Taiwan’s employment rules come from several main laws that outline what an employer must provide.
The Labor Standards Act covers wages, work hours, rest days, leave, and termination rules. The Labor Pension Act sets required pension contributions. The Labor Insurance Act and National Health Insurance Act require employers to register staff and make monthly insurance payments. The Employment Service Act adds the rules for hiring foreign professionals, including work permit steps and qualification checks.
1. Employment Contracts
Employment contracts in Taiwan must clearly state the role, pay structure, leave rules, and the employee’s enrollment in required insurance programs. Most workers are hired on indefinite-term agreements.
Fixed-term contracts are only allowed in limited situations, such as seasonal roles or time-bound projects. Authorities monitor their use closely to prevent employers from avoiding normal protections.
A PEO uses contract formats that follow the Labor Standards Act and reflect local expectations for working hours, wage items, attendance rules, and mandatory clauses.
2. Working Hours and Overtime
Taiwan’s rules limit work to eight hours a day and 40 hours a week. Employers must follow the system of one regular day off and one rest day each week. Any work performed on a rest day requires special pay, and overtime must stay within set monthly and yearly limits. Attendance records must be accurate, time-stamped, and kept in a format that can be reviewed by authorities.
A PEO handles these requirements by managing attendance data, recording overtime with proper employee consent, and applying the correct pay rates under the Labor Standards Act. This keeps working-hour practices consistent and compliant.
3. Minimum Wage
Taiwan regularly reviews and adjusts minimum wages. Employers must ensure that the fixed base salary, not bonuses or allowances, meets the required level. Payroll records must clearly show how wages are calculated, as these files are reviewed during inspections.
A PEO updates payroll settings when new rates take effect, checks that wage items are classified correctly, and prepares statements that show a compliant salary structure.
4. Employee Benefits
Taiwan’s benefit system is built around Labor Insurance, National Health Insurance, and the pension scheme under the Labor Pension Act. Employers must enroll staff on time, submit monthly filings, and follow the official formulas for insurance contributions. Pension payments must be calculated correctly at 6 percent of the employee’s monthly wages, with records kept in case authorities request a review.
A PEO handles these steps by preparing the enrollment forms, managing monthly contributions, and submitting filings on schedule. This ensures every employee receives the required coverage and that the employer meets its obligations without gaps or delays.
5. Payroll Tax or Social Contributions
Payroll administration in Taiwan requires employers to withhold income tax, calculate insurance premiums, and manage monthly pension contributions. The National Health Insurance system also requires supplemental payments on certain types of irregular income once they pass set thresholds.
Each item follows its own filing timeline and must be recorded in the correct format for review. A PEO handles these calculations, submits filings on time, and keeps payroll records organized so they are ready for inspection whenever needed. Statutory amounts and rates:
- The Labor Pension Act employer contribution is 6% of monthly wages
- NHI supplemental premium is 2.11% on irregular income above the set threshold
6. Termination and Severance Pay
Termination in Taiwan must follow the rules set out in the Labor Standards Act. Employers need a legally acceptable reason and must provide written notice within the required timeframe.
Severance depends on the pension system the employee falls. Most workers today are covered by the Labor Pension Act, which sets severance at half a month of average wages for each full year of service. A PEO manages the paperwork, pay calculations, and required notifications so the termination process stays aligned with statutory rules and avoids errors.
7. Foreign Workers
Foreign professionals in Taiwan must meet the qualification rules as per the Employment Service Act.
The process includes work permit approval, a resident visa, Alien Resident Certificate registration, and enrollment in required insurance programs. Each step has strict document requirements. The salary level, job title, and contract terms must match what was submitted in the permit application.
A PEO manages these filings, checks that contract wording and salary details meet the permit standards, and keeps the documentation in line with what authorities expect.