How Do You Pay Remote Employees in Taiwan?

Step-by-Step Process for Paying Remote Employees in Taiwan

1. Verify that the worker is correctly classified as an employee under the Labor Standards Act (LSA) and not as an independent contractor.
2. Register your company with the Ministry of Labor (MOL) and obtain a Unified Business Number (UBN) for tax purposes.
3. Open a local bank account to facilitate payroll transactions in New Taiwan Dollars (TWD).
4. Collect required documentation, including the employee's National Identification Card, employment contract, and bank account details.
5. Set a compliant pay schedule, typically monthly, as per the LSA requirements.
6. Process payroll ensuring correct withholding of labor insurance, health insurance, and pension contributions.
7. Pay employees via compliant methods such as bank transfer and provide itemized payslips as required by the LSA.
8. Remit payroll taxes and social security contributions to the National Taxation Bureau and the Bureau of Labor Insurance on a monthly basis.
9. File annual tax returns and provide employees with a withholding tax statement by the end of May each year.
10. Ensure compliance with local labor laws regarding minimum wage, working hours, and overtime pay.

What Are The Legal Ways To Pay Taiwan-Based Employees From Another Country?

Local Bank Transfer

• Best for: Employers with a registered entity in Taiwan paying employees via domestic bank transfers in TWD.
• Pros: Cost-effective, fast settlement, and widely accepted by Taiwanese employees and banks.
• Limitations: Requires local bank accounts and registration with Taiwanese authorities; cross-border funding may introduce FX costs.
• Compliance note: Payroll must comply with the LSA and tax regulations; wages must be paid in TWD and reported under local systems.

Direct Payroll Services

• Best for: Companies with a Taiwanese entity that want to outsource payroll calculations, filings, and compliance.
• Pros: Ensures accurate tax withholding, automated filings with the National Taxation Bureau, and reduces administrative burden.
• Limitations: Still requires entity setup and oversight of compliance with local labor laws.
• Compliance note: Subject to local tax regulations and the LSA; no restrictions on paying in TWD, but strict reporting and deposit schedules apply. Playroll's Global Payroll services manage this end-to-end.

EOR Platform Disbursement

• Best for: Foreign companies hiring Taiwan-based employees without establishing a local entity.
• Pros: The EOR becomes the legal employer, handling payroll, tax filings, benefits, and compliance with Taiwanese authorities.
• Limitations: Higher cost than direct payroll and less direct control over employment contracts.
• Compliance note: EOR providers manage registration, tax remittance, and reporting obligations with the MOL and tax authorities. Explore Playroll's Employer of Record services.

Contractor Payment Platforms

• Best for: Paying Taiwan-based independent contractors for project-based or flexible work arrangements.
• Pros: Simplified onboarding, cross-border payments, and reduced administrative overhead.
• Limitations: Does not cover employee benefits, tax withholding, or labor law protections; higher misclassification risk.
• Compliance note: The MOL enforces strict classification rules; contractor platforms do not assume employer obligations. Explore Playroll's Contractor Management Platform.

What Taxes Do I Need To Handle for Taiwan Employees?

• Individual Income Tax (National Taxation Bureau): Withheld from employee wages; progressive rates ranging from 5% to 40%.
• Labor Insurance (Bureau of Labor Insurance): Employer and employee contributions; rates vary based on salary.
• National Health Insurance (Ministry of Health and Welfare): Employer and employee contributions; standard rate of 4.69% shared between parties.
• Pension Contributions (Bureau of Labor Insurance): Employer contributions of 6% to the employee's pension fund.

Use Playroll's payroll tax calculator to estimate your total employer costs in Taiwan.

What Are the Biggest Compliance Risks When Paying Employees in Taiwan?

• Worker misclassification (Ministry of Labor): Misclassifying employees as contractors can result in penalties and back payments under the LSA.
• Payroll tax errors (National Taxation Bureau): Incorrect tax withholding or late payments can lead to fines and interest charges.
• Permanent establishment risk (National Taxation Bureau): Employing workers in Taiwan may create a taxable presence for foreign companies, triggering corporate tax obligations.
• Late filings and reporting penalties (National Taxation Bureau): Missing deadlines for tax filings can result in fines and increased scrutiny.
• Wage law violations (Ministry of Labor): Non-compliance with minimum wage, overtime, or other labor laws can lead to legal action and penalties.
• Social insurance non-compliance (Bureau of Labor Insurance): Failing to register or contribute properly can result in penalties and legal liabilities.

Pay Your Remote Employees in Taiwan

Pay your remote employees compliantly in Taiwan, without the heavy lifting. We support local payroll where you have your own entity or for international hires with Playroll’s EOR services.

• Accurate payroll processing: Gross-to-net processing, compliant payslips, and on-time payments — aligned with Taiwan's pay frequency requirements and itemized payslip obligations under the LSA.
• Taxes & contributions covered: Registrations, filings, and remittances to the National Taxation Bureau, Bureau of Labor Insurance, and other relevant agencies.
• Built for local compliance: We handle statutory obligations and year-end reporting, including tax returns and social insurance contributions in Taiwan.

Book a demo to run payroll in Taiwan with confidence.