Taiwan Labor Law Guide for Hiring Employees and Contractors
This labor law guide for Taiwan has important information for businesses looking to hire employees or contractors in the country. Taiwan is a country in Asia.
In 2023, Taiwan’s economy has continued to demonstrate robust growth with a GDP of approximately $850 billion USD, positioning it as a major player in global commerce. Key sectors driving this growth include electronics manufacturing, information technology, and industrial goods. The high-tech sector, in particular, has cemented Taiwan’s reputation as a critical hub in the global supply chain. In addition to these, finance, services, and tourism also contribute significantly to the economy.
The currency used in Taiwan is the New Taiwan Dollar (NT).
Minimum Wage
NT$27,470 per month
Overtime Wage
1.34 times the regular pay
Meal Breaks
1 hour
Rest Breaks
10 minutes for every 4 hours worked
Working hours
8 hours/day, 40 hours/week
Salary Payment Cycle
Monthly
Payroll Taxes
Labor Insurance, National Health Insurance
Paid Vacation
Up to 30 days based on years of service
Overtime Hours
Over 8 hours per day, over 40 hours per week
Night Shift Hours
1.34 times the regular hourly wage
Holidays
11
No Work Days
Sundays
Employment contracts in Taiwan should be in written form and must include key clauses such as job description, salary, working hours, leave entitlements, termination conditions, and dispute resolution.
The labor laws distinguish between employees and contractors, with specific protections and obligations for each. Employees are generally entitled to greater statutory protections compared to contractors.
Certain categories of workers, such as interns or apprentices, may have different wage arrangements, but these must conform to specific regulations and often require government approval.
In addition to the minimum wage, employers are required to compensate employees with holiday pay for certain mandated public holidays.
Night shifts are defined as work performed between 10 PM and 6 AM, with employees earning 1.34 times their regular hourly wage during these hours.
The minimum age for employment is generally 15 years, with stringent regulations against child labor. Minors between 15 and 18 years old are subject to specific working conditions and restrictions, such as limited working hours and mandatory breaks.
- Labor Insurance: Contribution rate is approximately 10.5% of an employee’s salary.
- National Health Insurance: Contribution rate is about 5.17% of the employee’s salary.
| Income Level (TWD) | Applicable Tax Rate |
|---|---|
| 0 – 540,000 | 5% |
| 540,001 – 1,210,000 | 12% |
| 1,210,001 – 2,420,000 | 20% |
| 2,420,001 – 4,530,000 | 30% |
| 4,530,001 and above | 40% |
- Paid Vacation: Up to 30 days, based on years of service.
- Maternity Leave: 8 weeks.
- Paternity Leave: 5 days.
- Sick Leave: 30 days per year (paid at half salary for up to first 7 days of sick leave).
- Adoption Leave: Covered under Family Care Leave.
| Holiday | Date |
|---|---|
| Founding Day | January 1 |
| Lunar New Year | Varies (usually January-February) |
| Peace Memorial Day | February 28 |
| Tomb Sweeping Day | April 4-5 |
| Dragon Boat Festival | Varies (May-June) |
| Mid-Autumn Festival | Varies (September-October) |
| National Day | October 10 |
| Additional Traditional and Cultural Holidays | Various |
- Retirement Benefits: Contributions into the Labor Pension Fund.
- Healthcare Benefits: National Health Insurance (NHI).
- Gratuity: Typically, one month’s salary for each year of service over 25 years.
- Annual Bonuses: Commonly provided as a year-end bonus, but not legally required unless stipulated in employment contracts.
- Notice Period: 10 days for employment up to 1 year, 30 days for employment exceeding 1 year.
- Severance Benefits: Generally, half a month’s salary for each year of employment, but specifics can vary based on employment contracts and company policies.
- Legal Challenges: Employees can challenge wrongful termination through labor unions or the Taiwan Labor Court.
- Performance Issues: Consistent underperformance despite remedial interventions.
- Misconduct: Severe breaches of company policy or criminal activity.
- Operational Changes: Economic redundancy or structural reorganization.