Foreign companies cannot legally employ workers in Taiwan without a registered local entity or an EOR. This is not a grey area. Direct employment of Taiwan residents by a foreign company with no Taiwan presence violates the Employment Services Act. EOR is the only compliant path to hiring in Taiwan unless you set up a branch office or subsidiary — which takes months. If you have engineers or sales hires in Taiwan and they’re technically employed by your overseas entity, fix this now.
Taiwan Employment at a Glance
| Detail | Value |
|---|---|
| Currency | New Taiwan Dollar (TWD / NT$) |
| Official Language | Mandarin Chinese |
| Labour Regulator | Ministry of Labor (MOL) |
| Working Week | 40 hours (max 8 hours/day) |
| Annual Leave | 3–30 days (based on years of service) |
| Probation Period | Not defined by law; typically 3 months |
Mandatory Contributions
Labour Insurance
- Employer: ~7.4% of insured salary
- Employee: ~2.1% of insured salary
National Health Insurance (NHI)
- Employer: ~3.1% of insured salary
- Employee: ~1.5% of insured salary
Labour Pension (New System — post-2005)
- Employer: 6% of monthly wages (mandatory, non-negotiable)
- Employee: Up to 6% voluntary additional contribution
Employment Insurance
- Included within labour insurance contributions
Labour Standards Act
Taiwan’s Labour Standards Act provides strong employee protections:
- Minimum wage: NT$27,470/month or NT$183/hour (2024)
- Overtime: 1.34× for the first 2 overtime hours; 1.67× thereafter; daily cap of 12 total hours
- Annual leave: Progressive — 3 days after 6 months, 7 days after 1 year, increasing to 30 days after 10+ years
- Maternity leave: 8 weeks at full pay for employees with 6+ months’ tenure
- Paternity leave: 7 days
- Termination notice: 10–30 days depending on tenure
- Severance: 0.5 months’ average wages per year of service under the new pension system (post-2005)
Using an EOR in Taiwan
EOR providers with Taiwan coverage:
- Deel — owned entity in Taiwan
- Remote — covers Taiwan with local compliance
- Papaya Global — payroll and EOR services in Taiwan
- G-P — long-standing Taiwan presence
Key Considerations
The “one fixed day off, one flexible rest day” rule: Every employee must have 2 rest days per 7-day cycle. One is a mandatory day off — overtime worked on this day is paid at the highest overtime multiplier (1.67×). The other is a flexible rest day — overtime is possible but still attracts a premium (1.34× for first 2 hours, 1.67× after). Misclassifying which day is which is a Ministry of Labor audit trigger.
Labour pension is a real cost at 6%: The mandatory employer pension contribution of 6% of monthly wages cannot be negotiated down or waived. Unlike some pension systems with salary caps, Taiwan’s new system applies to full monthly wages. Budget this as a fixed line item.
IP assignment and non-competes: Taiwan has strong IP protection, but employment agreements must explicitly address invention assignment — particularly for engineers. Non-compete clauses are enforceable for up to 2 years maximum, but require reasonable geographic scope, legitimate business interest, and — critically — compensation to the employee during the restricted period. Uncompensated non-competes are void.
China/Taiwan cross-strait considerations: Companies with operations in both China and Taiwan face cross-strait employment law differences, data transfer restrictions, and political risk sensitivities. Employee data cannot flow freely between the two jurisdictions. Ensure your EOR has a position on this if it’s relevant to your structure.
