Employer of Record in Taiwan

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

Businesses can only operate smoothly in Taiwan if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Taiwan below, to avoid any compliance issues.

Employment Contract Requirements

In Taiwan, two contract types are utilised: fixed term for temporary or short-term positions, and indefinite term for both part-time and full-time roles. These employment contracts do not need to be in formal writing for legal validity, but it is recommended to indicate the following basic employment terms:

• Designated workplace and working hours
• Starting and conclusion date
• Job title and responsibilities
• Vacations and leave entitlements
• Wages
• Rules of conduct
• Work discipline

Onboarding Process

We can help you get a new employee started in Taiwan quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.

For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Probation Period in Taiwan

While probationary periods are a common practice in Taiwan, they are not explicitly mentioned in the country's Labor Standards Act (LSA). Typically, for permanent definite employment, the probationary period lasts for three months.

In Taiwan, standard working hours amount to 8 hours per day or 40 hours per week. The total weekly working hours must not surpass 48 hours. Employees can work up to 12 hours a day (regular & overtime), with a monthly overtime cap of 46 hours and a 3-month limit of 138 hours.

Overtime work, as outlined in employment contracts or collective agreements, is compensated according to specified rates.

The initial 2 hours of overtime receive a rate of one-third over and above the regular salary, while the subsequent 2 hours are compensated at a rate of two-thirds over and above the regular salary.

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Employment laws in Taiwan can be intricate, and even unintentional mistakes in contracts, benefits, or termination processes can carry legal and reputational consequences. With an Employer of Record, you gain a local partner that ensures every hire is compliant. The EOR takes care of drafting compliant contracts, processing accurate payroll, managing contributions to statutory benefits, and handling lawful terminations if needed, all according to local employment standards.

This level of protection is especially valuable when expanding into new or unfamiliar regions. Instead of using time and resources to build in-house legal knowledge, you gain immediate access to local expertise. The EOR keeps you ahead of regulatory updates and shields your company from potential compliance gaps, so you can confidently hire and manage employees while minimizing risk. For hiring managers and founders, it's the difference between hiring with uncertainty and building your team on a legally sound foundation.

Managing payroll in Taiwan requires careful attention to the country's comprehensive social security system and tax regulations. Employers must navigate multiple mandatory contributions including Labor Insurance (8.05%), National Health Insurance (5.17%) - at 60% contribution = 3.102%, Employment Insurance (0.7%), and Labor Pension (6%), totalling approximately 17.582% of employee salaries. Compliance with monthly filing deadlines is critical, with most submissions due by the 10th or end of each month. Taiwan's progressive income tax system requires proper withholding based on residency status, with rates ranging from 5-40% for residents.

Using payroll management software can help employers consolidate payroll data, automate calculations, and stay compliant with Taiwan's complex regulatory requirements, reducing the risk of penalties and ensuring smooth business operations.

When you’re scaling quickly, setting up local payroll systems in each new country slows you down. In Taiwan, the administrative load can include government registration, benefits management, and accurate, on-time payment delivery. An EOR gives you a plug-and-play solution that handles all of this while your internal team stays focused on growth, not red tape.

Key Ways an EOR Supports Payroll in Taiwan:

• Rapid Payroll Setup: Onboards employees quickly with ready-to-go infrastructure.
• End Administration: Handles salary, tax, and benefits with no extra internal resources.
• Vendor Simplicity: Consolidates payroll across countries for centralized oversight.
• No Entity Required: Operates legally, saving your business the time and resources needed for local incorporation.

In Taiwan, work permits and visas are essential for employers hiring foreign workers. The process involves determining the appropriate visa type, submitting applications, providing necessary documentation, and ensuring compliance with Taiwan's labor regulations.

The key visa types include the Employment Gold Card for highly skilled professionals, the Specialized Talent Work Visa for individuals with specialized expertise, the Investor Visa for entrepreneurs, and the Teaching Visa for foreign educators. Employers must meet all requirements and sponsor their employees' visa applications to ensure a smooth employment process.

Mandatory Leave Entitlement in Taiwan

The annual leave entitlement in Taiwan is 3 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Taiwan

Full-time employees in Taiwan are paid for public holidays, which can be either fixed or based on the lunar calendar. Employers and employees can negotiate adjustments, and Taiwan observes various national and public sector holidays, including:

Paid Time Off in Taiwan

In Taiwan, the allocation of paid leave is stipulated by the employment contract and is dependent on the number of years of service completed. The accumulation of annual leave is as follows:

• 6 months to less than 1 year of service: 3 days paid leave
• 1 year of service: 7 days paid leave
• 2 years of service: 10 days paid leave
• 3 years of service: 14 days paid leave
• 5 years of service: 15 days paid leave
• Upon completing 10 years of service, an additional day is provided with a maximum of 30 days

Maternity Leave In Taiwan

Employees are entitled to 8 weeks of fully paid maternity leave at 100% of the regular salary rate, if they have been employed for more than 6 months or at 50% of their regular pay, if the employment duration is less than 6 months. Additionally, they can take 7 days of leave for medical check-ups before childbirth.

Paternity Leave In Taiwan

Spouses are entitled to 7 days of paternity leave with full pay, and the employer is responsible for covering the cost.

Sick Leave In Taiwan

Non-hospitalised sick employees receive 30 days of leave annually at 50% of the regular salary, and if covered by labour insurance, the employer compensates the difference. If an employee needs to be hospitalised, they are entitled to unpaid sick leave for up to 1 year. This period cannot exceed 1 year in each 2 consecutive years.

Parental Leave In Taiwan

Employees with 6 months of service can take up to 2 years of parental leave until their child turns three. The parental leave allowance, provided by the Bureau of Labor Insurance, is 60% of the insured persons average monthly salary for the preceding 6 months. This subsidy is capped at a maximum of 6 months per child. Both parents have a total of 2 years of unpaid parental leave and can negotiate its distribution.

Bereavement Leave

In an event where an employee expreiences the death of an immediate family member, they are eligible for a leave of up to 8 days.

National Service

The National Service is an official paid leave provided to employees who are required for national service duties or education.

For startups and small teams, managing global employee benefits isn’t just complex, it’s a full-time job. In Taiwan, understanding what benefits are required, how to deliver them, and how to stay compliant can be overwhelming, especially without local HR expertise. An Employer of Record removes that pressure by taking complete ownership of benefits administration, so you don't have to become an expert in local employment law.

Whether it’s healthcare contributions, pension enrollment, or statutory leave, the EOR ensures everything is delivered accurately and on time. They navigate any country-specific nuances, keep up with legal changes, and ensure each benefit is properly tracked and documented. For founders, that means fewer distractions and more time to focus on growth. Your employees get the security and support they expect from a local employer, and you get to scale your team in Taiwan without building complex infrastructure or worrying about compliance missteps.

Termination Process in Taiwan

Terminating employment should comply with the Labour Standards Act. Mutual termination agreements, subject to case-specific terms, may also be utilised. Both parties must give prior notice, provide payments in lieu, and settle any remaining holidays, payments, or benefits upon termination.

Notice Period in Taiwan

The notice periods in Taiwan extend based on the following length of employment:

• Less than 3 months of service: no notice required
• 3 months to 1 year of service: 10 days notice
• 1-3 years of service: 20 days notice
• More than 3 years of service: 30 days notice

Severance in Taiwan

Severance pay in Taiwan under the Labor Pension Act - required for redundancy or poor performance termination - is typically 50% of the average monthly pay per year, up to a maximum of 6 months' pay. For those under the LSA pension system, including foreigners and local employees, it amounts to one month's average pay per year of employment.