frequently offered to employees in Taiwan, though it is not obligatory. Typically, these extra payments are made before the Chinese New Year Holiday, with festival bonuses possibly distributed ahead of the Dragon Boat Festival and the Mid-Autumn Festival.

Casual leave can be taken for a minimum of a half day and up to three days. If leave extends beyond three days, it should be considered as annual leave, and advance permission is necessary for taking three consecutive days of leave.

According to The Shops and Establishment Act, employees are entitled to eight days of casual leave annually. However, casual leave cannot be carried forward, and any unused days will automatically lapse at the end of the year without the option for encashment.

Casual leave cannot be combined with annual leave or sick leave.

Termination

Terminating an employee in Taiwan must adhere to the specific causes delineated in Article 11 and 12 of the LSA. In case of termination for the specified reasons under Article 11, the employer is obligated to give advance notice (or offer a payment in lieu), provide severance pay, and settle any outstanding payments or benefits.

Taiwan's Requirements Regarding Notice Periods

Employers: When notice and severance pay must be given, advance notice is provided based on length of service:

  • 10 days’ notice for employment exceeding three months but less than one year,
  • 20 days’ notice for employment exceeding one year but less than three years,
  • 30 days’ notice for employment of three years or more.

Employees with fixed-term contracts exceeding three years may be terminated after completing three years of service, provided the employer provides 30 days’ notice. Employers with fixed-term contracts of less than three years cannot terminate without meeting specific requirements or obtaining the employee’s agreement. In the case of indefinite-term contracts, both the employer and employee must provide the same amount of notice.

Redundancy/Severance Pay in Taiwan

In instances of redundancy, severance pay is mandated, determined by one month’s average wages for each year of service. The compensation for each year of service is set at 50% of the employee’s average monthly wage, capped at a maximum of six months’ pay.

Regarding severance payment in lieu of notice periods, the total compensation must correspond to the total days in the stipulated notice period multiplied by the employee’s daily wage.

Other Standard Items

Meal allowances, capped at a maximum of TWD 2,400 per month, are eligible for exemption from individual income tax.

Additionally, group insurance expenses, up to TWD 2,000 per employee, qualify as fully deductible operating expenses and are not subject to income tax for the employee.

Statutory Costs

About 18.4% of the base salary is allocated to cover National Health Insurance (NHI), labor insurance, employment insurance, and labor pension.

Tax and Social Security Information for Employers in Taiwan

Personal Income Tax in Taiwan

Resident taxpayers are subject to taxation solely on income sourced in Taiwan. This encompasses various forms of income such as business earnings, salaries (including allowances, bonuses, and additional compensation), severance pay, professional fees, commissions, as well as dividends and interest generated from assets within Taiwan.

Tax rates for 2022 Personal Income Tax returns:

Taxable Income Over (TWD) Taxable Income Not Over (TWD) Tax Rate (%)
0 560,000 5.0
560,001 1,260,000 12.0
1,260,001 2,520,000 20.0
2,520,001 4,720,000 30.0
4,720,001 and above 40.0

A resident individual must file an income tax return between May 1st and May 31st of the following year and pay any tax due.

Income tax: Employer Requirements

National Health Insurance (NHI): The national health insurance contribution, amounting to 5.17%, is distributed among the employee (30%), the government (10%), and the employer (60%). The calculation is based on the Salary Base multiplied by the Insurance Premium Rate multiplied by the Contribution Ratio and adjusted for the number of dependents (1 + number of dependents). As of January 1, 2024, the number of dependents is 0.56, and the minimum monthly earnings amount is TWD 27,470.

Labor Insurance: Employers with more than five employees are required to contribute to labor insurance, covering ordinary risk insurance and occupational accident insurance. The insurance contribution of 11% is shared by employers (70%), employees (20%), and the government (10%). The maximum monthly insurance salary is TWD 45,800.

Employment Insurance: Employers contribute 1.0% to employment insurance, with the distribution among employers (70%), employees (20%), and the government (10%). The maximum monthly insurance salary is TWD 45,800. Employers with fewer than five employees contribute 1% per employee (Percentages: employee 0.2%, employer 0.7%).

Labor Pension: Employers contribute at least 6% of employees’ monthly earnings to the labor pension, with employees having the option to voluntarily contribute up to 6% of their wages. Contributions are deposited into specific individual pension accounts, subject to a monthly earnings ceiling of TWD 150,000.

Wages Compensation Fund: Employers contribute 0.025% of the total insured wages to the wages compensation fund every month, as mandated by Article 28 of the Labor Standards Law.

Supplementary NHI Premium: Employers contribute to the supplementary NHI premium for additional income earned, such as bonuses and commissions. The contribution is calculated based on the formula: (Employee’s monthly taxable amount, minus NHI Insured Amount) x 2.11%.

Disabled Employment Fund: Employers with more than 67 employees who do not employ anyone with a disability are required to make a monthly contribution to the Disabled Employment Fund.

Social Security System
 Monthly Salary Cap (TWD) Employer Contribution (%) Employee Contribution Rate (%) Government Contribution (%)
National Health Insurance (NHI) 219,500 4.84 (effective Jan 01, 2024) 1.55 0.81
Labor Insurance 45,800 7.70 2.20 1.10
Employment Insurance 45,800 0.70 0.20 0.10
Labor Pension 150,000 6.00 (minimum) Voluntary 0.00 – 6.00 (maximum) 0.00
Workers’ Compensation 72,800 0.12 0.00 0.00
Arrear Wage Payment Fund 45,800 0.025 0.00 0.00
Supplementary NHI Premium (on bonuses, commission) 45,800 2.11 – –
Disabled Contribution Fund   TWD 600    
The above rates serve as a broad guideline. Actual rates charged by GoGlobal will differ.

Important Information for Taiwanese Employees

Salary Payment

Salary disbursements are typically conducted on a monthly basis. The usual practice involves payments made between the 25th and 31st day of the month or by the fifth day of the subsequent month.

Payslip

Monthly payslips should be accessible online, either in PDF format or through hard copy distribution.

Working Hours

In Taiwan, an employee is limited to eight hours of work per day (excluding overtime) and a maximum of 40 hours per week. They are entitled to a minimum of two rest days within a seven-day period, comprising one mandatory day off and one flexible rest day. The employee is not permitted to work on the mandatory rest day. However, with mutual agreement, they may work on the flexible rest day, subject to increased overtime rates.

Holiday Allowance

In Taiwan, there are 10 to 15 public holidays annually. Typically, full-time employees receive compensation for public holidays.

These holidays include both fixed dates and those based on the lunar calendar. Employers and employees have the flexibility to mutually agree on adjustments to these holidays, potentially converting them into regular working days.

Annual Leave

For employees who have commenced their employment: 

  • After six months but within one year of service: three days of leave.
  • After one year but within two years of service: seven days of leave.
  • After two years but within three years of service: 10 days of leave.
  • After three years but within five years of service: 14 days of leave.
  • After five years but within 10 years of service: 15 days of leave.
  • After 10 years of service: an additional day of leave each year (up to a maximum of 30 days).

Please refer to Article 38 of the LSA for detailed information.

Employees become entitled to annual leave after completing at least six months of service, as stipulated by the LSA. The company has the option to provide a more favorable plan than required by the LSA.

The employer and the employee can mutually agree to carry over any unused annual leave to the next year. However, if there is any remaining annual leave at the end of the second year or upon completion of the employment contract, it must be converted into wages and paid to the employee. In cases where there is no agreement to carry over unused annual leave to the following year, or if the employment contract is terminated, the employer is obligated to compensate the employee with one day’s regular wages for each day of unused annual leave.

Employers are required to inform their employees annually about their entitlement to annual leave and the total amount to be paid for any unused annual leave. This information should be documented in each employee’s salary record. The notification should be provided before the usual period of wage payment each year and can be communicated in writing or electronically, allowing employees easy access and the ability to print out the information.

Sick Leave

If an employee requires medical treatment or rest due to ordinary injury, sickness, or physical reasons, they are eligible for ordinary sickness leave based on the following provisions:

  • For non-hospitalized cases, the cumulative sick leave should not exceed thirty days in a year.
  • In the case of hospitalized individuals, the sick leave period should not exceed one year.
  • The combined total of hospitalized and non-hospitalized sick leave should not surpass one year.
  • If an employee is diagnosed with conditions such as cancer (including carcinoma in situ) or pregnancy with a threatened abortion, the outpatient treatment period is considered part of the hospitalized sick leave.

During sick leave, employees are entitled to receive 50% of their regular pay from the employer. If the insured person has a minimum of one full year of insurance coverage before the onset of injury or sickness, these benefits can be extended for an additional six months. Should the cash sickness benefit provided by labor insurance fall below 50%, the employer is obligated to make up the difference. Typically, the combined duration of sick leave cannot exceed one year within a two-year period. Employers have the discretion to grant additional leave beyond the one-year period or may choose to terminate the employment relationship. In cases where employees have utilized their paid sick leave and annual leave allowances, they can request additional unpaid leave with the employer’s approval. Employers may grant a leave of absence without pay for a maximum period of one year.

Maternity & Parental Leave
  • Maternity leave for female employees encompasses a total of eight weeks, both before and after childbirth.
  • If the employee has served for more than six months,
  • full pay is granted during maternity leave. For those with less than six months of service, entitlement extends to half-pay.
  • Additionally, male employees are entitled to five days of paid paternity leave following the birth of their child.
Pregnancy Checkup Leave

Throughout an employee’s pregnancy, their employer is required to provide a seven-day leave allowance for pregnancy checkups.

Other Leaves

Parental Leave: Employees having children below three years of age can avail up to two years of unpaid leave for childcare. The leave period must be at least six months. Those under labor insurance with more than a year of coverage qualify for parental allowance.

Family Leave: Employers with over five employees are obligated to provide seven days of unpaid leave annually to employees for the personal care of family members.

Personal Leave: Employees are entitled to additional paid leave, including eight days for marriage, three to eight days based on the relationship in case of a relative’s death, and a maximum of 14 days of unpaid leave annually for personal matters. Additionally, employees must be granted leave for military duty when called upon.

Benefits to the Employee in Taiwan

Overtime Rates

The total daily working hours, inclusive of regular and overtime hours, are restricted to 12 hours. Overtime is limited to 46 hours monthly, with recent amendments allowing employers to calculate overtime over a consecutive three-month period, not exceeding 54 hours in one month or 138 hours in three months according to Taiwan’s revised Labor Standards Act.

Calculation for overtime pay on workdays is as follows:

  • For hours worked between eight and up to 10 hours, the overtime pay is 1.34 times the regular hourly wage.
  • For hours exceeding 10 hours and up to 12 hours, the overtime pay is 1.67 times the regular hourly wage.

The new overtime payment calculations for overtime work completed by employees on flexible rest days are as follows:

  • For hours worked between zero and up to two hours, the overtime pay is 1.34 times the regular hourly wage.
  • For hours exceeding two hours and up to eight hours, the overtime pay is 1.67 times the regular hourly wage.
  • For hours exceeding eight hours and up to 12 hours, the overtime pay is 2.67 times the regular hourly wage.

Benefits and Pensions

The Labor Pension Act (LPA) in Taiwan mandates that employers contribute a minimum of 6% of an employee’s pay to their LPA sub-account on a monthly basis. Employees have the option to make voluntary contributions, capped at 6% of their pay, for tax-deductible purposes. The LPA specifies the standard retirement age as 60 years. For participants with at least 15 years of LPA contributions, benefits can be received in the form of an annuity. In the case of survivors or retirement benefits with less than 15 years of LPA participation, a lump-sum payment will be provided.

Other Benefits

Other common employee benefits arranged by employers include:

  • End-of-service benefits (ESB)
  • Life, accident, and travel insurance
  • Residential allowances
  • Holiday bonuses

Employees may receive meal allowances, capped at a maximum of TWD 2,400 per month, which are exempt from individual income tax.

Medical benefits typically extend to the spouses and dependent children of employees.

As a general guideline to cover the comprehensive cost of an employee, it is advisable to allocate approximately 20% for benefit costs in addition to the gross salary.

Rules Regarding Visas and Foreign Workers in Taiwan

General Information

Foreign employees planning to work in Taiwan must secure a valid work permit before commencing employment. Following approval of the work permit, they can proceed to apply for a residence permit. For individuals with a valid job offer in Taiwan but no visa, securing a residence visa is necessary before entry. Those registered under the standard extension visa can seek conversion to a residence visa through the National Immigration Bureau Visas (NIA). Upon obtaining a residence permit, foreign employees are required to apply for an Alien Resident Certificate (ARC) within 15 days of arriving in Taiwan.

The step-by-step procedure is as follows:

Work Permit Application:** Employers initiate the process by submitting a work permit application to the Council of Labor Affairs. The permit, generally valid for six months (extendable up to three years), is categorized based on job roles such as specialized or technical workers and managerial employees. Managerial positions have stricter revenue requirements, and different job types necessitate distinct documentation.

Visa Application:** After Ministry of Labor approval, the foreign worker applies for a work visa at an Overseas Office of the Republic of China (Taiwan). This visa permits residence for the duration of employment.

Resident Certificate:** Upon receiving the work permit and obtaining visa clearance, the employee can travel to Taiwan. Within 15 days of arrival, an Alien Resident Certificate (ARC) must be obtained. The ARC serves as proof for day-to-day activities without requiring a passport within Taiwan and allows multiple re-entries, essential at immigration checkpoints.

Medical Examination:** First-time travelers to Taiwan must undergo a medical examination within three days of arrival. This is typically conducted at a local Center for Disease Control.

Employee Insurance Application:** Once equipped with the work permit, visa, and ARC, the employee is ready to commence work. However, the employer must complete additional measures and registration within three days of receiving the ARC to avoid penalties. This includes an entrance report at the local department of the city government and enrollment in the National Health Insurance coverage within three days of ARC issuance, facilitated through Taiwan’s Bureau of National Health Insurance.

Public Holidays Recognized by Taiwan in 2024

  Occasion Date
1 New Year’s Day January 1
2 Lunar New Year February 8 – 14
3 Peace Memorial Day February 28
4 Tomb Sweeping Festival April 4 – 7
5 Labour Day May 1
6 Dragon Boat Festival June 8 – 10
7 Mid-Autumn Festival September 17
8 National Day October 10

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