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Key Country Facts

Currency: New Taiwan Dollar (TWD)

Time zone: UTC +8

Capital city: Taipei

Official language: Mandarin is the official national language and is spoken by the majority of the population of Taiwan. It has been the primary language of instruction in schools since the Japanese rule ended. As in Hong Kong and Macau, traditional Chinese is used as the writing system in Taiwan.

Employment Contracts

Written contracts are not mandatory, but most businesses use them as they are highly recommended. They need to follow the Labor Standards Act (LSA) requirements. Upon mutual agreement, an employment contract can be conveyed in Chinese, English or any other language. In case of any future dispute, Chinese translation will be required.

The enforcement rules of the LSA suggest up to 13 items to be included in written contracts to outline the rights and obligations of employers and employees and to avoid disputes. Employers must meet or exceed the minimum terms of the LSA or other laws. Employers must seek agreement by a Labor Management Conference or Labor Union before changes to working conditions can be made.

Taiwan Holidays

There are 8 public holidays in Taiwan:

  • New Year’s Day – January 1
  • Lunar New Year – February 10-16
  • 228 Peace Memorial Day – February 27 to March 1
  • Children day/Tomb Sweeping Festival – April 2-5
  • International Labour Day – May 1
  • Dragon Boat Festival – June 12-14
  • Mid Autumn Festival – September 18-21
  • National Holiday – October 9-11


For employees who have commenced their employment:

  • Over six months but less than one year ago, he/she is entitled to three days leave.
  • Over one year but less than two years ago, he/she is entitled to seven days leave.
  • Over than two years but less than three years ago, he/she is entitled to 10 days leave.
  • Over than three years but less than five years ago, he/she is entitled to 14 days leave.
  • Over than five years but less than 10 years ago, he/she is entitled to 15 days leave.
  • Over 10 years, he/she is entitled to one additional day of leave (up to a maximum of 30 days).

You can refer to Article 38 of LSA for more details. The company can have more favorable plan than the LSA. However, per the LSA, employee has to work for the company for at least six month to become entitled to annual leave.

The employer and the employee can agree to carry over unused annual leave to the next year. However, any remaining annual leave must be converted into wages and paid to the employee at the end of the second year, or upon completion of the employment contract. When the employer and the employee do not agree to carry over unused annual leave to the next year or when their employment contract is terminated, one day’s regular wages must be paid for each day of unused annual leave remaining.

Employers must notify their employees of their annual leave entitlements and the total amount to be paid in respect of unused annual leave on an annual basis, and they must record this information in each employee’s salary roll. Employees should be notified in writing, electronically, or be provided with some means to access and print out the information, prior to the period when wages are usually paid each year.

Sick Leave

Employees receive a maximum of 30 days of non-hospitalized sick leave per year and up to one full year of hospitalized sick leave. After three days of sick leave, employees receive 50% of their regular pay from the employer, and 50% from Labor Insurance, up to a maximum of 6 months.
In case the insured person has at least one full year of insurance coverage prior to the occurrence of the injury or sickness, such benefits shall be payable for an additional six months. Any cash sickness benefit provided by labor insurance that is less than 50% must be made up by the employer.
The combined number of sick days taken generally cannot exceed one year within a two-year period. Employers can grant additional leave beyond the maximum one-year period at their discretion, or they can choose to terminate the employment relationship.
Employees can take additional unpaid leave with employer’s approval if their paid sick leave and annual leave allowances have been used. The employer can grant the employee an absence of leave without pay for a maximum period of one year.

Maternity/Paternity Leave

Female employees are entitled to maternity leave before and after childbirth for a combined period of eight weeks. If the employee has more than six months of service, she is entitled to full pay during her maternity leave. If she has been working less than six months, she is entitled to half-pay.
A male employee is entitled to five days of paid paternity leave when the mother of his child gives birth.


Any employee termination in Taiwan must be made pursuant to one or more of the specific causes set forth under Article 11 and 12 of the LSA, and the employer must provide advance notice (or an amount in lieu thereof), severance pay, and any outstanding payments or benefits where an employee is terminated for any of the causes stipulated under Article 11.

Severance pay is required and is calculated based on one month’s average wages for each year of service, but the amount payable for each year of service will be equal to 50% of the employee’s average monthly wage, for up to a maximum of six month’s pay.


Often a 13th or even 14th month of salary is provided to Taiwanese employees, although this is not required. The 13th and 14th month salaries are typically paid before the Chinese New Year Holiday. Festival bonuses may also be given before the Dragon Boat Festival and the Mid-Autumn Festival.

Taiwan Social Security

National Health Insurance (NHI): National health insurance contribution of 4.69% allocated among the employee (30%), the government (10%) and the employer (60%) (Percentages: employee 1.41%, employer 2.81%). It is subject to monthly earnings ceiling of TWD 182,000.

Labor Insurance: Taiwanese Legal Entities with more than 5 employees must contribute for labor insurance. Labor insurance benefits payment is divided into two main categories: ordinary risk insurance and occupational accident insurance. Ordinary risk insurance includes five kinds of cash benefits: maternity, injury or sickness, disability, old-age, and death benefits, while occupational accident insurance provides three types of benefits payable in cash, which are injury or sickness, disability and death benefits, plus medical benefits. The insurance contribution of 10% is shared by the employers (70%), the employees (20%), and the government (10%). The maximum monthly insurance salary is TWD 45,800 (Percentages: employee 2.0%, employer 7.0%).

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

Labor Pension: Employers must contribute at least 6% of employees’ monthly earnings. Employees can voluntarily contribute up to 6% of their wages. This must be deposited to a specific Individual Pension Account. Subject to monthly earnings ceiling of TWD 150,000.

Workers’ Compensation: Contribution by employers only, ranging from 0.06% to 2.97%. Applicable only to local employees.

This information does not constitute legal advice.

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