Hire Employees in Taiwan in 2024

How Much Does It Cost to Hire Employees in Taiwan?

The cost of hiring employees in Taiwan can vary significantly based on the industry, the nature of the job, and the employee’s skills, qualifications, and experience. However, there are several standard components to consider when calculating the cost of hiring employees:

1. Base Salary. This is typically the largest portion of employee costs. There is a minimum wage in Taiwan, but salaries for skilled positions care usually significantly higher. For more information, check out our guide to the average wage in Taiwan. 
2. Statutory Benefits. Employers in Taiwan are required to contribute to labor insurance, health insurance, and pension funds for their employees. These contributions can amount to approximately 20% of the employee’s monthly wage.
3. Other Benefits. In addition to statutory benefits, employers may choose to provide other benefits such as bonuses, housing allowances, transportation allowances, meal subsidies, or private health insurance. These can significantly increase the total cost of employment.
4. Recruitment Costs. This includes the costs of advertising the position, conducting interviews, and possibly hiring a recruitment agency. The cost can vary widely depending on the complexity of the recruitment process.
5. Training Costs. New employees may require training or orientation, which can also add to the cost of hiring.
6. Legal and Administrative Costs. Setting up contracts, payroll, and complying with local labor laws can also incur costs, especially if you need to hire legal or HR experts.
7. Severance Pay. In Taiwan, employers may need to provide severance pay when terminating an employee, which can be a significant cost.

Remember that these are estimated costs and the actual cost of hiring an employee in Taiwan can vary. You should consult with local HR and legal experts to get a more accurate understanding of the costs involved in your specific case.

What Are the Legal Requirements for Hiring Employees in Taiwan?

Hiring employees in Taiwan involves a number of legal requirements and obligations. Here are some of the key ones you should be aware of:

1. Labor Laws. The primary legislation governing employment in Taiwan is the Labor Standards Act (LSA). The LSA outlines employers’ obligations relating to working hours, rest days, overtime, wages, and termination of employment contracts.
2. Employment Contracts. While oral contracts are legally binding in Taiwan, it is highly recommended to have written employment contracts. The contract should clearly state the terms of the employment relationship, including the employee’s position, responsibilities, salary, working hours, and leave entitlements.
3. Minimum Wage. Employers must comply with the minimum wage regulations. As of 2023, the minimum wage in Taiwan is NT$ 26,400. 
4. Statutory Benefits. Employers are required to contribute to labor insurance, health insurance, and pension funds for their employees. The rates are set by the government and can amount to approximately 20% of the employee’s monthly wage.
5. Working Hours and Overtime. The standard working hours in Taiwan are eight hours per day and 40 hours per week. Employees should not work more than 46 hours of overtime per month, and overtime should be compensated at the rates specified in the LSA.
6. Leave Entitlements. Employees are entitled to various types of leave, including annual leave, sick leave, maternity leave, and paternity leave. Employers must comply with the rules and requirements for each type of leave.
7. Termination and Severance. Employers must provide a written notice and a valid reason for termination. Depending on the employee’s length of service, employers may need to provide severance pay as specified in the LSA
8. Non-Discrimination. Taiwan’s Gender Equality in Employment Act and the Employment Service Act prohibit discrimination in employment on the basis of factors such as gender, marital status, pregnancy, and family responsibilities.
9. Workplace Safety. Employers are required to comply with the Occupational Safety and Health Act, which aims to ensure a safe working environment.
10. Record Keeping. Employers are required to keep records of their employees’ work hours, wages, and leave.

These are some of the key legal requirements for hiring employees in Taiwan, but this is not an exhaustive list. The specific requirements can vary depending on the nature of the job and the industry. It’s highly recommended to consult with a local legal or HR expert to ensure compliance with all local laws and regulations.

What Are the Key Ways to Hire Employees in Taiwan?

Hiring employees in Taiwan can be done in several ways, each with its own advantages and complexities. Here are some of the most common methods:

1. Direct Hiring. This is the most traditional method where you hire employees directly, either through job postings, recruitment agencies, or networking. This requires a solid understanding of local labor laws and practices, as well as the ability to manage payroll, tax, and other HR tasks in Taiwan.
2. Professional Employer Organization (PEO). A PEO acts as a co-employer to your employees. The PEO in Malaysia hires employees on your behalf and takes care of all HR-related tasks such as payroll, tax, and compliance with local labor laws. However, you still maintain control over the employees’ day-to-day tasks and responsibilities. A Taiwan PEO often offers support with other employment-related processes such as Taiwan work permits and visas. 
3. Employer of Record (EOR). An EOR is similar to a PEO, but they become the legal employer for your Malaysia-based employees. In addition to handling HR tasks, an EOR also assumes legal responsibility for the employees. This can provide an extra layer of protection, but it also means that the EOR has more control over the employees.
4. Staffing Agencies. Staffing agencies can help you find temporary or contract workers in Taiwan. This can be a good option if you need employees for a short-term project or if you want to try out an employee before offering them a permanent position.
5. Joint Venture or Partnership. If you’re planning to establish a long-term presence in Taiwan, you might consider forming a joint venture or partnership with a local company. This can provide you with local expertise and resources, but it also involves sharing control over the business.
6. Establishing a Local Entity. If you have significant operations in Taiwan, it might be worth establishing a local entity such as a branch office or a subsidiary. This can give you more control over your operations, but it also involves significant costs and legal responsibilities.

Each of these methods has its own pros and cons, and the best option will depend on your specific circumstances and needs. It’s recommended to consult with a legal or HR expert to help you decide the best approach for your business.

What Are the Steps Businesses Need to Take to Hire Employees in Taiwan?

Hiring employees in Taiwan involves several steps, from identifying your staffing needs to ensuring legal compliance. Here’s a general overview:

1. Identify Staffing Needs. Before you start the hiring process, define the roles and responsibilities of the position, the skills and qualifications required, and the salary range.
2. Recruitment. Post job vacancies on job portals, websites, or engage recruitment agencies to find potential candidates. You can also utilize networking events and social media platforms.
3. Interview Process. Screen resumes, conduct interviews, and evaluate candidates based on their skills, experience, and fit with your company culture.
4. Job Offer. Once you’ve chosen a candidate, extend a job offer. This typically includes details about the position, salary, benefits, and other terms of employment.
5. Employment Contract. Draft an employment contract in accordance with Taiwan’s Labor Standards Act. It should clearly state the terms of the employment relationship, including the employee’s position, responsibilities, salary, working hours, and leave entitlements.
6. Onboarding. Once the candidate accepts the offer and signs the contract, you should conduct an onboarding process to introduce them to their role and your company’s policies and procedures.
7. Register Employee. After hiring, register the employee with the relevant government agencies. This typically involves enrolling them in labor insurance, health insurance, and pension plans.
8. Payroll Setup. Set up payroll for the new employee, ensuring compliance with Taiwan’s tax laws and regulations.
9. Compliance. Ensure compliance with all relevant labor laws, including working hours, rest days, overtime, minimum wage, leave entitlements, and workplace safety requirements.
10. Ongoing HR Management. Manage ongoing HR tasks such as performance management, payroll, leave management, and legal compliance.

These steps provide a general outline of the process, but the specifics can vary depending on your company’s size, industry, and the nature of the job. It’s recommended to consult with local HR or legal experts to ensure that you follow all the necessary procedures and comply with local labor laws.