Using an Employer of Record in Taiwan

Taiwan’s workforce ranks among the most technically skilled in Asia. So it’s no surprise that more companies are looking to build teams there. 

For companies looking to tap into this market, setting up a local entity is the obvious route. But it is not always the most practical one, as it involves various layers of regulatory approval. 

That’s where an employer of record in Taiwan comes in. An EOR helps you engage with the local talent and manage onboarding, payroll in Taiwan, benefits, and more without going through the entity registration process. 

You can get support to stay compliant with local rules while focusing on market expansion.

This guide covers hiring, onboarding, payroll, labor laws, leave, work permits, termination, and more in Taiwan. Or, if you’d rather talk to someone directly, reach out to our team at Payoneer Workforce Management.

How to hire employees in Taiwan

There are three main routes to engaging talent in Taiwan, and each has trade-offs worth knowing about:

1. Open a local entity: This means registering a company through the Ministry of Economic Affairs (MOEA), handling tax registration, and meeting all the requirements under the Labor Standards Act. Each step has its own processing window. However, setting up an entity is time and budget-consuming, and typically takes months before you can engage local talent.

2. Bring on contractors: This is a flexible way to engage local talent, but also carries a real risk of worker misclassification. Taiwan’s Employment Service Act doesn’t take that lightly, and penalties can follow.

3. Work with an Employer of Record: An EOR in Taiwan employs the worker on your behalf and supports with employment contracts, payroll, and local compliance. For most international companies, this is one of the quicker ways to expand into the market.

Payoneer Workforce Management allows businesses to onboard and engage talent in 160+ countries without the need to establish a local legal entity. We assist you in setting up localized benefits as per local laws and requirements.

How to onboard employees in Taiwan

Once you’ve made a hire, there’s a compliance checklist to work through. You’ll need to draft an employment contract, gather the employee’s documentation, register them with the Bureau of Labor Insurance (BLI), and get payroll and benefits running.

A typical onboarding flow looks like this:

• Payroll and benefits setup: Get the new employee into the local payroll system and finalize enrollment in the National Health Insurance Administration (NHIA) and labor insurance. This is non-negotiable under Taiwan law.
• Equipment and access: Laptops, software accounts, workspace access. The basics. It’s helpful if employers make sure they’re ready before day one.
• First-week orientation: Walk local talent through company policies, team norms, and their role-specific expectations.
• Team introductions: Set up meetings so they can connect with their immediate team and the wider organization. First impressions matter.

Payoneer Workforce Management helps companies engage talent across borders through a technology platform designed for compliance.

Pay employees in Taiwan

Salaries in Taiwan must be paid in New Taiwan Dollars (NT$). Most companies disburse wages on the last day of each month. Every employee is entitled to a full, direct payment with a detailed payslip.

Income tax and social security

Running Taiwan payroll means handling income tax withholding and social security contributions. 

For residents (those who stay 183 days or more), individual income tax follows a progressive scale between 5% and 40%. 

You can refer to the government site for a detailed tax breakdown.

On the social security side, Taiwan’s system runs through two main bodies: 

• The Bureau of Labor Insurance (BLI) handles labor insurance for private-sector workers. 
• The National Health Insurance Administration (NHIA) runs the compulsory health insurance program that covers all citizens and legal residents. 

Together, employer costs work out to roughly 19% of annual salary. For a detailed cost estimate, try our employee cost calculator.

Here’s an overview of employer contributions:

Besides, a Mandatory Supplementary NHI Premium is applied to employees whose monthly salary exceeds the NHI contribution base (TWD 219,500).

Calculated at 2.11% on the portion of salary above the contribution base.

An employer of record in Taiwan helps you streamline the process. 

Payoneer Workforce Management’s unified, all-in-one platform gives you a single dashboard to manage a global workforce. 

Employment laws in Taiwan

The Labor Standards Act (LSA) is the backbone of employment law in Taiwan. 

It prescribes standard work hours, overtime caps, notice periods, severance, and leave. There’s no statutory probationary period in the LSA.

Working hours

The standard working hours in Taiwan are 8 hours per day or 40 hours a week, this is excluding overtime.

Including overtime, an employee should not work more than 48 hours per week.

Overtime rules

Overtime can’t exceed 4 hours in a single day, or 46 hours in a month. The premium rates are worth knowing:

Staying on top of these rules is critical. Payoneer Workforce Management can help you stay compliant when navigating local labor laws.

Minimum wage in Taiwan

The minimum wage in Taiwan sits at TWD27,470 per month (about US$859). 

If employers pay below the legal floor, the local authorities can impose a fine. 

It’s worth bookmarking the Ministry of Labor’s English site for annual updates.

Employment contracts in Taiwan

Taiwan’s LSA recognizes two contract types: 

1. Indefinite-term contracts are for ongoing work with no set end date. 
2. Fixed-term contracts are for temporary or project-based roles. 

Most full-time roles fall under the first category.

Written contracts aren’t always legally required, but having one in place helps standardize onboarding. 

A clear written agreement helps both sides avoid disputes. 

At a minimum, an employment contractin Taiwan should be bilingual (English, Chinese), and typically includes:

• Employee’s name and personal details
• Contract type: fixed-term or indefinite
• Start date, job title, and responsibilities
• Salary, bonuses, and benefits
• Working hours and leave entitlements
• Probation details, if any
• Termination conditions, notice periods, and severance

Working with an employer of record in Taiwan makes contract drafting much simpler. Payoneer Workforce Management helps you set up localized benefits and create compliant contracts tailored to local regulations.

Leave policy in Taiwan

Taiwan’s leave entitlements are detailed and, in many cases, more generous than what you’d find in other parts of Asia. Both the LSA and the Act of Gender Equality in Employment set the baseline.

Annual leave

Paid annual leave scales with tenure. Here’s how it works:

Unused leave at year-end? The employee has a right to be paid out for those days. Or both parties can agree to roll unused days into the next year.

Sick leave

Workers get up to 30 days of paid sick leave per year at 50% of their regular pay. If hospitalization is needed, unpaid sick leave extends up to 1 year.

Maternity and paternity leave

Employees who give birth receive 8 weeks of maternity leave. 

The maternity pay rate is based on the employee’s service duration:

• More than 6 months – 100% of the regular salary
• Less than 6 months – 50% of the regular pay

Maternity benefits are primarily covered by the labor insurance, and the employer is required to cover any shortfall.

Fathers get 7 days. Beyond that, there’s unpaid childcare leave of up to 2 years. 

Taiwan also grants 7 days for pregnancy checkups and 1 day per month of menstrual leave at 50% of the regular wage.

Public holidays and other types of leave

The calendar includes 15 public holidays. On top of that, employees can take 8 days of wedding leave and paid compassionate leave of 3 to 8 days (depending on the relationship). There’s also 14 days of unpaid personal leave per year.

Work permit in Taiwan

Foreign nationals can’t work in Taiwan without a valid work permit. The employer is responsible for applying through the Workforce Development Agency (WDA), which operates as a one-stop shop under the Ministry of Labor.

Further, a company less than a year old needs at least NT$5 million in operating capital or NT$10 million in annual revenue to sponsor foreign workers.

After arriving, foreign workers have 15 days to get an Alien Resident Certificate (ARC). It’s valid for up to a year and renewable. 

For more on the process, check the Foreign Professionals Act portal.

Background check in Taiwan

Background checks are common but not mandatory in Taiwan. They’re governed by the Personal Data Protection Act, which means you’ll need explicit written consent from the candidate before running any screening.

Typical checks cover criminal records, past employment, education credentials, and references. The key rule: handle personal data with care and stay within the bounds of Taiwan’s privacy laws.

Employers should refer to local regulations before initiating background checks in Taiwan.

Employment termination in Taiwan

In Taiwan, you need to provide a valid reason to the employees to terminate their employment. Without one, you’re looking at an unfair dismissal claim, and courts here take those seriously. 

Employees can be terminated on the following grounds

• A resignation by employees
• Mutual agreement
• Probation-period dismissal
• Termination for cause (misconduct, poor performance, or unexcused absences)

Notice periods

How much notice you owe depends on how long the person has been with you:

Severance pay

Severance pay equals one month’s average wage for each year of service. If the employee has worked for less than a year, severance is calculated proportionally. Service of less than one month is counted as one full month.

Company registration in Taiwan

If you are looking to incorporate a business in Taiwan, you’ll have to register through the Administration of Commerce under the MOEA. 

The process typically goes like this: 

• Reserve a company name
• Get foreign investment approval from the Investment Commission
• Open a bank account in Taiwan and remit your capital, have a CPA certify the invested amount, register the company, and then register with the tax office.

Foreign investors need prior approval from the Investment Commission of the MOEA. 

For more information, you can refer to the government sources.

As a simpler alternative, you can use an employer of record in Taiwan to engage local talent fast. 

Payoneer Workforce Management allows businesses to compliantly onboard and engage talent in 160+ countries without needing to establish a local legal entity.

PEO in Taiwan

A Professional Employer Organization (PEO) handles HR and payroll tasks for you, but there’s a catch: you still need a local entity. The PEO co-employs your workers alongside you. It’s a shared arrangement.

An employer of record in Taiwan works differently. No local entity needed. The EOR acts as the legal employer for the local team and helps navigate local compliance obligations. For companies testing the Taiwanese market or hiring just a few people there, this is the smarter call.

Payoneer Workforce Management’s Employer of Record Services in Taiwan

Payoneer Workforce Management helps growing companies onboard, manage, and pay employees in Taiwan without the overhead of a local entity.

As your EOR in Taiwan, we support with employment contracts, payroll, benefits, taxes, timesheets, and more. 

Book a demo to learn more about how Payoneer Workforce Management can help with your business expansion.

FAQs

1) What does it cost to hire someone in Taiwan?

Employer costs start at around 19% on top of salary, based on an annual salary of US$60,000. The actual number depends on the specific salary, benefits, and insurance tiers. For a more precise figure, use our employee cost calculator.

2) Why should I use an EOR instead of setting up an entity?

Speed and simplicity. Setting up an entity in Taiwan takes months. An employer of record lets you access and engage local talent in days. You also get support to manage ongoing compliance. An EOR, Payoneer Workforce Management supports talent engagement in 160+ countries and payments in 70+ currencies.

3) How many hours can employees work per week in Taiwan?

The standard is 8 hours a day, 40 hours a week. Overtime tops out at 4 extra hours daily and 46 hours monthly. Overtime pay kicks in at 134% for the first 2 hours and 167% after that. The maximum working hours, including overtime, are 48 hours per week, and an employee should not work beyond that.

4) Can I hire in Taiwan without a local entity?

Yes, you can by using an employer of record in Taiwan. The EOR acts as the legal employer and supports payroll, benefits, and regulatory compliance. You retain operational control. Talk to our team to see how Payoneer Workforce Management can support your expansion into Taiwan.

5) Do I need to provide a Lunar New Year bonus in Taiwan?

It’s not legally required. But it’s widely expected. Most employers in Taiwan pay an annual bonus around the Lunar New Year as a goodwill gesture. Skipping it could hurt retention and morale, so it’s worth budgeting for it even though the law doesn’t mandate it.