Employer of Record in Taiwan

Employment Laws and Regulations in Taiwan

Employment Contracts

Employment relationships in Taiwan are governed primarily by the Labor Standards Act, enacted in 1984 and amended multiple times through 2025, and administered by the Ministry of Labor. The LSA applies to all private-sector employment and is supplemented by the Gender Equality in Employment Act, the Labor Pension Act, the Labor Insurance Act, and the Employment Service Act. Employment contracts may be either indefinite (the default) or fixed-term, and fixed-term contracts are restricted under Article 9 of the LSA to temporary, short-term, seasonal, or specific work of defined duration. Written contracts are standard practice and required for foreign-national hires to support work permit applications; they should state job title, wages, working hours, workplace, probation period, leave, and grounds for termination. Contracts in Taiwan are commonly executed in Traditional Chinese, although bilingual Chinese and English contracts are accepted and widely used for foreign national employees.

Working Hours and Overtime

The standard working week in Taiwan is 40 hours, spread over five days of 8 hours each, set by Articles 30 and 36 of the Labor Standards Act. Daily working time cannot exceed 8 hours except with overtime authorisation, and employees are entitled to at least one regular rest day and one flexible rest day per seven-day period. Overtime is work performed beyond the 8-hour daily or 40-hour weekly standard; total working time including overtime may not exceed 12 hours in a single day, and monthly overtime is capped at 46 hours, extendable to 54 hours per month (with a 138-hour three-month cap) where a formal labour-management agreement has been concluded under Article 32. Overtime rates are calculated on the regular hourly wage and follow a tiered schedule set by Article 24 of the LSA.

Employees covered by Article 84-1 of the Labor Standards Act, including certain managerial staff, security personnel, and responsibility-system workers, may contract out of the standard working-hour rules with Ministry of Labor approval, and remain entitled to baseline rest, health, and leave protections. Overtime cannot be imposed unilaterally: employers must obtain employee consent, and refusal cannot be grounds for termination or penalty. Overtime pay is included in the basis for Labor Insurance, NHI, and Labor Pension contributions and is subject to income tax withholding on the next payroll cycle.

Minimum Wage

The statutory monthly minimum wage in Taiwan is NT$29,500 effective 1 January 2026, confirmed by the Ministry of Labor under the annual Minimum Wage Act review. This is a 3.18% increase on the 2025 rate of NT$28,590, and the tenth consecutive annual rise, lifting the monthly minimum 47.4% above its 2016 level. The hourly minimum wage for part-time workers and hourly-paid employees rises to NT$196 on the same date. The minimum applies nationally across all industries and is not regionally differentiated. Foreign nationals in domestic work (caregivers and household workers) and apprentices in certain formal training programmes may be covered by separate wage schedules; EOR employees on standard work permits are paid at or above the full statutory minimum. For the regional salary context, see our Taiwan minimum wage guide. Violations carry fines of NT$20,000 to NT$1,500,000 under Article 79 of the LSA.

Probation Period

The Labor Standards Act does not define a statutory probation period, and the Ministry of Labor has repeatedly confirmed that no separate legal category of “probation” exists in Taiwan employment law. Employers customarily include a probation clause of up to three months in employment contracts to assess fit, but during that period the employee enjoys the same statutory protections as any other worker, including Labor Insurance and NHI coverage, Labor Pension contributions, and the full statutory notice periods under Article 16 if the employer terminates. Termination during probation must still be based on grounds recognised under Articles 11, 12, or 14 of the LSA; an employer cannot dismiss “at will” simply because the employee is on probation. Annual leave, however, only begins to accrue once the employee has completed six months of service, regardless of the probation clause.

Leave Entitlements

Taiwan’s statutory leave framework is spread across the Labor Standards Act (Articles 37 to 43 and the Regulations of Leave-Taking by Workers), the Gender Equality in Employment Act (maternity, paternity, family care, menstrual leave), and the Labor Insurance Act (leave benefits funded by Labor Insurance). Leave entitlements are mandatory for all employees covered by the LSA, with tenure-based scaling for annual leave and distinctive protections for women and parents.

Annual Leave

Under Article 38 of the Labor Standards Act, annual leave (known as “special leave”) is awarded on a tenure-based scale: 3 days after six months of service, 7 days after one year, 10 days after two years, 14 days after three years, 15 days after five years, and 16 days after ten years, increasing by one day per additional year of service up to a statutory maximum of 30 days. Annual leave accrues from the employee’s anniversary date and must be scheduled by agreement between employer and employee. Unused annual leave at the end of the leave year must either be carried over for one more year by agreement or paid out in cash, and any unused balance at termination is paid in cash at the final rate of wages.

Sick Leave

Under the Regulations of Leave-Taking by Workers, non-hospitalised sick leave is 30 days per year at 50% of regular pay, funded by the employer. Hospitalised sick leave may run up to one year within any two-year window, with Labor Insurance paying a sickness benefit (typically 50% of the insured salary for up to six months, extendable) and the employer topping up any shortfall to 50% of regular wages. A medical certificate is required for any sick leave exceeding three consecutive days.

Maternity Leave

Under Article 50 of the Labor Standards Act and Article 15 of the Gender Equality in Employment Act, pregnant employees are entitled to 8 weeks (56 days) of maternity leave, taken before and after delivery. Employees with at least six months of service receive full pay during the leave, funded by the employer; employees with less than six months of service receive half pay. Additional four weeks apply for each additional child in a multiple birth. Miscarriage leave is also provided on a graduated scale based on pregnancy duration. Prenatal checkup leave of 7 paid days is available throughout pregnancy under Article 15 of the Gender Equality in Employment Act, and female employees are protected from dismissal during pregnancy and for six months after giving birth.

Paternity Leave

Under Article 15 of the Gender Equality in Employment Act, male employees are entitled to 7 days of paid paternity and pregnancy-checkup accompaniment leave, taken around the date of the spouse’s delivery and prenatal medical appointments. Leave is paid by the employer at the employee’s full rate of wages. A 2026 update allows single-day parental leave increments (previously taken only in whole-month blocks), and small employers of fewer than 30 employees may claim a government subsidy of NT$1,000 per day to offset the cost under the Gender Equality in Employment Act amendments, effective 2026.

Other Statutory Leave

Beyond the core leave categories, Taiwan guarantees several further entitlements under the Regulations of Leave-Taking by Workers and the Gender Equality in Employment Act:

• Menstrual leave: 3 days per year under Article 14 of the Gender Equality in Employment Act, one day paid at full rate and two days paid at 50% (not counted as sick leave).
• Marriage leave: 8 paid days to be taken around the date of marriage.
• Bereavement leave: 8 days for the death of a spouse, parent, or adoptive parent; 6 days for a spouse’s parent, stepparent, child, or grandparent; 3 days for a grandparent’s sibling or spouse’s sibling.
• Family care leave: 7 days per year (aggregated with personal leave) to care for a family member in urgent need, unpaid under the Gender Equality in Employment Act.
• Personal leave: up to 14 days per year, unpaid.
• Tribal ceremony leave: paid leave for indigenous employees to observe statutory tribal ceremonies under Ministry of Labor guidance.

The following table summarises every statutory leave entitlement under Taiwan’s Labor Standards Act and the Gender Equality in Employment Act, including pay rate and funding source. The single most important takeaway is that annual leave accrues from the six-month service mark regardless of any probation clause, and that menstrual leave is statutorily separate from sick leave and cannot be deducted from the 30-day sick leave budget.

Statutory Employee Benefits

Taiwanese law requires employers to provide a set of statutory benefits that go beyond paid leave. These obligations are separate from any private benefits the employer may choose to offer and are enforced by the Ministry of Labor, the Bureau of Labor Insurance, and the NHI Administration. For details on the full benefits stack, see our employee benefits in Taiwan guide.

• National Health Insurance (NHI): mandatory single-payer medical coverage financed by a 5.17% premium on insured salary, shared 60% employer / 30% employee / 10% government, administered by the NHI Administration.
• Labor Insurance: national social insurance covering old-age, disability, death, and maternity benefits, funded by a combined 12.5% contribution (including Employment Insurance), shared 70% employer / 20% employee / 10% government, administered by the Bureau of Labor Insurance.
• Labor Pension (new scheme): mandatory employer contribution of 6% of monthly salary to the employee’s individual retirement account under the Labor Pension Act, portable across employers and payable from age 60.
• Occupational Accident Insurance: fully employer-funded work-injury coverage with industry-rated premiums of 0.11% to 0.93% of insured salary, paying medical, disability, and death benefits on occupational accidents or commuting injuries.
• Employment Insurance: unemployment, vocational training, parental leave allowance, and early-employment support, included within the 12.5% Labor Insurance rate (Employment Insurance component 1.0%).
• Supplementary NHI premium: a 2.11% levy on bonuses exceeding four times monthly insured salary, professional fees, and other specified income streams, applied to both employer and employee.
• Employee welfare committee: mandatory for employers with 50 or more employees, funded by a 0.05% to 0.15% payroll contribution under the Employee Welfare Fund Act, supporting on-the-job welfare activities.

Exact contribution rates for each line item appear in the contribution tables in the payroll section below; the rates above represent the rounded statutory values as of January 2026 and are subject to Ministry of Labor adjustment through the annual review cycle.

Recent Regulatory Updates (2026)

Taiwan’s employment landscape saw several notable changes effective 1 January 2026. The monthly minimum wage rose 3.18% to NT$29,500 and the hourly minimum to NT$196, the tenth consecutive annual increase under the Minimum Wage Act. The personal income tax exemption threshold increased by NT$4,000 to NT$101,000 (NT$151,500 for taxpayers aged 70 or above), and the standard deduction for single filers increased by NT$5,000 to NT$136,000, reducing the tax liability for lower and mid-income earners (Overseas Community Affairs Council).

A substantive reform to parental leave under the Gender Equality in Employment Act took effect in 2026, moving from monthly-block leave to single-day increments for parental leave taken until a child’s third birthday, and introducing a NT$1,000 per day government subsidy to employers with fewer than 30 employees to offset the cost of paternity and family-care leave (Lexology briefing on Taiwan parental leave reform). From April 2026, foreign professionals on work permits and Employment Gold Cards become covered by the mandatory 6% Labor Pension employer contribution under the Act for Recruitment and Employment of Foreign Professionals, aligning expatriate coverage with that of local hires.

Work Permits and Visas in Taiwan

Work Permit Requirements

Who Needs a Work Permit

Taiwanese nationals and holders of Alien Permanent Resident Certificates (APRC) do not require a work permit. All other foreign nationals, including nationals of the European Union, the United States, Japan, and other visa-waiver countries, require a work permit issued by the Workforce Development Agency of the Ministry of Labor before commencing paid work in Taiwan. Spouses of Taiwanese citizens holding an Alien Resident Certificate under the family-based category may work without an additional permit, and spouses of Employment Gold Card holders received open-work rights under the 2026 amendments to the Act for Recruitment and Employment of Foreign Professionals. Students on a Resident Visa may work up to 20 hours per week with a student work permit.

Eligibility and Required Documents

Eligibility for a standard work permit under Article 46 of the Employment Service Act requires that the foreign worker fill a specialised, technical, or managerial role. Typical documentation includes a valid passport, signed employment contract, academic qualifications and apostilled transcripts, a CV showing at least two years of relevant experience (or a master’s degree), a company registration extract from the employer, and proof that the role cannot be filled by a local candidate. The Employment Gold Card requires the applicant to meet qualifying criteria in one of eight designated professional categories, such as technology, economics, or education, and is a combined four-in-one card incorporating resident visa, work permit, Alien Resident Certificate, and re-entry permit.

Processing Time and Validity

A standard work permit under the Employment Service Act is processed in 7 to 14 working days once the employer has filed a complete application with the Workforce Development Agency, and is typically valid for up to three years. The Employment Gold Card is processed in approximately 30 working days, including National Immigration Agency coordination, and is issued for one to three years depending on the applicant’s declared period of intended stay. Processing times can extend when documents require notarisation through a Taipei Economic and Cultural Office abroad, when the role sits in a regulated profession, or when additional background checks are required.

Renewal Process

Work permits and Employment Gold Cards are renewable upon application no earlier than four months before expiry. The employer files a renewal dossier with the Workforce Development Agency (for standard work permits) or the applicant files directly (for Gold Cards), and the Alien Resident Certificate is extended by the National Immigration Agency in parallel. The employee may continue working while the renewal is in progress, provided the application was filed before the current permit expired. After five continuous years of residence on an Alien Resident Certificate, foreign nationals may apply for an Alien Permanent Resident Certificate, removing the need for further work-permit renewals.

Common Visa Types for Foreign Workers

Work authorisation in Taiwan is managed jointly by the Ministry of Labor (work permits) and the Bureau of Consular Affairs and National Immigration Agency (resident visas and Alien Resident Certificates). An EOR can sponsor most categories of foreign hire, with the Employment Gold Card available as a self-sponsored alternative for highly qualified professionals. The following table summarises the main work-authorisation routes into Taiwan.

A few other visa categories exist but do not permit salaried employment on their own:

• Visitor Visa (Tourist, Business Visitor): permits short-term travel and business meetings but does not authorise paid work.
• Resident Visa for study: full-time students can work only with a student work permit limited to 20 hours per week during term.
• Diplomatic and Official visas: restricted to accredited representatives of foreign governments and international organisations.

How an EOR Handles Work Permits

When the employee is a foreign national, the EOR files the Article 46 work permit application, coordinates the Alien Resident Certificate with the National Immigration Agency, and manages the annual Labor Insurance and NHI registration for the foreign worker. The employee must provide personal documents (passport, academic certificates, criminal record certificate) and complete the in-country medical examination after arrival; the EOR handles every employer-side filing, including the Ministry of Labor advertising requirement, justification of the foreign hire, and the Alien Resident Certificate collection. Work permit filings extend the onboarding timeline covered in the Typical Onboarding Timeline section above by four to eight weeks, and longer for candidates who must first obtain a resident visa through a Taipei Economic and Cultural Office abroad. For Gold Card candidates, the applicant files directly with the Gold Card Office and the EOR takes over the payroll, tax, and insurance side once the card is issued. For a deeper look at Taiwan’s visa pathways, see our Taiwan work visa and permit guide.

Payroll, Taxes, and Social Security in Taiwan

Employer Contributions

Taiwanese employers fund the largest share of the country’s social insurance system, contributing approximately 19.7% to 20.5% of gross monthly salary depending on industry risk classification. The core components are Labor Insurance (a combined programme covering old-age, disability, death, and maternity), National Health Insurance, the Labor Pension (new scheme) at 6% of monthly wage, Employment Insurance, and Occupational Accident Insurance with industry-rated premiums. Contributions are calculated on the employee’s monthly insured salary, which is set by grade tables published annually by the Bureau of Labor Insurance and the NHI Administration, and each programme has a different statutory salary cap. Employers must file monthly premium returns with the Bureau of Labor Insurance and the NHI Administration and remit payments by the designated deadline (typically the last day of the following month) to avoid surcharges under the Labor Insurance Act.

Two adjustments matter for budgeting. First, the NHI employer rate of 3.10% is scaled by the national average dependent factor (approximately 1.56 in 2026), so the effective employer NHI cost is typically closer to 4.84% of insured salary. Second, from April 2026, foreign professionals on work permits and Employment Gold Cards must be covered by the mandatory 6% Labor Pension contribution, which previously applied only to Taiwanese and permanent resident workers; the rule is set out in the amended Act for Recruitment and Employment of Foreign Professionals and effectively raises the payroll cost of foreign hires by six percentage points.

Employee Payroll Deductions

Employees contribute roughly 4% to 5% of their monthly wages to social insurance, plus any applicable income tax withholding. The Labor Insurance and Employment Insurance employee shares are fixed percentages of insured salary up to the NT$45,800 cap, while the NHI employee premium is calculated on insured salary up to NT$313,000 and scaled by the dependent factor. Income tax is withheld at source under the National Taxation Bureau’s monthly withholding tables; in 2026, the monthly salary-income withholding threshold rises from NT$88,500 to NT$90,500, so employees earning below that threshold see no withholding on base pay.

Income Tax

Taiwan taxes residents on a progressive scale from 5% to 40% based on net taxable income after exemptions and deductions. The tax year is the calendar year, and individual returns are filed in May of the following year with the National Taxation Bureau. For fiscal year 2026, the personal exemption rises by NT$4,000 to NT$101,000 (NT$151,500 for taxpayers aged 70 or above), and the standard deduction for a single filer rises by NT$5,000 to NT$136,000. Non-residents (those present in Taiwan for fewer than 183 days in a calendar year) pay a flat 18% on salary for services rendered in Taiwan and have no access to personal allowances. The brackets and progressive-difference deductions for residents in 2026 are set out below.

Tax residents may claim itemised deductions (including medical, charitable contributions, insurance premiums, and mortgage interest) in place of the standard deduction, along with special deductions for salary income, disabled dependents, tuition, and rent. Taiwan employment income is subject to Alternative Minimum Tax (Basic Income Tax) at 20% on specified income categories above a NT$7.5 million threshold, which typically affects senior executives with substantial capital gains or overseas income rather than standard EOR hires.

Year-End Bonus and 13th-Month Pay

A formal 13th-month salary is not statutorily required by the Labor Standards Act, but the year-end bonus (年終獎金) is near-universal market practice. Most companies pay between one and two months of base salary immediately before the Lunar New Year, typically in mid-February. A 14th-month bonus (or mid-year bonus) is common in financial services, technology, and larger manufacturing employers, often paid around the Dragon Boat Festival in May or the Mid-Autumn Festival in September. Bonuses that exceed four times the employee’s monthly insured salary are subject to the 2.11% Supplementary NHI premium under Article 31 of the National Health Insurance Act, and all bonuses form part of the taxable wage base for Labor Insurance, NHI, and income tax.

Payroll Cycle

Taiwan employers pay salaries monthly, with payday commonly falling on the fifth or tenth of the following month. Under Article 23 of the Labor Standards Act, wages must be paid at least twice per month unless otherwise agreed in writing, which is how most companies default to once-monthly payroll. The pay slip must itemise gross wages, each statutory contribution, tax withholding, and the net amount transferred. Employers are required to maintain wage records and working-hour records for at least five years under Article 23 and Article 30 of the LSA, subject to Ministry of Labor inspection.

Cost of Hiring Through an EOR in Taiwan

How EOR Pricing Works

EOR providers in Taiwan typically price on one of two models: a flat monthly fee per employee (commonly USD $599 to USD $899 depending on salary band, complexity, and volume) or a percentage of gross salary (typically 8% to 15%). The fee is in addition to the employee’s gross salary and the mandatory employer contributions to Labor Insurance, NHI, the Labor Pension, and Occupational Accident Insurance. On top of these, the EOR may pass through certain variable costs, such as the Supplementary NHI premium on year-end bonuses, Employee Welfare Fund contributions if the client has 50 or more Taiwan employees, or expedited work permit filing fees. Remote People charges a transparent flat monthly fee with no mark-up on statutory contributions and no long-term contract lock-in.

Sample Total Cost Calculation

To illustrate the all-in monthly cost, consider a software engineer on a gross monthly salary of NT$150,000 (approximately USD $4,800) hired in the Greater Taipei area in 2026. The employee’s insured Labor Insurance salary is capped at NT$45,800 and the Labor Pension base is capped at NT$150,000, while the NHI base tracks the full gross. The following breakdown shows employer cost, employee cost, and net take-home pay, using mid-range assumptions for NHI dependent factors and Occupational Accident Insurance.

Three variables drive most of the spread in real quotations. First, the NHI dependent factor shifts the employer NHI cost by several percentage points depending on whether the employee has Taiwanese dependents on their NHI coverage. Second, Occupational Accident Insurance is industry-rated between 0.11% and 0.93%, so manufacturing or construction roles cost marginally more than professional services roles. Third, year-end bonuses and 14th-month payments add the Supplementary NHI 2.11% levy to the employer bill in the month the bonus is paid. For a deeper dive on the full cost structure, see our cost of EOR in Taiwan guide.

Ready to hire in Taiwan without setting up a local entity? Speak to our Taiwan EOR specialists and get a fixed monthly quote within 24 hours.

Benefits of Using an Employer of Record in Taiwan

Companies hiring into Taiwan through an EOR capture several commercial and operational advantages over the alternative of entity incorporation.

• Speed to hire: An EOR can onboard a Taiwanese national employee in one to two weeks, compared with the three to six months required to incorporate a Taiwan limited company, open a local bank account, and complete the Labor Insurance, NHI, and Labor Pension registrations for a new entity.
• No entity setup cost: Establishing a Taiwan branch or subsidiary typically costs USD $15,000 to USD $30,000 in one-off legal, accounting, and registration fees, plus annual compliance costs of USD $8,000 to USD $15,000 for audit, tax filing, and secretarial work. The EOR model converts this into a predictable per-employee monthly fee.
• Full compliance from day one: The EOR is the legal employer of record with the Bureau of Labor Insurance, NHI Administration, and Ministry of Labor, and carries responsibility for Labor Standards Act compliance, payroll tax filings, and statutory benefit administration. This removes the risk of misclassification, underpayment, or missed filing deadlines.
• Access to regulated roles and foreign hires: The EOR holds the Ministry of Labor registrations needed to sponsor Article 46 work permits and to operate in regulated industries, giving you immediate access to Taiwan’s broad talent pool without needing your own entity to hold those registrations.
• Easy exit: Closing a Taiwan subsidiary is a 12-to-18-month process involving tax clearance, de-registration with the Ministry of Economic Affairs, and final audits. With an EOR, scaling down means terminating the service agreement and the individual employment contracts with statutory notice and severance, at a fraction of the deregistration cost.
• Flexibility to convert later: Most EOR providers, including Remote People, support a smooth transition of your EOR employees to your own entity if you later choose to incorporate, preserving continuity of service for pension and severance calculations.
• Predictable budgeting: With a flat EOR fee plus statutory contributions, your fully loaded monthly cost per Taiwan hire is known up front, making headcount planning easier than trying to forecast the variable costs of running your own Taiwan entity.

Termination and Offboarding in Taiwan

Legal Grounds for Termination

The Labor Standards Act takes a restrictive approach to employer-initiated termination. Under Articles 11 and 12, employers may terminate only on specified legal grounds, and dismissals outside those grounds can be challenged as unfair and reversed by the labour tribunals, with reinstatement and back pay as remedies. Article 11 covers operational or business grounds (dissolution or transfer of business, business losses or contraction, force majeure suspension of operations for more than one month, change in business necessitating headcount reduction without redeployment options, or the employee being manifestly unable to perform the work), all of which require statutory notice and severance. Article 12 covers serious misconduct grounds (misrepresentation at hiring, violent or insulting conduct toward the employer or coworkers, conviction and sentence, serious breach of contract or work rules, causing significant damage through deliberate or grossly negligent acts, or unexcused absence of three continuous or six total working days in a month) and permits summary dismissal without notice or severance, subject to a 30-day window in which the employer must act after learning of the cause. Article 14 gives the employee a reciprocal right to resign with notice and severance if the employer breaches the contract, delays wages, or endangers health and safety. Dismissal during maternity leave, sick leave, and occupational injury leave is generally prohibited, and termination during pregnancy or the six months following childbirth is presumed discriminatory under the Gender Equality in Employment Act.

Notice Periods

Article 16 of the Labor Standards Act sets statutory minimum notice periods for employer-initiated termination on Article 11 grounds, based on the employee’s length of continuous service. Employers may pay wages in lieu of notice, and during the notice period the employee is entitled to two paid job-seeking days per week. Notice periods for employee-initiated resignation mirror the employer schedule for the first three years and are then capped at 30 days. The full schedule appears below.

Payment in Lieu of Notice

Under Article 16 paragraph 3, the employer may terminate the contract immediately by paying the employee wages for the full statutory notice period. The pay-in-lieu amount is calculated at the employee’s regular rate of wages for each day of foregone notice, and must be settled within 30 days of termination together with outstanding salary, unused annual leave, and severance.

Job-Seeking Leave

During the notice period, an employee terminated by the employer on Article 11 grounds is entitled to two working days per week of paid leave to search for new employment. The employee may take the leave contiguously or in single-day blocks, and the employer must continue to pay full wages for the time taken. Failure to provide the leave exposes the employer to Ministry of Labor inspection and administrative fines under Article 79 of the LSA.

Severance Pay

Taiwan operates a two-tier severance system based on which pension scheme covers the employee. Employees whose service began on or after 1 July 2005 are covered by the new Labor Pension Act, which entitles them to 0.5 months of average wages per complete year of service (with proportional calculation for partial years) capped at 6 months of average wages under Article 12. Employees whose service began before 1 July 2005 and who did not elect to switch to the new scheme remain under the old Labor Standards Act severance formula, which provides 1 month of average wages per year of service with no cap; hybrid calculations apply where the employee bridged both periods. In both cases, “average wages” means total wages over the last six months of employment divided by 180 days, capturing base salary, overtime, regular bonuses, and allowances. Severance is payable within 30 days of the termination date under the Regulations for Payment of Severance Pay.

Severance is not payable where the employee is dismissed on Article 12 grounds (serious misconduct), resigns voluntarily on their own initiative without employer cause, or retires on Article 53 or 54 conditions (retirement age or length-of-service thresholds). Severance is included in taxable income but is partially exempt under Article 14 of the Income Tax Act (exemption of the lesser of NT$188,000 per year of service or actual severance paid, capped by formula).

EOR vs. Other Hiring Models in Taiwan

EOR vs. Setting Up a Local Entity

Setting up a Taiwan limited company or branch gives you full control over employment but carries a substantial setup timeline and ongoing compliance burden. Incorporation requires Ministry of Economic Affairs approval, Taiwan Stock Exchange or National Development Council investment review for foreign-invested entities, local bank account opening (typically the longest pain point, taking one to three months), and registration with the Bureau of Labor Insurance, NHI Administration, and National Taxation Bureau before the first hire. Annual compliance includes corporate income tax (20%), business tax (5%), monthly VAT filings, audited financial statements for entities above the small-business threshold, and ongoing secretarial and legal fees.

EOR vs. Independent Contractors

Engaging Taiwanese workers as independent contractors (承攬 or 承攬契約) avoids Labor Insurance, NHI employer contributions, and Labor Pension, but carries significant misclassification risk. The Ministry of Labor and Taiwan courts apply a substance-over-form test that examines subordination, economic dependence, and integration with the employer’s business. Workers who regularly perform services under the direction of a single company, work fixed hours, use company-provided tools, and depend economically on that client are commonly reclassified as employees, with the company made liable for back contributions to Labor Insurance, NHI, and the Labor Pension, plus statutory severance, unpaid overtime, and penalties under Article 79 of the LSA. Contractor engagements also do not support Article 46 work permits for foreign nationals.

EOR vs. PEO

A Professional Employer Organisation (PEO) co-employs workers in partnership with a client that already has its own legal entity. In Taiwan, a true co-employment PEO model is not widely available because the Labor Standards Act vests employer duties with a single legal entity and does not recognise the dual-employer construct used in the United States. Taiwan providers that market “PEO” services are typically offering HR outsourcing to companies that already have a Taiwan entity, where the provider administers payroll, benefits, and compliance on the client’s behalf but the client remains the legal employer. The EOR model, by contrast, positions the EOR itself as the sole legal employer of record, removing the need for the client to hold a Taiwan entity.

Public Holidays in Taiwan

Taiwan observes approximately 12 to 15 paid public holidays per year, set by the Executive Yuan’s Directorate-General of Personnel Administration (DGPA) and published as the official work calendar. Under Articles 37 and 39 of the Labor Standards Act, public holidays are paid rest days; work performed on a designated holiday is compensated at 200% of regular wages for the first eight hours (treating the holiday as an additional paid day plus eight hours of premium work) and 266% thereafter, and the employee’s consent is required. When a holiday falls on a weekend, the DGPA typically designates an adjacent weekday as a makeup day, sometimes combined with a Saturday working day elsewhere in the year to create long holiday blocks around Lunar New Year and Mid-Autumn Festival.

The DGPA publishes the final calendar in mid-year, and makeup-day designations can shift published dates. Employers should check the official DGPA calendar each November for the following year’s exact schedule, particularly around the Lunar New Year and Mid-Autumn blocks where employees commonly plan travel. For the full current-year list, see our Taiwan public holidays guide.

How to Get Started with an EOR in Taiwan

Most EOR engagements in Taiwan follow the same sequence: a short scoping call to confirm the candidate’s profile, salary, and start date; a written quote covering monthly gross pay, employer contributions, and the EOR fee; signature of a master service agreement and the employee’s Taiwan employment contract under the Labor Standards Act; and parallel onboarding steps covering Labor Insurance, NHI, Labor Pension enrolment, bank account setup, and (for foreign nationals) work permit filing. Remote People’s process wraps all of this into a single flat fee, a signed quote within 24 hours of the scoping call, and a dedicated Taiwan payroll specialist who manages every monthly filing and any statutory updates (such as the 2026 minimum wage, parental leave, and foreign pension changes) on your behalf. To start a hire, share the candidate’s profile, desired start date, and any specific benefits you want to layer on top of the statutory package, and we will return a firm quote and an onboarding plan.