Updated on: 2025/08/07 09:56 (UTC)
Overview
Taiwan, also known as the Republic of China, is located in eastern Asia to the southeast of the People’s Republic of China and is bordered by the East China Sea to the north, the Philippine Sea to the east, the Luzon Strait to the south, and the South China Sea to the west. The primary component of Taiwan is the eponymous island of Taiwan, which at its closest point to the People’s Republic of China is about 130 kilometers afar.
Taiwan also consists of numerous, far smaller islands in multiple archipelagos. Among the archipelagos are two that have more than 100,000 residents: the Kinmen Archipelago and the Penghu Archipelago. The Kinmen Archipelago, which is to the west of the island of Taiwan, is by far the closest part of Taiwan to the People’s Republic of China and at its closest point to the People’s Republic of China is about 5 kilometers afar. The Penghu Archipelago also is to the west of the island of Taiwan but at its closest point to the People’s Republic of China is about 130 kilometers afar. Taiwan is relatively close to the Philippines, which is to the south of Taiwan, and with the shortest distance between the two, the narrowest point of the Bashi Channel that separates Taiwan’s Orchid Island from Y’Ami Island of the Philippines, about 110 kilometers. Taiwan also is relatively close to Japan, which is to the east of Taiwan, and with the shortest distance between the two about 110 kilometers between the island of Taiwan and Japan’s Yonaguni Island.
There are three classes of first-order administrative divisions in Taiwan: counties, special municipalities, and provincial cities. The names Chiayi and Hsinchu both are shared by a county and provincial city of Taiwan. The 13 counties of Taiwan are Changhua, Chiayi, Hsinchu, Hualien, Kinmen, Lienchiang, Miaoli, Nantou, Penghu, Pingtung, Taitung, Yilan, and Yunlin. The six special municipalities of Taiwan are Kaohsiung, New Taipei, Taichung, Tainan, Taipei, and Taoyuan. The three provincial cities of Taiwan are Chiayi, Hsinchu, and Keelung.
The primary written and spoken language used in Taiwan is Modern Standard Chinese, also known as Modern Standard Mandarin, Standard Mandarin Chinese, Standard Chinese, and Standard Mandarin, and also commonly referred to as Mandarin and as Chinese even though there are multiple languages referred to with these simplified names. The English language is commonly used in Taiwan, as is a variety of the Chinese macrolanguage known as Taiwanese Hokkien. The writing system for Modern Standard Mandarin is a logographic writing system with characters known as Hanzi. While Modern Standard Mandarin is written in Taiwan, Hong Kong, and Macau predominantly through using traditional Chinese characters, also known as traditional Hanzi, Modern Standard Mandarin is written in the People’s Republic of China excluding Hong Kong and Macau predominantly through using simplified Chinese characters, also known as simplified Hanzi. The differences in the predominant writing systems used in Taiwan and the People’s Republic of China, combined with differences between Taiwan and the People’s Republic of China regarding Mandarin pronunciation and word choices to convey concepts, have caused Modern Standard Mandarin as used in Taiwan to be also referred to as Taiwanese Mandarin and as Taiwanese Chinese and Modern Standard Mandarin as used in the People’s Republic of China excluding Hong Kong and Macau to be also referred to as Mainland Mandarin and as Mainland Chinese.
There are two directionalities that are currently used for written Modern Standard Chinese text, and a document written with one of these directionalities typically does not also include text written with the other directionality. The directionality more commonly used in Taiwanese governmental documents, as is used for English writing, is progression along horizontal lines from left to right, with successive horizontal lines read from top to bottom. The other directionality is progression along vertical lines from top to bottom, with successive vertical lines read from right to left. In Taiwan, Modern Standard Mandarin also is known as Guoyu.
Taiwan’s currency is the New Taiwan dollar.
Employers in Taiwan are responsible for withholding income taxes, social taxes, and health care contributions, and paying additional employer mandated social taxes and health care contributions. Employers are also responsible for upholding thelabor standards and practices required in Taiwan, including contributing to employee retirement plans and employee welfare funds.
Foreign workers in Taiwan generally are taxed on Taiwanese sourced income and are covered by the labor insurance and labor pension programs.
Taiwanese residents working in the United States are covered by U.S. tax law with work status exclusions applying. Work within the U.S. states and territories is covered by various labor laws.
News articles regarding payroll in Taiwan are available in
CURRENCY DETAILS
The currency of Taiwan is the New Taiwan dollar (NT$), also known as the Taiwanese dollar. While Taiwan’s currency usually is referred to as a dollar currency, it also is referred to as the Taiwan yuan. The internationally recognized three-letter currency code for the New Taiwan dollar is TWD. The plural form of New Taiwan dollar is New Taiwan dollars.
When an amount of New Taiwan dollars is written using the currency symbol NT$ or one of its variants (N.T.$, $NT, and $N.T.) to distinguish New Taiwan dollars from other dollar currencies, and when Taiwan documents use the general dollar currency symbol $ to refer to New Taiwan dollars, the symbol precedes the numerical value with no space between the numerical value and symbol.
When an amount of New Taiwan dollars is written using the currency symbol NTD, the symbol precedes the numerical value with a space, or less commonly no space, between the numerical value and symbol.
Amounts of New Taiwan dollars that are written in Standard Chinese often are written using the currency symbol , which also is the predominant currency symbol used to denote amounts of Chinese yuan as issued by the People’s Republic of China, but for denoting amounts of New Taiwan dollars in international contexts, the currency symbol NT$ is far more frequently used than the currency symbol . When an amount of New Taiwan dollars is written using the currency symbol , the symbol follows the numerical value with no space between the numerical value and symbol.
One hundredth ( 1 ⁄ 100 ) of a New Taiwan dollar is referred to as a cent, with the plural form of cents, although transactions involving Taiwanese currency do not typically include amounts other than whole numbers of New Taiwan dollars.
When amounts of New Taiwan dollars are written in Standard Chinese, the comma that in English separates the thousands place from the hundreds place generally is not rendered, with the numbers in the thousands place and hundreds place having no symbol or space between them and instead adjacent to each other, although in Taiwan the aforementioned comma sometimes is used instead of omitted for presentations of currency amounts otherwise communicated in Standard Chinese.
TAXES
The government of Taiwan enacts laws regarding income tax and social taxes.
The tax year for employment taxes is the calendar year, from Jan. 1 to Dec. 31.
Taiwan sometimes uses the Republic of China Calendar, also known as the Mínguó Calendar, in its official documentation, especially its Chinese-language documentation. A year of the calendar also is known as an Annum of the Republic, abbreviated as AR. The year of the Republic of China Calendar changes each Jan. 1, with AR 1, the first year of the Republic of China calendar, synonymous with 1912 of the international standard Gregorian Calendar.
Effective for 2021, the equivalent year in the Republic of China Calendar is AR 110. Effective for 2020, the equivalent year in the Republic of China Calendar was AR 109.
Coronavirus (Covid-19) Guidance: Income tax withholding deposit deadlines for May to July 2021 were extended if the person responsible for the deposit at a business is quarantining during the period in which the deposit is due. The May 10, 2021, deadline was extended to May 31, 2021; the June 10, 2021, deadline was extended to June 30, 2021; and the July 12, 2021, deadline was extended to Aug. 2, 2021.
Previously, Taiwan’s government provided tax relief for employers impacted by self-isolation or quarantine caused by the coronavirus by extending tax deadlines that fell in March to May 2020. The new deadline was the day after the isolation treatment ended.
Income Taxes
Income taxes are administered by the Taxation Administration, a subordinate agency to the Ministry of Finance.
Coverage: Employers generally must withhold income taxes from all employees. Employees generally are defined as public functionaries, teachers, military personnel, policemen, staff employees, and workers of public and private enterprises who receive income from salaries and wages for the performance of work.
Employees: Residents of Taiwan are taxed on their global income while nonresidents are taxed solely on their Taiwanese sourced income. Individuals are considered to be residents of Taiwan for tax purposes if they have a domicile in Taiwan and habitually reside in the territory of Taiwan, or reside in Taiwan for 183 days in a tax year. Expatriates who stay in Taiwan for less than 90 days in a calendar year are exempt from income taxes for income derived from a foreign employer.
Rates and Thresholds: Income tax rates are levied on a progressive scale, with rates ranging from 5% to 40%. In Taiwan’s progressive income tax system, portions of an individual’s income are allocated to Taiwan’s personal income tax brackets, and each portion of income allocated to a tax bracket is taxed at the tax rate applicable to that tax bracket. For each of Taiwan’s income tax brackets, the result of multiplying the amount of income in the bracket by the tax rate for that bracket is decreased by a progressive difference amount to determine the total tax due for that bracket.
Effective for 2021, unchanged from 2020, Taiwan’s personal income tax rates, minimum and maximum amounts of annual income for each tax bracket, and progressive difference amounts for each tax bracket are as follows:| Range of Annual Income (New Taiwan Dollars) | Income Tax Rate | Progressive Difference |
|---|---|---|
| Up to NT$540,000 | 5% | zero |
| More than NT$540,000 and up to NT$1,210,000 | 12% | NT$37,800 |
| More than NT$1,210,000 and up to NT$2,420,000 | 20% | NT$134,600 |
| More than NT$2,420,000 and up to NT$4,530,000 | 30% | NT$376,600 |
| More than NT$4,530,000 | 40% | NT$829,600 |
Tax residents of Taiwan may have an alternative minimum tax rate of 20% apply to their income if they had an annual amount of basic income that exceeded NT$6.7 million, claimed an investment tax credit, or had an add-back item counted as a tax-exempt amount.
With regard to income from employment, nonresidents are subject to an effective income tax withholding rate of 6% if their monthly income is below 1.5 times the minimum wage, or 18% if their annual income is above this amount.
Registration: Taiwan has what it calls a one-stop shop for all registration procedures to establish an employer in Taiwan.
Taxable Amounts: Employers must withhold income taxes on all income from salary, stipends, wages, allowances, annuities, cash awards, bonuses, and all kinds of subsidies, retirement pay, severance pay, separation pay, resignation pay, lifetime pensions, and old-age pensions not covered by insurance benefits.
Remuneration for travel expenses and overtime pay not in excess of the amounts prescribed by the Ministry of Finance are tax exempt.
Voluntary pension contributions and annuity insurance premiums up to 6% of an employee’s salary may be deducted from employee’s taxable income.
Withholding Methods: Employers may choose to either withhold the appropriate income tax according to the Ministry of Finance tax tables, or may withhold a flat rate of 5%. Employers should withhold the salaries of employees who are not paid monthly or who work part-time at 5%. In any case employees are responsible for paying their taxes outstanding and filing annual income tax returns.
Income from commissions should be withheld at a flat rate of 10%.
Withholding agents are not required to withhold taxes where the taxes to be withheld are equal NT$2,000 or less.
Employers must withhold salary from nonresidents at different rates as follows:
- For employees with less salaries less than 1.5 times the monthly the minimum wage, employer must withhold 6% of their salary;
- For employees with salaries greater than 1.5 times the monthly minimum wage, employers must withhold 18% of salary;
- Commissions must be withheld at 20% of payments.
Returns and Remittance: Employers must remit taxes along with a payment slip to the National Treasury within the first 10 days of the month following that in which salary was paid. Additionally, employers must file annual returns with the tax collection authority and issue all employees withholding certificates detailing the amounts withheld and remitted over the year by the last day of January of each year.
Employers of nonresident employees must make remittances within ten days of making salary payments and must issue withholding certificates to employees with ever remittance.
Employee Share Plans: Employee stock options offered to employees by Taiwanese companies should be reported in the employee’s individual income tax return in the year that employees exercise the stock option. The income is categorized as other income.
Employee stock options offered to employees by foreign companies is taxable in Taiwan for the days that the employee worked in Taiwan. In other words, the discount at exercise should be multiplied by the percentage of the days between the grant date and the vesting date that the employee was staying in Taiwan.
Recordkeeping: Employers must keep records of salaries, wages, travelling expenses, and other accounting documents for at least five years.
Penalties: Employers who fail to withhold income tax may be subject to a fine equal to the amount that was supposed to be withheld. If, after being notified of such, employers still fail to meet with their withholding obligation after the time limit given to them by the Taxation Administration, the fine may increase to up to three times the amount of tax that was supposed to be withheld.
Employers who fail to make annual returns on time may be subject to fines of up to 20% of the amount of tax withheld. However, this fine may not be less than NT$1,500 and may not be more than NT$20,000. Additionally, the fine will be reduced by 50% if employers file a late return on their own volition.
Employers who fail to remit income taxes withheld from employees on time may be subject to a fine of 1% of the amount of taxes outstanding every two days of delinquency.
Social Taxes
Social taxes in Taiwan consist of labor insurance, employment insurance, contributions to the Overdue Wages Payment Fund, and labor pension premiums, which are payable to and administered by the Bureau of Labor Insurance. Labor insurance provides employers and employees with maternity, injury, sickness, disability, old-age, and life insurance benefits. Employment insurance provides employees with unemployment benefits. Citizens that are not covered under labor insurance may participate under the farmer’s health insurance, government employee’s insurance, insurance of military personnel, or the National Pension.
Taiwan’s assessments to fund the National Health Insurance Program are covered in the Other Taxes section of this primer.
Coverage: Employers with at least five employees between the ages of 15 and 65 are responsible for paying labor insurance premiums and withholding labor insurance premiums from employees.
Employers must make employment insurance premium payments and withhold premiums for all Taiwanese employees between the ages of 15 and 65, except those receiving civil servant, teacher, and military personnel insurance, in addition to those who have already began receiving old age benefits. Chinese, Hong Kong, and Macau nationals who own a residence in Taiwan and are registered in Taiwan must also be covered by employment insurance. Other foreign workers are exempt from employment insurance premiums.
All employers are responsible for making contributions to the Overdue Wages Payment Fund under the Labor Standards Act. The fund is used to cover retirement pensions, severance pay, and employees affected by companies’ liquidation or bankruptcy.
Employers must pay labor pension premiums for all Taiwanese workers, foreign spouses, and mainland (Chinese, Hong Kong, and Macau) spouses of Taiwanese workers. This generally includes all Taiwanese employees except domestic helpers and household caretakers.
Employers with at least 200 employees may provide a private annuity insurance instead of contributing to the standard labor pension system. In order to adopt the annuity insurance, the labor union must consent, or, if no labor union exists, more than half of employees must consent.
Rates and Thresholds: Taiwan assesses contributions for labor insurance, employment insurance, the overdue wages payment fund, and the labor pension.
Labor Insurance and Employment Insurance: Labor Insurance premiums consist of two portions: ordinary insurance premiums and occupational accident insurance premiums.
The government of Taiwan sets a total rate for the ordinary insurance premium and a total rate for the employment insurance premium, and has designated that 70% of each of these total rates is payable by employers, 20% is payable by employees, and 10% is payable by the government. This 7-2-1 ratio is referred to by Taiwan’s Bureau of Labor Insurance as the premium sharing ratio.
Ordinary insurance premiums are to rise by 0.5 percentage points every two years until the ordinary insurance premium total rate reaches 12% in 2027.
Effective for 2021 and 2022, the ordinary insurance premium total rate is 10.5% of employee salary, consisting of an employer portion of 7.35%, an employee portion of 2.1%, and a government-funded portion of 1.05%. Effective for 2023 and 2024, the ordinary insurance premium total rate is 11% of employee salary, consisting of an employer portion of 7.7%, an employee portion of 2.2%, and a government-funded portion of 1.1%. Effective for 2025 and 2026, the ordinary insurance premium total rate is 11.5% of employee salary, consisting of an employer portion of 8.05%, an employee portion of 2.3%, and a government-funded portion of 1.15%. Effective starting with 2027, the ordinary insurance premium total rate is 12% of employee salary, consisting of an employer portion of 8.4%, an employee portion of 2.4%, and a government-funded portion of 1.2%. Effective for 2019 and 2020, the ordinary insurance premium total rate was 10% of employee salary, consisting of an employer portion of 7%, an employee portion of 2%, and a government-funded portion of 1%.
Occupational accident premiums are payable entirely by employers and determined based on two premium types: the On and Off Duty Accident Premium and the Business Category Accident Premium. The On and Off Duty Accident Premium is a flat rate, and the Business Category Accident Premium rates assessed on employers vary based on their business category and the evaluated risk posed to employees. Occupational accident premiums are generally adjusted every three years.
The On and Off Duty Accident Premium is 0.07% of each employee’s monthly salary.
Effective since Jan. 1, 2022, the rates of the Business Category Accident Premium range from 0.04% to 0.86% of each employee’s monthly salary. Effective from Jan. 1, 2019, to Dec. 31, 2021, the rates of the Business Category Accident Premium ranged from 0.04% to 0.89% of each employee’s monthly salary. Effective from Jan. 1, 2016, to Dec. 31, 2018, the rates of the Business Category Accident Premium ranged from 0.04% to 0.92% of each employee’s monthly salary.
The employment insurance premium total rate is 1% of employee salary, consisting of an employer portion of 0.7%, an employee portion of 0.2%, and a government-funded portion of 0.1%.
Labor insurance and employment insurance premiums are subject to a maximum monthly amount of employment income paid to an employee upon which they may be assessed. This maximum amount is known as the maximum monthly insurance salary. Labor insurance and employment insurance premiums also are subject to a minimum monthly tax base. If an employee’s compensation for a month was less than the minimum monthly tax base, the employee’s compensation for the month would be treated as having been the minimum monthly tax base for calculations of labor insurance and employment insurance premiums. The minimum monthly tax base is equivalent to Taiwan’s monthly minimum wage.
Effective for 2021, unchanged from 2020, the maximum monthly insurance salary for labor insurance and employment insurance premiums is NT$45,800.
Effective for 2021, the minimum monthly tax base for labor insurance and employment insurance premiums is NT$24,000. Effective for 2020, the minimum monthly tax base for labor insurance and employment insurance premiums was NT$23,800.
The total monthly labor insurance and employment insurance premiums that are due per employee are calculated by multiplying the applicable employer and employee rates by a monthly insurance salary that is determined based on the amount of employment income paid to the employee during the month for which the premiums were assessed. There are multiple monthly insurance salaries applicable to assessment of labor insurance and employment insurance premiums, with each monthly insurance salary associated with a range of monthly employment income paid to an employee. The monthly insurance salaries are indicated in Taiwan’s Table of Grades of Labor Insurance Salary, also known as the Table of Grades of Insurance Salary, released by Taiwan’s Bureau of Labor Insurance. Despite being labeled as a labor insurance salary table, this table also is applicable to employment insurance.
Effective for 2021, as per the 2021 Table of Grades of Labor Insurance Salary, there are 15 grades of salary for labor insurance and employment insurance premiums, with each grade associated with a range of total employment income paid to an employee during a month and a monthly insurance salary corresponding to that range. Effective for 2020, as per the 2020 Table of Grades of Labor Insurance Salary, there were 16 grades of salary for labor insurance and employment insurance premiums, with each grade associated with a range of total employment income paid to an employee during a month and a monthly insurance salary corresponding to that range.
Effective for 2021, for calculations of labor insurance and employment insurance premiums, the monthly insurance salary amounts and their associated ranges of total employment income paid to an employee during a month are as follows:| Grade Level | Range of Total Employment Income Paid to Employee (New Taiwan Dollars) | Monthly Insurance Salary (New Taiwan Dollars) |
|---|---|---|
| Grade 1 | Up to NT$24,000 | NT$24,000 |
| Grade 2 | More than NT$24,000 and up to NT$25,200 | NT$25,200 |
| Grade 3 | More than NT$25,200 and up to NT$26,400 | NT$26,400 |
| Grade 4 | More than NT$26,400 and up to NT$27,600 | NT$27,600 |
| Grade 5 | More than NT$27,600 and up to NT$28,800 | NT$28,800 |
| Grade 6 | More than NT$28,800 and up to NT$30,300 | NT$30,300 |
| Grade 7 | More than NT$30,300 and up to NT$31,800 | NT$31,800 |
| Grade 8 | More than NT$31,800 and up to NT$33,300 | NT$33,300 |
| Grade 9 | More than NT$33,300 and up to NT$34,800 | NT$34,800 |
| Grade 10 | More than NT$34,800 and up to NT$36,300 | NT$36,300 |
| Grade 11 | More than NT$36,300 and up to NT$38,200 | NT$38,200 |
| Grade 12 | More than NT$38,200 and up to NT$40,100 | NT$40,100 |
| Grade 13 | More than NT$40,100 and up to NT$42,000 | NT$42,000 |
| Grade 14 | More than NT$42,000 and up to NT$43,900 | NT$43,900 |
| Grade 15 | More than NT$43,900 | NT$45,800 |
| Grade Level | Range of Total Employment Income Paid to Employee (New Taiwan Dollars) | Monthly Insurance Salary (New Taiwan Dollars) |
|---|---|---|
| Grade 1 | Up to NT$23,800 | NT$23,800 |
| Grade 2 | More than NT$23,800 and up to NT$24,000 | NT$24,000 |
| Grade 3 | More than NT$24,000 and up to NT$25,200 | NT$25,200 |
| Grade 4 | More than NT$25,200 and up to NT$26,400 | NT$26,400 |
| Grade 5 | More than NT$26,400 and up to NT$27,600 | NT$27,600 |
| Grade 6 | More than NT$27,600 and up to NT$28,800 | NT$28,800 |
| Grade 7 | More than NT$28,800 and up to NT$30,300 | NT$30,300 |
| Grade 8 | More than NT$30,300 and up to NT$31,800 | NT$31,800 |
| Grade 9 | More than NT$31,800 and up to NT$33,300 | NT$33,300 |
| Grade 10 | More than NT$33,300 and up to NT$34,800 | NT$34,800 |
| Grade 11 | More than NT$34,800 and up to NT$36,300 | NT$36,300 |
| Grade 12 | More than NT$36,300 and up to NT$38,200 | NT$38,200 |
| Grade 13 | More than NT$38,200 and up to NT$40,100 | NT$40,100 |
| Grade 14 | More than NT$40,100 and up to NT$42,000 | NT$42,000 |
| Grade 15 | More than NT$42,000 and up to NT$43,900 | NT$43,900 |
| Grade 16 | More than NT$43,900 | NT$45,800 |
Overdue Wages Payment Fund: Employers are assessed on a monthly basis an Overdue Wages Payment Fund contribution rate of 0.025% of employees’ monthly salary.
Labor Pension: Mandatory labor pension contributions are payable entirely by employers, and employers on a monthly basis must provide a labor pension contribution of at least 6% of each employee’s monthly salary to the employee’s labor pension individual account. Employees may contribute up to 6% of their wages toward their labor pension individual account, and these contributions would be withheld from their salary.
Labor pension contributions are subject to a maximum monthly amount of employment income paid to an employee upon which they may be assessed. This maximum amount is known as the maximum monthly contribution wage. Pension insurance contributions also are subject to a minimum monthly tax base. If an employee’s compensation for a month was less than the minimum monthly tax base, the employee’s compensation for the month would be treated as having been the minimum monthly tax base for calculations of labor pension contributions.
Effective for 2021, unchanged from 2020, the maximum monthly contribution wage for labor pension contributions is NT$150,000.
Effective for 2021, unchanged from 2020, the minimum monthly tax base for labor pension contributions is NT$1,500.
The total labor pension contribution that employers are required to submit per employee is calculated by multiplying the required labor pension contribution rate of 6% by a monthly contribution wage for the labor pension based on the amount of employment income paid to the employee during the month for which the contribution was assessed. There are multiple monthly contribution wage amounts applicable to assessment of labor pension contributions, with each monthly contribution wage amount associated with a range of monthly employment income paid to an employee. The monthly contribution wage amounts are indicated in Taiwan’s Table of Monthly Contribution Wages of Labor Pension.
The 2021 Table of Monthly Contribution Wages of Labor Pension and the 2020 Table of Monthly Contribution Wages of Labor Pension both are available from Taiwan’s Bureau of Labor Insurance.
Effective for 2021, for calculations of labor pension contributions, the monthly contribution wage amounts and their associated ranges of total employment income paid to an employee during a month are as follows:| Grade Level | Range of Total Employment Income Paid to Employee (New Taiwan Dollars) | Monthly Contribution Wage (New Taiwan Dollars) |
|---|---|---|
| Grade 1 | Up to NT$1,500 | NT$1,500 |
| Grade 2 | More than NT$1,500 and up to NT$3,000 | NT$3,000 |
| Grade 3 | More than NT$3,000 and up to NT$4,500 | NT$4,500 |
| Grade 4 | More than NT$4,500 and up to NT$6,000 | NT$6,000 |
| Grade 5 | More than NT$6,000 and up to NT$7,500 | NT$7,500 |
| Grade 6 | More than NT$7,500 and up to NT$8,700 | NT$8,700 |
| Grade 7 | More than NT$8,700 and up to NT$9,900 | NT$9,900 |
| Grade 8 | More than NT$9,900 and up to NT$11,100 | NT$11,100 |
| Grade 9 | More than NT$11,100 and up to NT$12,540 | NT$12,540 |
| Grade 10 | More than NT$12,540 and up to NT$13,500 | NT$13,500 |
| Grade 11 | More than NT$13,500 and up to NT$15,840 | NT$15,840 |
| Grade 12 | More than NT$15,840 and up to NT$16,500 | NT$16,500 |
| Grade 13 | More than NT$16,500 and up to NT$17,280 | NT$17,280 |
| Grade 14 | More than NT$17,280 and up to NT$17,880 | NT$17,880 |
| Grade 15 | More than NT$17,880 and up to NT$19,047 | NT$19,047 |
| Grade 16 | More than NT$19,047 and up to NT$20,008 | NT$20,008 |
| Grade 17 | More than NT$20,008 and up to NT$21,009 | NT$21,009 |
| Grade 18 | More than NT$21,009 and up to NT$22,000 | NT$22,000 |
| Grade 19 | More than NT$22,000 and up to NT$23,100 | NT$23,100 |
| Grade 20 | More than NT$23,100 and up to NT$24,000 | NT$24,000 |
| Grade 21 | More than NT$24,000 and up to NT$25,200 | NT$25,200 |
| Grade 22 | More than NT$25,200 and up to NT$26,400 | NT$26,400 |
| Grade 23 | More than NT$26,400 and up to NT$27,600 | NT$27,600 |
| Grade 24 | More than NT$27,600 and up to NT$28,800 | NT$28,800 |
| Grade 25 | More than NT$28,800 and up to NT$30,300 | NT$30,300 |
| Grade 26 | More than NT$30,300 and up to NT$31,800 | NT$31,800 |
| Grade 27 | More than NT$31,800 and up to NT$33,300 | NT$33,300 |
| Grade 28 | More than NT$33,300 and up to NT$34,800 | NT$34,800 |
| Grade 29 | More than NT$34,800 and up to NT$36,300 | NT$36,300 |
| Grade 30 | More than NT$36,300 and up to NT$38,200 | NT$38,200 |
| Grade 31 | More than NT$38,200 and up to NT$40,100 | NT$40,100 |
| Grade 32 | More than NT$40,100 and up to NT$42,000 | NT$42,000 |
| Grade 33 | More than NT$42,000 and up to NT$43,900 | NT$43,900 |
| Grade 34 | More than NT$43,900 and up to NT$45,800 | NT$45,800 |
| Grade 35 | More than NT$45,800 and up to NT$48,200 | NT$48,200 |
| Grade 36 | More than NT$48,200 and up to NT$50,600 | NT$50,600 |
| Grade 37 | More than NT$50,600 and up to NT$53,000 | NT$53,000 |
| Grade 38 | More than NT$53,000 and up to NT$55,400 | NT$55,400 |
| Grade 39 | More than NT$55,400 and up to NT$57,800 | NT$57,800 |
| Grade 40 | More than NT$57,800 and up to NT$60,800 | NT$60,800 |
| Grade 41 | More than NT$60,800 and up to NT$63,800 | NT$63,800 |
| Grade 42 | More than NT$63,800 and up to NT$66,800 | NT$66,800 |
| Grade 43 | More than NT$66,800 and up to NT$69,800 | NT$69,800 |
| Grade 44 | More than NT$69,800 and up to NT$72,800 | NT$72,800 |
| Grade 45 | More than NT$72,800 and up to NT$76,500 | NT$76,500 |
| Grade 46 | More than NT$76,500 and up to NT$80,200 | NT$80,200 |
| Grade 47 | More than NT$80,200 and up to NT$83,900 | NT$83,900 |
| Grade 48 | More than NT$83,900 and up to NT$87,600 | NT$87,600 |
| Grade 49 | More than NT$87,600 and up to NT$92,100 | NT$92,100 |
| Grade 50 | More than NT$92,100 and up to NT$96,600 | NT$96,600 |
| Grade 51 | More than NT$96,600 and up to NT$101,100 | NT$101,100 |
| Grade 52 | More than NT$101,100 and up to NT$105,600 | NT$105,600 |
| Grade 53 | More than NT$105,600 and up to NT$110,100 | NT$110,100 |
| Grade 54 | More than NT$110,100 and up to NT$115,500 | NT$115,500 |
| Grade 55 | More than NT$115,500 and up to NT$120,900 | NT$120,900 |
| Grade 56 | More than NT$120,900 and up to NT$126,300 | NT$126,300 |
| Grade 57 | More than NT$126,300 and up to NT$131,700 | NT$131,700 |
| Grade 58 | More than NT$131,700 and up to NT$137,100 | NT$137,100 |
| Grade 59 | More than NT$137,100 and up to NT$142,500 | NT$142,500 |
| Grade 60 | More than NT$142,500 and up to NT$147,900 | NT$147,900 |
| Grade 61 | More than NT$147,900 | NT$150,000 |
Effective for 2020, the monthly contribution wage amounts and associated ranges of total employment income paid to an employee during a month were the same as those in effect for 2021, except the Grade 20 range of total employment income was from NT$23,100 to NT$23,800, the Grade 20 monthly contribution was NT$23,800, the Grade 21 range of total employment income was from NT$23,800 to NT$24,000, the Grade 21 monthly contribution was NT$24,000, and the ranges from Grades 21 to 61 were instead numbered Grades 22 to 62.
Registration: Upon hiring new employees, employers must submit copies of the front and back pages of the national identification cards for the new hires along with copies of their company registration, and other industry specific certificates.
Alternatively, employers may use Taiwan’s Company, Business and Limited Partnership One-Stop Service Request portal to complete their registration.
Within seven days of hiring or terminating an employee, employers must prepare a list of workers covered by labor pension and submit it to the Bureau of Labor Insurance.
Taxable Amounts: All social taxes are levied on all compensation which a worker receives for his/her work, including wages, salaries, premiums, allowances, whether payable in cash or in kind or computed on an hourly, daily, monthly, or piece-work basis and other regular payments under whatever name.
Employees may change their pension contributions up to twice a year. Upon being informed of a change, employers must file a contribution rate adjustment form and notify the Bureau of Labor Insurance prior to the end of the month during which the adjustment was made.
Returns and Remittance: Employers must submit wage books along with all labor and employment insurance contributions by the end of the month following the month in which wages were paid and withheld for labor insurance and employment insurance premiums.
For the payment of pension premiums, the Bureau of Labor Insurance mails employers a payment statement by the 25th of every month following the month in which salaries were paid. By the end of the next following month, employees must submit their payments, along with the payments withheld from employees, to the Bureau of Labor Insurance. Employers must provide their employees with a written statement with the amount of contributions made and deposited into their pension funds.
Employers must notify the Bureau of Labor Insurance by the end of August of any changes in their employees’ wages made between February and July of the same year. Employers must notify the Bureau of Labor Insurance by the end of February for changes in their employees’ wages between August and January.
Recordkeeping: Employers must maintain records of the number insured employees, working conditions and work records for at least five years.
Penalties: Employers are given a 15 day grace period for late insurance payments after which they may be subject to a penalty of 0.1% of insurance contributions due per day, up to a maximum of 20%.
Employers who fail to enroll their employees in the insurance funds may be subject to a fine of four times the contributions due from the date of hire of the employee until the employee is enrolled or terminated.
Employers who fail to pay insurance premiums for their employees may be subject to a fine of twice the premiums payable.
Employers who fail to insure workers against occupational accidents may be subject to a fine when their uninsured employees suffer from an occupational accident. Fines range from four to 10 times the premiums outstanding up to the point when the employee was injured.
Employers who fail to make labor pension payments on time may be subject to penalties of 3% of contributions outstanding per day.
Employers who fail to report the hire or termination of employees, or fail to provide the Bureau of Labor insurance with an updated list of employees for labor pension purposes are subject to a fine of at least NT$20,000. The fine is imposed on a monthly basis until employers rectify the situation.
Employers who fail to report changes in their employees’ wages may be subject to a fine of between NT$5,000 and NT$20,000.
Other Taxes
The National Health Insurance Program is Taiwan’s universal health care system that provides Taiwanese residents with health care coverage. The program is subsidized through premiums payable by employers and employees on a monthly basis to the National Health Insurance Administration, a division of the Ministry of Health and Welfare. Employer contributions are deductible from the employer’s income taxes.
Coverage: All employers generally must pay health insurance premiums and withhold employee health insurance premiums for all employees covered by the health insurance program. The National Health Insurance Program requires all employees who have established a registered domicile in Taiwan to register with the National Health Insurance Program and pay insurance premiums.
Rates and Threshold: There are two types of premiums for the National Health Insurance Program: the basic premium and the supplementary premium.
Basic Premium: The government of Taiwan sets a total rate for the national health insurance basic premium and has designated that for employees of private employers, 60% of the total rate is payable by employers, 30% is payable by employees, and 10% is payable by the government. This 6-3-1 ratio is referred to by Taiwan’s National Health Insurance Administration as the contribution ratio.
Effective since Jan. 1, 2021, the national health insurance basic premium total rate is 5.17%, consisting of an employer portion of 3.102%, an employee portion of 1.551%, and a government-funded portion of 0.517%. Effective until Dec. 31, 2020, the national health insurance basic premium total rate was 4.69% of employee salary, consisting of an employer portion of 2.814%, an employee portion of 1.407%, and a government-funded portion of 0.469%.
For each employee with dependents, the national health insurance premium the employee otherwise would pay must be multiplied by the number of the employee’s dependents plus one. The maximum multiple with regard to accounting for dependents factors in three dependents even if the actual number of the employee’s dependents is higher, causing the maximum multiple to be four (i.e., one plus three dependents). The employer and government premiums that otherwise would be paid must be multiplied by an average number of dependents plus one. Effective since Jan. 1, 2020, the average number of dependents is 0.58, and effective until Dec. 31, 2019, the average number of dependents was 0.61.
National health insurance basic premiums are subject to a maximum monthly amount of employment income paid to an employee upon which they may be assessed. This maximum amount is known as the maximum monthly salary basis. National health insurance basic premiums also are subject to a minimum monthly tax base. If an employee’s compensation for a month was less than the minimum monthly tax base, the employee’s compensation for the month would be treated as having been the minimum monthly tax base for calculations of national health insurance basic premiums. The minimum monthly tax base for national health insurance basic premiums is equivalent to Taiwan’s monthly minimum wage.
Effective for 2021, unchanged from 2020, the maximum monthly salary basis for national health insurance basic premiums is NT$182,000.
Effective for 2021, the minimum monthly tax base for national health insurance basic premiums is NT$24,000. Effective for 2020, the minimum monthly tax base for national health insurance basic premiums was NT$23,800.
The total monthly national health insurance basic premiums that are due per employee are calculated by multiplying the applicable employer and employee rates by a monthly salary basis that is determined based on the amount of employment income paid to the employee during the month for which the premiums were assessed. There are multiple monthly salary basis amounts applicable to assessment of national health insurance basic premiums, with each monthly salary basis amount associated with a range of monthly employment income paid to an employee.
Effective for 2021, for calculations of national health insurance basic premiums, the monthly salary basis amounts and their associated ranges of total employment income paid to an employee during a month are as follows:| Income Tier | Range of Total Employment Income Paid to Employee (New Taiwan Dollars) | Monthly Salary Basis (New Taiwan Dollars) |
|---|---|---|
| Tier 1 | Up to NT$24,000 | NT$24,000 |
| Tier 2 | More than NT$24,000 and up to NT$25,200 | NT$25,200 |
| Tier 3 | More than NT$25,200 and up to NT$26,400 | NT$26,400 |
| Tier 4 | More than NT$26,400 and up to NT$27,600 | NT$27,600 |
| Tier 5 | More than NT$27,600 and up to NT$28,800 | NT$28,800 |
| Tier 6 | More than NT$28,800 and up to NT$30,300 | NT$30,300 |
| Tier 7 | More than NT$30,300 and up to NT$31,800 | NT$31,800 |
| Tier 8 | More than NT$31,800 and up to NT$33,300 | NT$33,300 |
| Tier 9 | More than NT$33,300 and up to NT$34,800 | NT$34,800 |
| Tier 10 | More than NT$34,800 and up to NT$36,300 | NT$36,300 |
| Tier 11 | More than NT$36,300 and up to NT$38,200 | NT$38,200 |
| Tier 12 | More than NT$38,200 and up to NT$40,100 | NT$40,100 |
| Tier 13 | More than NT$40,100 and up to NT$42,000 | NT$42,000 |
| Tier 14 | More than NT$42,000 and up to NT$43,900 | NT$43,900 |
| Tier 15 | More than NT$43,900 and up to NT$45,800 | NT$45,800 |
| Tier 16 | More than NT$45,800 and up to NT$48,200 | NT$48,200 |
| Tier 17 | More than NT$48,200 and up to NT$50,600 | NT$50,600 |
| Tier 18 | More than NT$50,600 and up to NT$53,000 | NT$53,000 |
| Tier 19 | More than NT$53,000 and up to NT$55,400 | NT$55,400 |
| Tier 20 | More than NT$55,400 and up to NT$57,800 | NT$57,800 |
| Tier 21 | More than NT$57,800 and up to NT$60,800 | NT$60,800 |
| Tier 22 | More than NT$60,800 and up to NT$63,800 | NT$63,800 |
| Tier 23 | More than NT$63,800 and up to NT$66,800 | NT$66,800 |
| Tier 24 | More than NT$66,800 and up to NT$69,800 | NT$69,800 |
| Tier 25 | More than NT$69,800 and up to NT$72,800 | NT$72,800 |
| Tier 26 | More than NT$72,800 and up to NT$76,500 | NT$76,500 |
| Tier 27 | More than NT$76,500 and up to NT$80,200 | NT$80,200 |
| Tier 28 | More than NT$80,200 and up to NT$83,900 | NT$83,900 |
| Tier 29 | More than NT$83,900 and up to NT$87,600 | NT$87,600 |
| Tier 30 | More than NT$87,600 and up to NT$92,100 | NT$92,100 |
| Tier 31 | More than NT$92,100 and up to NT$96,600 | NT$96,600 |
| Tier 32 | More than NT$96,600 and up to NT$101,100 | NT$101,100 |
| Tier 33 | More than NT$101,100 and up to NT$105,600 | NT$105,600 |
| Tier 34 | More than NT$105,600 and up to NT$110,100 | NT$110,100 |
| Tier 35 | More than NT$110,100 and up to NT$115,500 | NT$115,500 |
| Tier 36 | More than NT$115,500 and up to NT$120,900 | NT$120,900 |
| Tier 37 | More than NT$120,900 and up to NT$126,300 | NT$126,300 |
| Tier 38 | More than NT$126,300 and up to NT$131,700 | NT$131,700 |
| Tier 39 | More than NT$131,700 and up to NT$137,100 | NT$137,100 |
| Tier 40 | More than NT$137,100 and up to NT$142,500 | NT$142,500 |
| Tier 41 | More than NT$142,500 and up to NT$147,900 | NT$147,900 |
| Tier 42 | More than NT$147,900 and up to NT$150,000 | NT$150,000 |
| Tier 43 | More than NT$150,000 and up to NT$156,400 | NT$156,400 |
| Tier 44 | More than NT$156,400 and up to NT$162,800 | NT$162,800 |
| Tier 45 | More than NT$162,800 and up to NT$169,200 | NT$169,200 |
| Tier 46 | More than NT$169,200 and up to NT$175,600 | NT$175,600 |
| Tier 47 | More than NT$175,600 | NT$182,000 |
Effective for 2020, the monthly salary basis amounts and associated ranges of total employment income paid to an employee during a month were the same as those in effect for 2021, except the Tier 1 range of total employment income was up to NT$23,800, the Tier 1 monthly salary basis was NT$23,800, the Tier 2 range of total employment income was from NT$23,800 to NT$24,000, the Tier 2 monthly salary basis was NT$24,000, and the ranges from Tiers 2 to 47 were instead numbered Tiers 3 to 48.
Supplementary Premium: Effective since Jan. 1, 2021, employees and employers are subject to a supplementary premium of 2.11% under conditions that differ between employees and employers. Effective until Dec. 31, 2020, the supplementary premium rate was 1.91%.
For each employee, the supplementary premium of 2.11% is assessed in addition to the basic premium on:
- the portion of any bonus paid to an employee during a month that is in excess of four times the employee’s monthly salary basis for national health insurance premiums for that month;
- fees from professional practices;
- income from part-time employment paid by employers other than that which enrolled the employee in National Health Insurance;
- stock and cash dividends paid to company shareholders;
- rental income; and
- income from interest earned on corporate bonds, financial bonds, government bonds, loans, savings accounts, and short-term bills.
For each employer, the supplementary premium of 2.11% is assessed each month on the difference between the total amount of employment income the employer paid to employees during that month and the total of each employee’s monthly salary basis for national health insurance basic premiums for that month.
Registration: Employers must register with the National Health Insurance Administration within three days of hiring employees who must be covered by the National Health Insurance Program. Employers must file a Group Insurance Application Establishment Report Form, a Beneficiary Coverage Application Form, a copy of the employers’ identification cards and company specific certificates.
Alternatively, Taiwan has a one-stop shop for all registration procedures to establish an employer in Taiwan.
Employers must file an Insurance Coverage Application Form with the National Health Insurance Administration within three days of hiring new employees.
Taxable Wages: Premiums generally are levied on salaries, stipends, wages, allowances, annuities, cash awards, bonuses and all kinds of subsidies, retirement pay, severance pay, separation pay, resignation pay, lifetime pensions, and old-age pensions not covered by insurance benefits.
Employers’ premiums are calculated based on the premium calculation tables available on the National Health Insurance Administration website.
Returns and Remittance: The National Health Insurance Administration will send employers premium calculation sheets by the end of every month for the month following the month in which salary was paid and withheld. Employers must pay their premiums according to the sheets directly to the National Health Insurance Administration by the end of the month following the month during which salary was paid and withheld. Employers can make payments to the National Health Insurance Administration online on Taiwan’s banking site, through a transfer payment, at an approved financial bank or through an ATM payment.
Recordkeeping: Employers must maintain an employee card for each employee and keep these cards for at least five years from the date the workers’ employment is terminated. The cards must contain information on the employee’s name, sex, date of birth, national identification number, address, dependents, dates of employment, position, working hours, salary and periods of leave without pay.
Penalties: Employers are given a 15 day grace period on late payments, following which they may be subject to a late fee of 0.1% of contributions outstanding for each day of delinquency. The maximum late fee is 15% of contributions outstanding.
Employers that declare employee salaries at less than their actual amount may be subject to a fine of two to four times the difference between the premiums due and the premiums paid.
Employers that fail to make payments and remittances may be subject to a fine equal to two to four times the amount payable to NHI.
Employers that fail to withhold supplementary premiums from employees may be subject to a fine of double the amounts they were obligated to withhold.
State/Jurisdiction Taxes
Taxes on employment income are not assessed by any of Taiwan’s counties, special municipalities, provincial cities, or local jurisdictions.
COMPENSATION AND BENEFITS
The Labor Standards Act generally applies to all workers in Taiwan except for domestic workers. The Act is administered by the Council of Labor Affairs.
The act requires employers to uphold minimum wage, overtime, hours of work, holidays, leave, wage payment, termination pay, and recordkeeping regulations. Additionally, employers generally are required to contribute to employees’ retirement plans and employee welfare funds. Labor insurance provides employers and employees coverage for occupational accidents and is covered under social taxes.
The Labor Standards Act is the fundamental labor law in Taiwan. First enacted in 1984, the act has been gradually expanded to cover almost all employees in the private sector, including workers in agriculture, construction, hotels, manufacturing, mass communications, mining, retail and wholesale industries and transportation.
Minimum Wage
Effective for 2022, Taiwan’s minimum wage is NT$25,250 per month or NT$168 per hour. Effective for 2021, Taiwan’s minimum wage was NT$24,000 per month or NT$160 per hour.
Taiwan’s Minimum Wage Review Committee annually releases a proposal, typically in August, regarding the monthly and hourly minimum wages that it recommends to take effect for the following year. The Ministry of Labor reviews the committee’s proposal, and generally in September or October finalizes the minimum wage amount for the following year.
Overtime
The first two hours of overtime work must be compensated at one-third ( 1 ⁄ 3 ) more than normal pay, while any additional overtime work must be compensated at two-thirds ( 2 ⁄ 3 ) more than normal pay. An employee who consents to working on a holiday is entitled to double wages. Employees may choose to receive compensatory leave in lieu of overtime pay.
Overtime work is limited to four hours a day and 54 hours each month, but not more than 138 hours over a three-month period.
Employers who wish to have female employees work overtime must have the labor union agree to the overtime provisions.
Companies with at least 30 employees are required to report adjustments to employees’ overtime hours to local authorities.
Hours of Work
The regular workday must not exceed eight hours and normal hours are limited to 40 hours per week. Employers must provide a 30 minute break for every four hours worked, and must provide every worker with two days of rest every seven days. The rest period of workers designated and publicly announced by the Central Authority may be further adjusted with the consent of a labor union, or if there is no labor union, with the approval of a labor-management conference.
Employers must provide breast-feeding employees with two additional 30-minute breaks.
Employers may not have female employees working between 10 p.m. and 6 a.m., unless otherwise stipulated in an agreement.
Holidays
Taiwan’s national government annually releases a calendar of its national holidays for which paid leave is required, with the dates and durations of some holidays for which paid leave is required subject to variation among years.
Employees who agree to work on a holiday for which paid leave generally would be required must be paid double their normal employment income for that day.
Taiwan’s 2021 National Holidays List and 2020 National Holidays List were released by Taiwan’s national government.
For some holidays, the government often requires employers and employees to operate according to adjusted schedules that are designed to increase the number of consecutive days of time off in connection with a holiday, with employees gaining a paid day off in exchange for being required to work on a Saturday. If one of the main days of the Founding Day of the Republic of China, Chinese New Year, Peace Memorial Day, Tomb-Sweeping Festival, Dragon Boat Festival, Mid-Autumn Festival, or National Day would be on Tuesday, the government generally requires employers to provide the immediately previous Monday as a day of paid leave and in exchange for paid leave on that Monday, employees are required to work on a Saturday designated by the government that is within one month, often within one week, of that Monday. If one of the main days of the aforementioned seven holidays would be on a Thursday, the government generally requires employers to provide the immediately following Friday as a day of paid leave and in exchange for paid leave on that Friday, employees are required to work on a Saturday designated by the government that is within one month, often within one week, of that Friday. Additionally, the government of Taiwan can choose, if Chinese New Year’s Eve would occur on a Friday, to also grant paid leave on the immediately previous Thursday and in exchange for paid leave on that Thursday, employees are required to work on a Saturday designated by the government that is within one month, often within one week, of that Thursday.
If a holiday with only one main day for which paid leave is required would occur on Saturday, paid leave for that holiday instead is required during the immediately previous Friday. If a holiday with only one main day for which paid leave is required would occur on Sunday, paid leave for that holiday instead is required during the immediately following Monday, or if Monday is a main day of another holiday then immediately after the main days of any holidays that week, and if this rescheduling causes paid leave for that holiday to occur on Thursday, the immediately following Friday would become a day of paid leave. If a holiday for which paid leave is required and that has multiple main days would include Saturday and Sunday of the same weekend, paid leave for that holiday instead is required either on the Friday before that weekend and Monday after that weekend, or during the rest of the week of that Sunday immediately after any other main days of a holiday that are not Saturday or Sunday.
The government designates in its National Holidays List the specific days of paid leave that must be provided when one main day of a holiday is on Saturday or Sunday or when two of a holiday’s main days are on Saturday and Sunday of the same weekend. If the three main days of the Chinese New Year would span from Tuesday to Thursday, the government typically selects either Monday or Friday of that week as an extra day of paid leave. If two of the main days of the Chinese New Year are on Saturday and Sunday, the government typically selects two nonweekend days either before or after the Saturday and Sunday that when combined with that Saturday and Sunday and the nonweekend day that also is a main Chinese New Year day cause there to be a span of five consecutive days of paid leave. If Children’s and Women’s Day and the Tomb-Sweeping Festival would overlap during a year, the government determines whether providing paid leave for that year’s overlapping date counts as paid leave for both holidays or if paid leave would need to be provided on a date in addition to the overlapping date.
If paid leave is designated for a Saturday or Sunday, the paid leave is applicable only to workers who normally would work on that day.
Taiwan’s public holidays for which paid leave is required are as follows:
- Jan. 1 (main day): Founding Day of the Republic of China. Paid leave for this holiday is required twice in 2021. Effective for 2021, as the main day of this holiday is a Friday, the government determined that paid leave is required in connection with the Founding Day of the Republic of China on Friday, Jan. 1, 2021. Effective for 2022, as the main day of this holiday is a Saturday, the government determined that paid leave is required in connection with the Founding Day of the Republic of China on Friday, Dec. 31, 2021. Effective for 2020, as the main day of this holiday was a Wednesday, the government determined that paid leave was required in connection with the Founding Day of the Republic of China on Wednesday, Jan. 1, 2020.
- Chinese New Year’s Eve (Lunar New Year’s Eve): Taiwan recognizes the last day of each year of the Chinese Calendar as a public holiday. Effective for 2021, as one of the main days of this holiday is a Thursday, the government determined that paid leave is required in connection with Chinese New Year’s Eve on Wednesday, Feb. 10, 2021, and Thursday, Feb. 11, 2021, and that in exchange for paid leave on Feb. 11, 2021, employees are required to work on Saturday, Feb. 20, 2021. Effective for 2020, as the main day of this holiday was a Friday, the government determined that paid leave was required in connection with Chinese New Year’s Eve on Thursday, Jan. 23, 2020, and Friday, Jan. 24, 2020, and that in exchange for paid leave on Jan. 23, 2020, employees were required to work on Saturday, Feb. 15, 2020.
- Chinese New Year (Lunar New Year, Spring Festival): Taiwan recognizes the first three days of each year of the Chinese Calendar as the main days of this public holiday. Effective for 2021, as the main days of this holiday include a Saturday and a Sunday, the government determined that paid leave is required in connection with the Chinese New Year on Friday, Feb. 12, 2021, Monday, Feb. 15, 2021, and Tuesday, Feb. 16, 2021. Effective for 2020, as the main days of this holiday spanned from Saturday to Monday, the government determined that paid leave was required in connection with the Chinese New Year from Saturday, Jan. 25, 2020, to Wednesday, Jan. 29, 2020.
- Feb. 28 (main day): Peace Memorial Day. Effective for 2021, as the main day of this holiday is a Sunday, the government determined that paid leave is required in connection with Peace Memorial Day on Monday, March 1, 2021. Effective for 2020, as the main day of this holiday was a Friday, the government determined that paid leave was required in connection with Peace Memorial Day on Friday, Feb. 28, 2020.
- April 4: Children’s and Women’s Day. Effective for 2021, as Children’s and Women’s Day occurs on the same day as the main day of the Tomb-Sweeping Festival and April 4 is a Sunday, the government determined that paid leave must be provided for Children’s and Women’s Day and for the Tomb-Sweeping Festival on Friday, April 2, 2020. Effective for 2020, as Children’s and Women’s Day occurs on the same day as the main day of the Tomb-Sweeping Festival and April 4 is a Saturday, the government determined that paid leave must be provided for Children’s and Women’s Day and for the Tomb-Sweeping Festival from Thursday, April 2, 2020, to Saturday, April 4, 2020.
- Tomb-Sweeping Festival (Tomb-Sweeping Day, Qingming Festival, Ching Ming Festival). This holiday is celebrated during a Gregorian Calendar year on the 15th day after the Vernal Equinox of that year, with the date of the Vernal Equinox considered for this holiday to vary based on the actual revolutions of the Earth around the Sun and not automatically considered to be one date. Effective for 2021, as the main day of this holiday is a Sunday and the 15th day after the 2021 Vernal Equinox is April 4, and as there is overlap between the Tomb-Sweeping Festival and Children’s and Women’s Day, the government determined that paid leave must be provided for the Tomb-Sweeping Festival and Children’s and Women’s Day on Monday, April 5, 2021. Effective for 2020, as the main day of this holiday was a Saturday and the 15th day after the 2020 Vernal Equinox is April 4, and as there was an overlap between the Tomb-Sweeping Festival and Children’s and Women’s Day, the government determined that paid leave must be provided for the Tomb-Sweeping Festival and Children’s and Women’s Day from Thursday, April 2, 2020, to Saturday, April 4, 2020.
- May 1: Labor Day. Effective for 2021, as Labor Day falls on a Saturday, the government determined that paid leave is required in connection with Labor Day on Friday, April 30, 2021. Effective for 2020, as Labor Day does not occur on a Saturday or Sunday, the government determined that paid leave was required in connection with Labor Day on Friday, May 1, 2020.
- Dragon Boat Festival (Double Fifth Festival, Duanwu Festival), with this holiday’s main day celebrated on the fifth day of the fifth month of the Chinese Calendar. Effective for 2021, as the main day of this holiday is a Monday, the government determined that paid leave is required in connection with the Dragon Boat Festival on Monday, June 14, 2021. Effective for 2020, as the main day of this holiday was a Thursday, the government determined that paid leave was required in connection with the Dragon Boat Festival on Thursday, June 25, 2020, and Friday, June 26, 2020, and that in exchange for paid leave on June 26, 2020, employees were required to work on Saturday, June 20, 2020.
- Mid-Autumn Festival (Reunion Festival, Moon Festival), with this holiday’s main day celebrated on the 15th day of the eighth month of the Chinese Calendar. Effective for 2021, as the main day of this holiday is a Tuesday, the government determined that paid leave is required in connection with the Mid-Autumn Festival on Monday, Sept. 20, 2021, and Tuesday, Sept. 21, 2021. Effective for 2020, as the main day of this holiday was a Thursday, the government determined that paid leave was required in connection with the Mid-Autumn Festival on Thursday, Oct. 1, 2020, and Friday, Oct. 2, 2020, and that in exchange for paid leave on Oct. 2, 2020, employees were required to work on Saturday, Sept. 26, 2020.
- Oct. 10 (main day): National Day (Double Tenth Day). Effective for 2021, as the main day of this holiday is a Sunday, the government determined that paid leave was required in connection with National Day on Monday, Oct. 11, 2021. Effective for 2020, as the main day of this holiday was a Saturday, the government determined that paid leave was required in connection with National Day on Friday, Oct. 9, 2020, and Saturday, Oct. 10, 2020.
Leave
Employers must provide employees with paid leave based on their years of service as follows:
- for more than six months but less than one year of service: three days of annual leave;
- for more than one but less than two years of service: seven days of annual leave;
- for more than two but less than three years of service: 10 days of annual leave;
- for more than three but less than five years of service: 14 days of annual leave;
- for more than five but less than 10 years of service: 15 days of annual leave; and
- for more than 10 years of service: 15 days of annual leave plus one day for every year of service after 10 years to a maximum of 30 days.
Employees may defer unused annual leave to the following year, but any unused annual leave at the end of the second year must be paid out.
Maternity leave: Employers must provide pregnant employees with eight weeks of paid maternity leave. Pregnant employees who miscarry are granted four weeks of paid maternity leave. The leave must be paid at full wages for employees who have worked more than six months for the same employer, and at half-wages for employees who have worked for less than six months.
Sick leave: Employers must provide with 30 days of sick leave per year paid at 50% of normal wages. Employees are entitled to additional monetary benefits from the Bureau of Labor Insurance. Additionally, employees may take additional unpaid leave after having exhausted their original 30 days of sick leave.
Wedding leave: Employers must grant employees who get married with eight days of paid leave.
Funeral leave: Employers must grant paid leave to employees with a death of a family member, although the exact provisions vary based on the relation to the employees in question. Employees who experience the death of a parent, foster-parent, step-parent or spouse are entitled to eight days of paid leave. Employees who experience the death of a grandparent, son, daughter, parent of a spouse, foster-parent, or step-parent of a spouse are entitled to six days of paid leave. Employees who experience the death of a great-grandparent, brother, sister or grandparent of a spouse are entitled to three days of paid leave.
Wage Payment
Employers generally must pay employees twice a month, but may pay them once a month if stipulated in an agreement.
Bonuses and Special Benefits
Taiwan does not mandate employers to provide one-off bonus payments to employees but other special benefits are required. It also is customary to provide employees with a bonus payment around Chinese New Year.
Profit Bonus: Employers who end the year with a profit must distribute a portion of the profits in the form of pay allowances or bonuses to employees who have worked the entire year without committing fault or misconduct.
Employers who are considered for-profit companies may deduct surplus earnings distributed in the form of bonuses or remuneration from their profit tax.
Retirement Plans: Employers generally must contribute to employees’ labor pensions, which is covered under Social Taxes, or annuity insurance. An annuity insurance is a private pension fund approved by the Bureau of Labor Insurance, where employers must serve as the insurance provider and employees must serve as the direct beneficiaries. Participating employers must purchase insurance from a single annuity insurance provider. In order to be eligible to participate in an annuity insurance employers generally must have 200 employees who have consented to participate in the annuity insurance.
Coverage: All employers generally must contribute to either labor pension or annuity insurance. Employers may offer employees the option of participating in annuity insurance if they employ at least 200 employees, have received either the consent of the labor union or the consent of over one half of their employees, over half of their employees opt to participate in the annuity insurance, and the Bureau of Labor Insurance approves of the annuity insurance scheme. Employers offering annuity insurance must also provide employees the option of participating in the government labor pension scheme as well. Employees who have not made an election are assumed to have elected the labor pension scheme.
Employers must begin to contribute to annuity insurance on an employee’s first day of employment.
Domestic workers; and foreign workers unless they are from China, Hong Kong or Macau and married to Taiwanese citizens, are not required to be covered by the annuity insurance scheme.
Rate: Employers must contribute the equivalent of at least 6% of their employee’s salary, while employees may choose to have a percentage of their salary withheld and invested in scheme.
Taxable Wages: Employer minimum contributions are based on all compensation which a worker receives for his/her work, including wages, salaries, premiums, allowances, whether payable in cash or in kind or computed on an hourly, daily, monthly, or piece-work basis and other regular payments under whatever name.
Employees may change their pension contributions up to twice a year. Upon being informed of a change, employers must file a contribution rate adjustment form and notify the Bureau of Labor Insurance prior to the end of the month during which the adjustment was made.
Registration: Employers are required to register themselves and their employees with the Bureau of Labor Insurance as they would for employees participating in the labor pension scheme.
In addition, employers are responsible for informing the Bureau of Labor Insurance within 15 days of when their employees change their pension election from the labor pension to the annuity insurance scheme, or vice versa. Employers must change their contributions to align with employee’s new selection by the first day of the following month.
Before purchasing an annuity insurance scheme from a single provider, employers must apply to the Bureau of Labor insurance for approval of the scheme.
Returns and Remittance: Employers must make contributions to annuity insurance providers at the end of each month. Insurance providers are responsible for reporting contributions to the Bureau of Labor Insurance. Other returns and remittance requirements are set by the individual annuity insurance providers.
Recordkeeping: Employers generally must keep annuity insurance records for at least five years.
Penalties: Employers who fail to make labor pension payments on time may be subject to penalties of three% of contributions outstanding per day.
Employers who fail to report the hire or termination of employees, or fail to provide the Bureau of Labor insurance with an updated list of employees for labor pension purposes are subject to a fine between NT$20,000 and NT$100,000. The fine is imposed on a monthly basis until employers rectify the situation.
Employers who fail to report changes in their employees’ wages may be subject to a fine between NT$5,000 and NT$20,000.
Employee Welfare Fund: Employers generally are required to establish a employee welfare fund and employee welfare committee jointly with their employees and labor union. Both employers and employees must contribute to the employee welfare fund. Employers must withhold 0.5% of employees monthly wages and contribute a percentage of their total amount of capital at the time of establishment, monthly revenues and proceeds from selling of scraps.
While the exact procedures of payment and reporting should be determined by the employee welfare committee, employers generally must submit a record of monthly salaries and fringe benefits of employees and workers to the employees’ welfare committee for examination and reference. Additionally, employees’ welfare funds shall be deposited in public or private banks.
Termination Pay
Employers may only terminate an employment contract with cause and must provide the employee with proper notice period and severance pay.
The mandatory notice period varies based on the length of service employees as follows:
- employed more than three months but not more than one year: 10 days of notice;
- employed more than one year but not more than three years: 20 days of notice;
- employed more than three years: 30 days of notice;
Employers may provide employees with the wages they would have earned over the notice period in lieu of the notice period. Additionally, employees may request a paid leave of absence of up to two days per week to search for work during the notice period.
In addition to providing notice, employers must provide employees with severance payments equal to half average monthly wage for each year of employment. Severance payments for work periods of less than a year should be paid at the same proportion. The total severance pay shall not exceed six average monthly wages.
Workers’ Compensation
Employers and employees are provided coverage for occupational accidents under the labor insurance scheme covered under social taxes.
Effective starting April 30, 2021, all employers are required to register employees for occupational accident insurance. Employees who are injured and unable to work may, after the fourth day of injury, receive wage replacement benefits equal to the employee’s average monthly wages for the first two months and 70% of the average monthly salary starting with the third month.
Employees also may receive permanent disability benefits. The amount of the payment is 70% of average monthly wages for employees who are completely disabled; 50% of average monthly wages for employees who are severely disabled; and 20% of average monthly wages for employees who are partially disabled.
Recordkeeping
Employers must prepare and maintain a worker record card, which indicates each employee’s name, sex, birth date, place of ancestral origin, educational background, address, national identification card number, employment starting date, wage, labor insurance starting date, merits and demerits, injuries, diseases and other significant facts for each worker. Worker record cards must be kept for at least five years after the date a particular workers ceases to be employed.
FOREIGN WORKERS
Foreign workers are entitled to the same rights as Taiwanese citizens and are generally covered by the same tax and workplace laws.
Visas: All foreign workers must obtain a work permit from the Council of Labor Affairs before engaging in work in Taiwan. Both employers and the foreign workers themselves may apply for the work permits. In order to apply, either employers or employees must submit the applicant’s CV, a copy of the applicant’s passport, a copy of the employee’s employment contract (although individuals who apply may not need to submit a contract if they are not applying to work with a specific employer), a health certificate, proof of education and proof of previous work experience to the Council of Labor Affairs.
After having obtained a work permit, foreign workers intending to live in Taiwan for more than 180 days generally must obtain an Alien Resident Certificate (ARC) or Alien Permanent Resident Certificate (APRC) from the National Immigration Agency within 15 days of arriving in Taiwan. Foreign workers who intend to live in Taiwan for 180 days or less may stay in Taiwan, so long as they hold a 14 day to 60 day visa or extension thereof, or if they are entering from a country with a visa-exemption, may stay in Taiwan for up to 30 days.
Additionally, foreign workers must undergo regular medical examinations with a facility approved by the Department of Health.
Taxes: Foreign workers are subject to income tax, labor insurance contributions, and health insurance contributions, but are exempt from employment insurance and labor pension premiums. Tax residents, generally those residing in Taiwan for 183 days or more in a year, and their employers generally are subject to the same income tax regulations as Taiwanese citizens. With regard to income from employment, nonresidents are subject to an effective income tax withholding rate of 6% if their monthly income is below 1.5 times the monthly minimum wage, or 18% if their annual income is above this amount.
Effective for 2021, 1.5 times the monthly minimum wage is NT$36,000. Effective for 2020, 1.5 times the monthly minimum wage was NT$35,700.
Payments made in connection to an employment contract may be excluded from the taxable income for foreign workers, such as payments for the round trip air fare of the foreign professional and family members, home leave vacation pay, moving expenses, utility bills, cleaning bills, telephone bills, house rentals, repair costs for place of residence, and educational scholarships for children. Certain foreign workers who engage in specialized or technical work or are directors of a foreign business are required to stay in Taiwan for at least 183 days in a tax year. These workers must be paid at least NT$1,200,000 annually in taxable salaries. If a worker stays in Taiwan for less than a year, the taxable salary must equal at least NT$1,200,000 when converted to an annual basis in proportion to how long the worker stays in Taiwan. The annual taxable salaries of these workers may be less than NT$1,200,000 when employed for special needs and approved as a special case by the Ministry of Finance.
All tax residents are required to file annual personal income tax returns between May 1 and May 31 of every year.
All foreign workers are subject to the same labor insurance and health insurance regulations that govern Taiwanese workers.
Withholding agents for nonresident individuals and nonresident companies without a fixed place of business in Taiwan must remit taxes withheld from wages within 10 days of when they were withheld. The day the taxes were withheld is counted as the first day.
Some skilled foreign workers who perform work in Taiwan and who are expected to be paid more than NT$3 million per year for each of their first three years of working in Taiwan may have half their income in excess of NT$3 million excluded from income taxation for each year among those first three years when they work in Taiwan for at least 183 days and are paid more than NT$3 million for their work in Taiwan. Foreign professionals who may be eligible for this preferential tax treatment include those skilled in arts, culture, economy, education, science, sports, or technology. Employees generally must possess an Employment Gold Card or work permit and must not have lived in Taiwan during the five years before the applicable three-year relief period to be eligible for the tax relief. Employers should communicate with the Taxation Administration before applying this preferential tax treatment to income tax withholding on an employee’s wages to determine whether the administration considers the employee to have sufficiently fulfilled the conditions for the preferential tax treatment.
Wages/Payments: Foreign workers are subject to the same wage payment requirements as Taiwanese workers. Employers may pay wages in foreign currencies.
WORKING IN THE UNITED STATES
Foreign workers from Taiwan must meet general visa requirements and be certified to be employed in the U.S. General visa requirements for the U.S. are included in the separate
Taiwan is eligible for the visa waiver program for business visitors, which allows Taiwanese citizens to travel to the U.S. for 90 days or less for business-specific purposes without having to obtain a B-1 business visa. Stays longer than 90 days will require a visa. Individuals may return to the U.S. under the visa waiver program if a “reasonable length of time” has passed. The determination for reasonable length of time is at the discretion of the Department of Homeland Security.
U.S. employers also must check the names of all new-hires and employees against the Specially Designated Nationals and Blocked Persons List, administered by the Treasury Department’s Office of Foreign Assets Control (OFAC). Because OFAC prohibits financial transactions with individuals on the list, employers cannot employ them and may face fines for failing to comply.
For tax purposes, Taiwanese citizens are subject to U.S. employment-based taxation on income earned in the U.S. unless they work under specific visa types that exempt earnings from taxes.
State and local taxation of Taiwanese workers also can apply.
The U.S. labor laws apply to all workers employed and providing services in the country.
Work eligibility as an employee is contingent upon Department of Homeland Security and Labor Department approval and the employee receiving a U.S. Social Security number from the Social Security Administration.
Tax Residency: In general, employees working in the U.S. on a temporary basis are considered nonresidents for tax purposes unless they qualify for resident status. Employees can be granted permanent resident status through the so-called green card test or if they meet the substantial presence test under the U.S. tax code. More information on these requirements is in the
Permanent residents are subject to U.S. tax requirements the same as U.S. citizens and are taxed under the U.S. system on their worldwide earnings.
Income Taxes: Generally, nonresidents in the U.S. who are from Taiwan and are working in the U.S. are subject to U.S. taxes based on their U.S.-sourced income. Income is taxed differently based on whether it is categorized as wage income or nonwage income, which includes interest and dividends.
A Form W-4, Employee’s Withholding Certificate, must be filed by each employee with their employer.
All nonresidents in the U.S. who are from Taiwan and are working in the U.S. must claim “single” in Step 1c, regardless of marital status; write “Nonresident Alien” or “NRA” in the space under Step 4c of the form; and may not claim “exempt” in the space under Step 4c.
Nonresident alien employees may adjust withholding using Step 2b or 2c of the Form W-4; certain employees also may be able to use Steps 3, 4a, or 4b. More information about Form W-4 requirements for nonresident alien employees is available in the
Although the versions of Form W-4 issued in 2020 or later significantly differ from the versions issued in 2019 or earlier, nonresident employees that filed a valid version of Form W-4 from 2019 or earlier with their employer do not need to file another Form W-4 with the employer unless they need to implement a change for their withholding. On Forms W-4 issued in 2019 or earlier, nonresident alien employees were required to check the “single” box on line 3, regardless of marital status; write “Nonresident Alien” or “NRA” above the dotted line on line 6; and were not permitted to claim “exempt” on line 7 of the form.
An additional amount is added to a nonresident alien employee’s wages for calculating federal income tax withholding, with the amount based on pay period frequency and the date of the employee’s most recently filed Form W-4. The table of additional amounts applicable to Forms W-4 from 2020 or later and the table applicable to Forms W-4 issued before 2020 are available in the
Nonwage income and self-employed foreign workers can be subject to income tax withholding at a flat rate of 30%.
Additionally, foreign workers may be taxed differently based on the specific type of visa they hold.
Tax treaties: Taiwan and the U.S. do not have a tax treaty for employment-related taxation.
Social Taxes: Most foreign workers are subject to paying into the U.S. Social Security system. Foreign nationals who are exempt from paying income tax and who do not have the eligibility to receive a social security number may not be required to pay social taxes. Foreign workers contributing to Social Security for a certain time period may be eligible to receive benefits.
Generally, foreign workers in the U.S. that have specific visas as exchange visitors or students or who are temporarily in the U.S. for agricultural work are not subject to social taxes on income that is obtained from the purpose in which they originally entered the U.S.
Totalization Agreements: Taiwan and the U.S. have not entered into a social tax totalization agreement.
Wage Payment: Under certain visas for certain types of employment, employers are required to pay foreign workers the higher of either the prevailing wage or the actual wage that is paid to U.S. workers that have similar skills and qualifications.
There are no particular requirements that employees be paid in U.S. dollars.
TREATY ARRANGEMENTS
Taiwan has entered into more than 30 income tax treaties, but has not entered into an income tax treaty with the United States. Taiwan does not have a totalization agreement with the United States for social tax coverage purposes.
The countries with which Taiwan has a bilateral income tax treaty in effect are Australia, Austria, Belgium, Canada, Denmark, France, Germany, Hungary, India, Indonesia, Israel, Italy, Japan, Kiribati, Luxembourg, Macedonia, Malaysia, Netherlands, New Zealand, Paraguay, Poland, Senegal, Singapore, Slovakia, South Africa, Swaziland, Sweden, Switzerland, Thailand, The Gambia, United Kingdom, and Vietnam.
Taiwan does not have any totalization agreements for social tax purposes in force.
RESOURCES
All resources in English unless otherwise noted.
General
U.S. State Department:
- U.S. Relations With Taiwan
- International Travel Information: Taiwan
U.S. Central Intelligence Agency:
- CIA World Factbook: Taiwan
- The World Factbook: Languages
U.S. Library of Congress:
- Guide to Law Online: Taiwan
- Global Legal Monitor: Taiwan
U.S. Department of Commerce: Export.gov: Taiwan - Market Overview
Taiwan Ministry of Education: Guidelines for Transliteration of Chinese
Currency Details
International Organization for Standardization: Currency Codes - ISO 4217
Unicode Consortium: Currency Symbols
United Nations: United Nations Terminology Database: Taiwan
Taxes
Taiwan Taxation Administration, Ministry of Finance
Taiwan Bureau of Labor Insurance
Taiwan National Health Insurance Administration
Taiwan Income Tax Act
Taiwan Labor Insurance Act
Taiwan Labor Pension Act
Taiwan National Health Insurance Act
2021 Covid-19 Tax Extensions (Chinese)
Compensation and Benefits
Taiwan Ministry of Labor (Chinese)
Taiwan Employee Welfare Fund Act
Enforcement Rules of the Employee Welfare Fund Act
Labor Occupational Accident Insurance and Protection Act (Chinese)
Foreign Workers
Taiwan National Immigration Agency, Ministry of the Interior
Taiwan Workforce Development Agency, Ministry of Labor
Bill No. 08180000 (2017) (Chinese)
Working in the United States
U.S. Department of Labor:
- Foreign Labor Certification
- Hiring Foreign Workers
U.S. Internal Revenue Service:
- IRS Notice 1392, Supplemental Form W-4 Instructions for Nonresident Aliens
- IRS Publication 15, Circular E, Employer’s Tax Guide
- IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities
- IRS Publication 519, U.S. Tax Guide for Aliens
- IRS Publication 901, U.S. Tax Treaties
U.S. Department of State: Visa Waiver Program
Treaty Arrangements