Table of Contents


Table of Contents


New Taiwan Dollar (TWD)

Payroll Frequency

Once every 15th day of the month

Employer Taxes


About Taiwan

Located in Southeast Asia, Taiwan (Republic of China or ROC) has a complicated political standing with China (People’s Republic of China or PRC), from whom it split around 1950. However, China has continued to claim sovereignty over Taiwan, denying its legitimate existence by refusing diplomatic relations with any country that recognizes the ROC. Taiwan started industrializing and developing its economy in the 1960s, resulting in a relatively large and advanced economy, focusing on the high-tech sector. It has healthcare, economic, and press freedom, as well as public education, making it one of the most highly educated citizenries in the world. Han Chinese constitute Taiwan’s largest ethnic group (divided into Hoklo and Hakka), while the rest of the population is made up of the indigenous Malayo-Polynesian peoples. Although Mandarin Chinese is their official language, other dialects such as Taiwanese and Hakka are also popular. Most Taiwanese are Buddhist (35.3%), followed by Taoists and Christians. Taiwan borrows and blends its culture from traditional Chinese, as well as Japanese and Western influences. Taiwanese entertainment culture has influenced film around the world, including via the works of famous Taiwanese director, Ang Lee.

Employment Relationship

• Permanent Employment

Taiwan's Labor Standards Act defines permanent employees as those who are employed for continuous work under a non-fixed term contract of employment. A contract for continuous (as opposed to temporary, seasonal, or specific work) must be a non-fixed term contract. Such contracts can be terminated by giving a notice to the other party. In the following situations, a fixed-term contract shall be deemed to be non-fixed term upon the expiration of the contract: Where an employer raises no immediate objection to an employee continuing their work. Where, despite the conclusion of a new contract, the prior contract and the new one together cover a period longer than 90 days, and the period of time between the expiration of the prior contract and conclusion of the new contract is not longer than 30 days. Employers should note that this exception does not apply in the case of a fixed-term contract for specific or seasonal work.

• Fixed-Term or Specific-Purpose Contracts

Taiwan's Labor Standards Act divides contracts into two categories: fixed-term contracts and non-fixed term contracts. A contract for work that is, by its nature, temporary, short-term, seasonal, or specific may be concluded as a fixed-term contract, but a contract for continuous work must be concluded as a non-fixed term contract. The Taiwanese Ministry of Labor defines temporary work and short-term work as work not exceeding 6 months. Per the Ministry, seasonal work must not exceed 9 months, and if specific work is to exceed 1 year, it should be reported to the competent authority for approval and recording. A fixed-term contract shall be deemed to be a non-fixed term contract upon its expiration where an employer does not immediately object when a worker continues their work. In the case of a specific fixed term contract for more than three years, a worker may, upon completion of three years' work, terminate the contract by giving the employer advance notice of 30 days.

• Temporary Employment Contratcs

Taiwan's labor law allows the use of fixed-term contracts for work that is temporary in nature. It defines temporary work as "work of an unexpected and non­continuous nature [that is not to] exceed 6 months." The term "temporary worker" is sometimes used to refer to the employees of labor dispatching agencies in Taiwan. Labor dispatching is when a labor dispatching agency dispatches its employee to a requesting business entity to provide labor services; the dispatched laborer is subjected to the command, supervision, and management of the requesting business entity. Labor dispatching agencies are employers of the workers they dispatch. These workers' wages, working hours, recesses, holidays, severance pay, and retirement benefits must be in accordance with the Labor Standards Act.

Probationary Period

Taiwan's labor law allows employers and employees to determine a period of probation based on the work's nature. The Labor Standards Act does not set a minimum or maximum probationary period, but employers are expected to operate in good faith.

Working Hours

Taiwan's labor law stipulates that regular working time may not exceed 8 hours a day or 40 hours a week. An employee must receive 2 regular days off every seven days. One of these days is considered regular leave (during which the employee can agree to work for overtime pay), and the other is a mandatory rest day (during which the employee may not agree to work). Employers must prepare and maintain employee attendance records for 5 years. The attendance records must record the attendance of employees daily and to the minute. Employers may not refuse when employees request duplicates or photocopies of the attendance records.

Holidays / PTO

• Statutory Holidays

Declared public holidays:Founding Day of Republic of China (January 1), Peace Memory Day (February 28), Revolutionary Martyrs’ Day (March 29), Labor Day (May 1), Confucius Birthday (September 28), National Independence Day (October 10), President Chiang Kai-Shek’s Birthday (October 31), Dr. Sun Yat-Sen’s Birthday (November 12), Constitution Day (December 25)Other holidays prescribed by the Ministry of Labor: The day after the Founding Day of Republic of China (January 2), Spring Festival on Lunar New Year (date may vary), Day before Ching Ming Festival (date may vary), May festival (date may vary), Moon festival (date may vary), New Year’s Eve of the Lunar calendar (date may vary), Taiwan’s Restoration Day (October 25)

• Paid Annual Leave

Under Taiwan's labor law, employees are granted paid annual leave according to the number of years during which they've been employed with the same employer, as follows: 3 days for service between 6 months and 1 year 7 days for service between 1 and 2 years 10 days for service between 2 and 3 years 14 days for service between 3 and 5 years 15 days for service between 5 and 10 years 1 additional day for each year of service over 10 years up to a maximum of 30 days Compensation must be paid for annual paid leaves not used by employees due to contract termination. Unused annual leave may be carried over into the next year according to employer and employee agreement. However, if the leave is still unused by the end of the second year, wages must be paid for whatever leave was not used by the employee. Alternatively, these wages may be paid upon the termination of the employee's contract. 

• Sick Leave

Taiwan's labor law provides medical leave for injury, sickness, or physical reasons to employees as follows: In the case of non-hospitalized conditions, the employee receives a total of 30 days in 1 year. In the case of employee hospitalization, the employee receives a leave not exceeding 1 year within 2 years. The sum of hospitalization and non-hospitalization sick leave should not exceed 1 year within 2 years. Where sick leave does not exceed 30 days in one year, 50% of the employee's salary must be paid during sick leave. If Labor Insurance payments do not reach 50% of the salary, the employer must make up the difference. If the injury or sickness is due to an occupational accident, the employer must compensate the employee for any necessary medical expenses. When an employee under medical treatment cannot work, the employer shall pay them compensation according to their pre-existing wage. 

• Maternity Leave

Taiwan's labor law entitles female employees to paid maternity leave of 8 weeks. Employees who have worked for more than 6 months are paid 100% of their regular salary during maternity leave, and employees who have worked for less than 6 months are paid 50% of their regular salary. During pregnancy, an employee can be transferred to less strenuous work. The employer must neither reject her application nor reduce her wages. From January 2022, employees are also entitled to 7 days' paid leave for prenatal checkups. Employers pay for 5 days' leave while employees can apply to the central government's competent authorities for the rest of the period. Employees who suffer a miscarriage after the first three months of pregnancy are granted a maternity leave of 4 weeks. In the case of a miscarriage after being pregnant for over 2 months and less than 3 months, the female employee shall be permitted to discontinue work and shall be granted a maternity leave for 1 week. In the case of a miscarriage after being pregnant for less than 2 months, the female employee shall be permitted to discontinue work and shall be granted a maternity leave for 5 days. Employees also receive social security benefits equivalent to their 60 days' salary and delivery expenses (equal to 30 days' salary). In case of multiple births, the benefits are increased proportionately. In case of miscarriage, the benefits are reduced by 50%.

• Paternity Leave

Taiwan's Act of Gender Equality in Employment grants 7 days' paid paternity leave to employees. Employers pay for 5 days' leave while employees can apply to the central government's competent authorities for the rest of the period. Either parent is also entitled to take unpaid parental leave not exceeding 2 years provided that the following conditions are met: The employee has at least 6 months of service with the employer. The child has not yet reached the age of 3 years. The employee's spouse is working.

Termination of Employment

• Notice Period

Employers must give advance notice to dismiss an employee as follows: When the employee has worked continuously for more than 3 months but less than 1 year, the notice period is 10 days. When the employee has worked continuously for more than 1 year but less than 3 years, the notice period is 20 days. When the employee has worked continuously for more than 3 years, the notice period is 30 days. Where an employer terminates the contract without serving an advance notice, they must pay the employee wages for the advance notice period. An employer can terminate a labor contract without advance notice for gross misconduct and violation of labor contract. 

• Severance Benefits

Taiwan's labor law mandates that an employer who terminates an employment contract generally needs to provide severance pay to the employee. Employees who leave their employer's service upon the expiration of a fixed-term contract are not eligible for severance. Employees dismissed for misconduct are not eligible for severance benefits. Severance pay for employees who began employment before 2005 is generally governed by the Labor Standards Act (LSA). Under the LSA, an employer who terminates an employment contract must provide a month's salary for each year of service as severance pay to the employee. For employees who have been employed for less than 1 year, severance must be calculated proportionally; any employment period less than a month shall be calculated as 1 month. Employers must issue severance pay within 30 days after the labor contract termination. Severance pay is governed by the Labor Pension Act (LPA) for employees who began employment after 2005. Under the LPA, severance pay is based on seniority, and employees are paid an amount equal to half a month of average wages for every full year of employment. For periods of employment lasting less than 1 full year, a proportional amount must be paid. The total severance payment cannot exceed 6 months of average wages. Severance pay calculated under the LPA must be paid within 30 days after the labor contract termination.