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China Global Payroll and Tax Information Guide

September 30, 2025 by digitalgowhere

September 30, 2025

China Global Payroll and Tax Information Guide

China remains the world’s largest and most dynamic labour market, attracting both multinational corporations and fast-growing SMEs. Payroll management here is far more than wage disbursement; it requires navigating complex labour laws, multi-tiered tax systems, and human resource practices that differ across provinces and industries.

In 2025, rising labour costs, stricter compliance requirements, and the growing use of digital technologies in finance and HR will make payroll management even more demanding, requiring businesses to balance regulatory precision with operational efficiency while respecting local workplace culture.

For companies establishing local entities or managing cross-border teams, accurate and compliant payroll is critical to efficiency, employee trust, and sustainable growth. This guide outlines the essentials of payroll in China, including updates on the minimum wage, employee benefits, tax compliance, cross-border payroll solutions, and the development of a resilient and scalable payroll framework.

Table Of Content

What Are the Core Components of Payroll in China?

China’s payroll system is built on numerous compulsory elements that all employers must handle with precision and timeliness to avoid non-compliance and to gain workers’ trust. They are not just statutory requirements; they form the pillar of fair and open employment policies.

Individual Income Tax (IIT)

Applied with progressive rates of taxation, income levels, deductibility, and exempt amounts are periodically revised by the authorities. Employers are required to correctly compute and deposit on time to avoid penalties and remain in compliance.

Mandatory Employer Contributions

Social insurance contributions for pension, unemployment, medical, maternity, and work-injury insurance. The schemes are designed to serve employee interests and are an integral part of China’s labour system.

Housing Fund

A compulsory saving plan contributed to by employers and employees in equal amounts, used for employees to purchase housing. Differing rates in various cities necessitate knowledge of local regulations.

Allowances and Bonuses

Transport allowances, meal allowances, and annual bonuses are standard, but must be disclosed as taxable income. The structuring of rewards must be done with care to ensure maximum staff satisfaction and tax efficiency.

Since each of these variables is regulated both nationally and provincially, payroll procedures must be tailored to the particular province or municipality in which its employees are located. For global employers operating in multiple jurisdictions, complexity is even more daunting, making a well-researched and locally compliant payroll strategy essential.

What Should You Know About Core Minimum Wage in China 2025?

China’s 2025 minimum wage remains region-based, with locally set rates that correspond to local living expenses and economic conditions. Tier-1 cities have the highest rates, and other towns continuously adjust their rates to remain competitive. Employers feel the effects of these payroll budget adjustments, overtime rates, and benefits planning—so regular monitoring is imperative for compliance and a strong employer reputation.

Category	Key Insight
Decentralised Wage Setting	China’s minimum wages are set locally—by province, city, or district—so that local living costs and economic conditions can be accommodated.
2025 Wage Range	The lowest monthly wages range from RMB 1,690 to RMB 2,690 (approximately USD 235–370), indicating significant regional disparities.
Most Regions Above RMB 2,000	By mid-2025, almost all the regions will have top-level minimum wages above RMB 2,000, suggesting a general increase in labour costs.
Lowest Wage Regions	Several areas made adjustments to their pay scales in the first half of 2025, demonstrating a proactive approach to balancing rewards with changing market circumstances.
Frequent Annual Adjustments	To employers, these variations have immediate effects on payroll budgets, overtime compensation, and talent management—rendering local regulatory knowledge critical.
Business Impact	For employers, these differences directly influence payroll budgets, overtime rates, and talent planning—making local compliance expertise essential.

Our quick guide on : Minimum Wage Trends in 2025 : A Comprehensive Global Overview

Employee Benefits Management in China: Key Insights for Employers

Employee benefits management in China is both a compliance necessity and a key talent retention strategy. Companies must strike a balance between the benefits of compliance and competitive advantages to attract and retain top talent.

1. Statutory Benefits:

China’s legal system requires inputs to:

Five Social Insurances – Pension, Medical, Unemployment, Work Injury, Maternity
Housing Provident Fund – For employees’ housing needs

Note: Regional contribution rates and calculation methods differ and are revised annually.

2. Extra Advantages:

Most employers exceed the law by providing:

Private health insurance
Transportation allowances
Subsidised meals
Regular health screenings.
Professional development programs

3. Best Practices for Employers:

Stay up to date with national and state laws
Integrate payroll systems to provide accurate and timely contributions.
Balance compliance with appeal by offering benefits that reflect market expectations

Why it matters:

A well-designed benefits strategy will enhance employees’ satisfaction, foster loyalty, and facilitate smooth operations—essential for both domestic and multinational corporations in China.

What Are the Key Rules for Employers on Tax in China?

Corporate Income Tax (CIT):

The standard rate is 25%.
Reduced rates are available for eligible High and New Technology Enterprises (HNTEs) and Small and Low-Profit Enterprises (SLPEs), typically at a rate of 15% or lower.
Qualification depends on strict adherence to and accurate reporting of standards.

Individual Income Tax (IIT):

Employers must calculate and withhold IIT on a monthly basis.
Tax rates range from 3% to 45% based on income.
Annual reconciliation is required for high earners.
The tax treatment for foreign employees is based on their residency status and the length of their stay.

Taxable Benefits:

Non-salary perks such as housing, education, and transport may be partially or fully taxable.
Certain expatriate benefits may be exempt if properly structured and supported with documentation.
Inaccurate reporting can result in fines and compliance risks.

Withholding Tax on Cross-Border Payments:

Royalties, dividends, and service payments to overseas entities are subject to withholding tax, typically ranging from 10% to 20%.
Tax treaty relief may be available if the correct documentation is submitted, including proof of tax residency.

Recordkeeping and Audits:

Employers must retain tax and payroll records for a minimum of 10 years.
All filings must be processed through China’s Golden Tax System.
Compliance includes maintaining Mandarin-language contracts and valid fapiaos.
Companies should be prepared for audits by local tax authorities.

Note: Maintaining full compliance with China’s tax laws is crucial for ensuring operational continuity, protecting reputation, and maintaining financial accuracy. Local expertise is highly recommended for effectively managing these obligations.

How Does Tax Compliance in China Affect Payroll Management?

Payroll and tax management in China demands coordinated oversight across regulatory compliance, cross-border payroll execution, and international tax planning. Each function carries distinct legal obligations and operational considerations. The table below outlines key focus areas businesses must address to ensure full compliance, maintain efficiency, and support sustainable growth in the Chinese market:

Compliance Focus	Tax Compliance	Cross-Border Payroll	International Tax Strategy
Regulatory Filings	Monthly IIT and statutory contributions must be filed accurately and on time	Salary payments in RMB and foreign currencies require adherence to foreign exchange controls	Entity type (WFOE, JV, Rep Office) determines tax obligations and reporting
Documentation Standards	Payroll records must be complete, traceable, and audit-ready	Documentation required for foreign staff exemptions and treaty benefits	Treaty applications demand residency proof and supporting documents
Tax Invoicing	Compliant fapiaos must be issued through the Golden Tax System	Applicable to reimbursement and benefits paid to cross-border staff	Withholding tax rates may be reduced through proper treaty use
Digital Integration	Adoption of e-fapiao enhances reporting efficiency but increases scrutiny	Digital payroll systems must handle multi-currency compliance	Integration with global systems supports transparency and consistency
Risk Exposure	Non-compliance may lead to fines, audits, and reputational harm	Double taxation risks affect both the employer and employees if not mitigated	Poor tax structuring increases cost and compliance burden
Optimisation Measures	Regular updates to payroll processes and reporting tools	Partnering with global payroll providers or local compliance firms ensures alignment	Tax incentives for R&D and high-tech entities reduce overall liability

Together, these functions form the backbone of a compliant and scalable payroll and tax framework in China. For multinational companies, success depends on maintaining accuracy at the local level while integrating these processes with global governance standards. Engaging trusted in-country advisors or regional payroll partners ensures continuity, reduces compliance risk, and enables confident expansion in one of Asia’s most regulated business environments.

How Do International HR Services and Employer of Record (EOR) Services Work in China?

International HR services, particularly Employer of Record (EOR) solutions in china, are becoming the go-to model for foreign businesses entering China without setting up a local entity.

An EOR legally employs staff on your behalf, handling:
Employment contracts compliant with Chinese labour laws.
Payroll processing, tax withholding, and social security payments.
HR administration, onboarding, and benefits management.

This model reduces entry barriers, speeds up hiring, and keeps you compliant without investing in a full legal presence.

What Are the Best Onboarding Solutions for Cross-Border Payroll in China?

Onboarding cross-border teams in China requires more than administrative setup—it sets the foundation for legal compliance, operational alignment, and long-term retention. For multinational companies, getting this right is critical to establishing credibility and building an integrated workforce.

1. Visa and Work Permit Processing

Securing the correct documentation for expatriates is the first non-negotiable step. Employers must ensure:

Visa applications are complete and submitted in line with regional immigration requirements
Work permits, especially Z-visas, match the employee’s job classification.
Renewals and residence registrations are managed without lapse.

Any delays or errors at this stage can result in non-compliance, delayed start dates, and reputational risk for the employer.

2. Compliance and Policy Induction

New employees must understand the regulatory framework from the outset. An effective compliance induction includes:

A clear overview of employment rights, entitlements, and contractual obligations
An explanation of payroll structure, including Individual Income Tax (IIT) and social insurance contributions
Familiarisation with internal HR policies, workplace systems, and reporting lines

Providing this clarity early improves transparency and reduces the likelihood of future disputes.

3. Cultural and Organisational Integration

For foreign hires, adjusting to local business practices can be challenging. To support cultural onboarding, employers should offer:

Guidance on workplace etiquette and communication norms
Insights into management styles and team dynamics
Basic language or key terminology support where needed

This reduces friction and enables faster integration into cross-functional teams.

4. Digital Onboarding Platforms

Digital solutions have become essential in managing distributed teams. A strong platform should provide:

Centralised access to documentation and digital signatures
Automated workflows for compliance tasks and induction modules
Built-in audit trails and regulatory checks

Well-designed digital systems improve consistency, reduce administrative workload, and ensure compliance across multiple jurisdictions.

For employers operating cross-border payroll in China, onboarding is not simply about filling forms—it is a strategic process that reinforces compliance, fosters inclusion, and lays the groundwork for effective operations. Companies that invest in structured, locally informed onboarding reduce attrition, earn employee trust, and strengthen their workforce from day one.

Conclusion

As China’s regulatory environment evolves, payroll has become a vital part of corporate governance rather than a simple back-office task. Beyond processing, companies must address minimum wage rules, taxation, employee benefits, and cross-border complexities.

Long-term success requires:

Regulatory alignment: Staying compliant with tax, social contributions, and regional wage laws.
Scalable systems: Using global payroll and digital HR platforms for accuracy and transparency.
Local expertise: Leveraging tailored HR and onboarding solutions for compliance and workforce integration.

Galaxy Payroll Group helps multinational businesses build future-ready payroll strategies through fully managed, compliant services. From international tax planning and employee onboarding to benefits and cross-border payroll, we ensure seamless operations throughout the APAC region.

Need Support Navigating Payroll in China?

Partner with Galaxy APAC for fully compliant, end-to-end payroll and tax solutions.

FAQ’S

What are the core payroll obligations for employers in China?

Employers in China must process employee salaries in compliance with local law, which includes accurate Individual Income Tax (IIT) withholding, mandatory contributions to social insurance and the housing fund, and adherence to regional payroll reporting standards.

How does minimum wage legislation vary across China?

Minimum wage rates in China are set at the provincial or municipal level and adjusted based on local cost-of-living benchmarks. Businesses must stay informed about these changes to ensure they maintain lawful compensation practices across multiple locations.

Are foreign employees in China required to contribute to local social insurance schemes?

In most cities, foreign nationals are subject to the same social insurance obligations as domestic employees. However, exemptions may apply if a bilateral agreement exists between China and the employee’s home country, and proper documentation is provided.

What are the risks of payroll non-compliance in China?

Failure to meet payroll or tax obligations can lead to administrative penalties, legal liabilities, delayed employee payments, and reputational damage. With increased regulatory scrutiny, accurate reporting and timely submissions are essential.

What should employers consider when onboarding cross-border hires in China?

Cross-border onboarding requires attention to immigration procedures, compliance briefings, cultural integration, and the use of secure digital platforms. A structured, locally informed approach ensures alignment with legal standards and supports long-term workforce integration.

11 Ways of Managing a Global Team Successfully

September 26, 2025 by digitalgowhere

September 26, 2025

11 Ways of Managing a Global Team Successfully

In today’s global economy, the workplace extends well beyond traditional boundaries. Organisations operate across time zones, legal systems, and cultures, enabling access to global talent while introducing complex managerial challenges. Leading cross-border teams requires more than conventional leadership; it calls for regulatory fluency, operational discipline, and cultural intelligence.

This article outlines eleven proven strategies for managing multinational teams, designed to enhance efficiency, promote cohesion, and unlock the full potential of a diverse, globally dispersed workforce.

Get our quick guide on: How Workforce Expansion Efficiencies Are Able to Help Companies Drive Business Growth

Table Of Content

The Strategic Importance of Workforce Management for Global Teams

Workforce management is a critical global business imperative that requires aligning people, processes, and policies across diverse countries, cultures, and regulatory frameworks. It goes far beyond administration, addressing complex issues such as labour law compliance, payroll, and benefits, while enabling organisations to achieve both operational excellence and regulatory certainty.

Employer of Record (EOR) solutions are central to this approach, allowing companies to manage cross-border teams without establishing local entities. By handling compliance, contracts, tax obligations, and administration, EORs reduce risk and free organisations to focus on strategic goals. At the same time, consistent policies and equitable treatment foster employee trust, strengthen retention, and enhance long-term organisational resilience.

Key Organisational Benefits of a Well-Managed Global Team

Effective management of a global team can be a game-changer for businesses. It means the ease of doing business, faster decision-making, and a sense of connectivity despite geographical distance. The staff is highly energised and motivated, which maximises connectivity and provides better outcomes.

An effective global team results in innovation, encourages innovative problem-solving, and enables organisations to react promptly to changing market trends. It fosters a strong and cohesive culture through team participation, positioning the business strategically for sustainable success and long-term growth.

11 Proven Approaches to Managing a Global Team with Employer of Record (EOR) Expertise

With the growth of companies across borders comes the management of a global labour force that necessitates more than operational management—it calls for precision in compliance, workforce agility, and cultural fit. EOR solutions offer exceptional value in facilitating cross-border hiring, reducing employment risk, and providing market access without the need to set up in-country entities.

Here are 11 proven strategies to manage global teams effectively, with EOR services acting as a strategic enabler for compliance, speed, and scalability:

1. Streamline Onboarding with EOR Expertise

Smooth onboarding is vital to employee engagement and productivity. With Employer of Record (EOR) services, businesses can:

Ensure compliant contracts, benefits enrolment, and statutory payroll are handled locally and accurately.
Accelerate new hire integration by removing delays caused by legal complexities or document errors.
Shift focus from administrative tasks to strategic talent development from day one.
Reinforce a professional, compliant image of your brand to international hires.

EOR services reduce risk during onboarding while enhancing employee confidence and clarity from the start.

2. Build a Global Communication Infrastructure

Managing a global team across time zones and cultures requires consistent, accessible communication.

Establish dedicated channels for daily operations, feedback loops, and cross-functional collaboration to facilitate seamless communication and effective teamwork.
Encourage asynchronous updates to accommodate regional working hours.
Regular communication builds transparency, accountability, and a shared understanding of priorities.

EOR providers can help facilitate internal messaging tailored to local cultures and employment expectations.

3. Align Global Teams Around Shared Goals and KPIs

Clear objectives and measurable KPIs are essential for maintaining alignment and accountability across global teams.

Define performance metrics that align with overall business strategy and regional priorities.
Track individual and team progress transparently through structured reporting systems.
Use collaborative tools to maintain visibility, streamline updates, and drive accountability.

This approach ensures every team member remains focused on outcomes that support sustainable global growth.

4. Prioritise Cultural Awareness and Local Inclusion

Cultural sensitivity fosters engagement and reduces the risk of miscommunication.

Respect local holidays, norms, and customs when scheduling and recognising events.
Build inclusive decision-making frameworks that elevate diverse perspectives.
Offer language flexibility, localised benefits, and regional leadership opportunities.

EOR services enhance localisation efforts by supporting region-specific HR practices without requiring legal setup in each country.

5. Build Trust in Remote and Hybrid Teams

In global environments where teams rarely meet in person, trust becomes a key driver of performance.

Recognise achievements across all levels with region-appropriate methods.
Foster psychological safety by encouraging open feedback and transparent updates.
Trust leads to faster decision-making, lower turnover, and stronger collaboration.

By ensuring seamless payroll, statutory compliance, and reliable employee support, EOR services reinforce trust at every touchpoint.

6. Select Integrated Digital Collaboration Tools

Digital tools bridge the operational gap between remote teams—if implemented thoughtfully.

Invest in platforms that support file-sharing, video conferencing, task management, and HR documentation.
Ensure tools integrate well with your existing HR and finance systems.
Regularly audit tool usage to improve adoption and eliminate inefficiencies.

Efficient workforce management depends on technology that enhances—not complicates—day-to-day collaboration.

7. Coordinate Time Zones and Workflows Intelligently

Without careful coordination, time zone differences can disrupt productivity.

Structure overlapping hours for cross-functional teams.
Use shared calendars and global scheduling tools to avoid missed connections.
Rotate meeting times to ensure fairness and maintain engagement.

EOR partners can help align local working hours and public holiday calendars with company-wide workflows.

8. Ensure Employer Compliance Across Jurisdictions

One of the most complex aspects of global employment is adhering to local employer compliance regulations.

Every country has its own rules for minimum wage, benefits, leave, termination, and taxation.
Non-compliance can result in financial penalties, damage to the brand, and employee dissatisfaction.
Employer of Record services act as the legal employer on your behalf—managing contracts, payroll, tax filings, and local obligations.

This eliminates the need to set up separate entities in each country while maintaining full compliance.

9. Recognise Talent and Tailor Motivation Strategies

Recognition builds loyalty and drives productivity when executed with precision.

Offer a mix of public acknowledgement, personalised feedback, and tangible incentives.
Tailor recognition programs to reflect cultural nuances and individual preferences.
Link career development to recognition to retain top talent in competitive markets.

Global reward systems can be easily aligned with EOR services, enabling accurate and timely administration across borders.

10. Lead with Empathy Backed by Operational Clarity

Empathetic leadership increases resilience, especially in multicultural teams.

Understand employee concerns around remote work, relocation, or family responsibilities.
Combine empathy with data-driven clarity to avoid ambiguity and inefficiency.
Document expectations clearly, provide regular feedback, and maintain accessibility.

EOR providers offer regional HR support, helping businesses address local issues with both compliance and care.

11. Adapt Processes to Evolving Workforce Needs

Global business environments shift quickly. Static processes rapidly become obsolete.

Conduct regular audits of your global team operations.
Use feedback loops to identify inefficiencies in talent onboarding, workflow design, or benefits delivery.
Be proactive in updating systems, tools, and policies in line with market conditions.

With the support of workforce management specialists and EOR services, your business remains agile and ready to scale.

Bonus Insight: Simplify Work Permit and Visa Services

Expanding internationally often requires hiring talent across borders, making work permit and visa services an essential part of your hiring toolkit.

EOR partners often assist with or advise on visa sponsorships, documentation, and legal pathways to employ foreign talent.
Avoid delays and costly errors by relying on compliant visa handling and employment structuring.
This enables companies to recruit the best talent—regardless of location—while adhering to legal limits.

conclusion

The global workforce management is more than a simple coordination function; it requires a comprehensive understanding of local laws, local cultural differences, and operational effectiveness. Companies need to adopt effective workforce management practices that safeguard against non-compliance, facilitate efficient onboarding, and support effective teamwork at the team level. When all these elements come together, companies can maintain flexibility, empower employees, and build consistent performance while managing operational risks.

Galaxy Group specialises in turning these complexities into opportunities. Through its Employer of Record (EOR) solutions, as well as handling payroll, compliance, work permits, visas, and other services, Galaxy helps enterprises gain quick and convenient access to foreign markets. With regional knowledge, easy solutions, and a tested platform, the company helps enterprises unleash the full potential of their multi-country employee population to achieve growth, productivity, and long-term profitability.

Expand Your Global Team with Confidence

Hiring overseas shouldn’t come with unnecessary complications. Our EOR solutions take care of local compliance, contracts, and payroll—so you can focus on building a strong, global team.

FAQ’S

What is an Employer of Record (EOR) and how can it help manage a global team?

An EOR handles contracts, payroll, benefits, and compliance, making it easy to hire and manage employees across countries.

How can companies stay compliant when hiring employees in multiple countries?

Local labour laws and taxes vary. An EOR ensures all legal requirements are met, reducing risk and complexity.

What are some practical ways to communicate across a global team?

Utilise regular check-ins, collaboration tools, and clear guidelines while respecting different time zones to maintain alignment.

How can organisations keep employees engaged and motivated in a remote or distributed team?

Recognise achievements, provide feedback, and foster inclusivity so employees feel valued and connected.

What challenges do companies face when managing a global team, and how can EOR services help?

Managing compliance, payroll, time zones, and cultural differences can be a significant challenge. EOR services simplify these tasks, letting teams focus on growth.

Guide to Payroll in Taiwan

September 15, 2025 by digitalgowhere

September 15, 2025

Guide to Payroll in Taiwan

For international companies operating in Taiwan, payroll is a critical intersection of compliance, culture, and employee trust. It goes far beyond salary processing, requiring strict adherence to labour laws, precise tax reporting, and timely social security contributions. Effective payroll management not only fulfils regulatory obligations but also strengthens organisational credibility and workforce engagement.

Taiwan’s strong economy, highly educated talent pool, and strategic position in Asia make it an appealing hub for expansion. Yet, navigating its payroll framework without local expertise risks compliance breaches, unexpected costs, and diminished employee morale. This guide examines the strategic role of payroll in Taiwan , highlighting key compliance requirements, wage benchmarks, remote work considerations, and how to select the right payroll partner for a scalable, legally sound framework.

Table Of Content

How Does Taiwan Payroll Strengthen Global Competitiveness?

Taiwan has evolved far beyond its reputation as a manufacturing powerhouse. Over the past decade, it has transformed into an innovation-driven economy with thriving technology, financial services, healthcare, and creative sectors. For businesses entering or expanding in Taiwan, managing payroll involves tasks that extend beyond administrative responsibilities. It plays a crucial role in keeping employees happy, staying compliant with the law, and supporting business growth.

When payroll is done well, it can give companies a competitive edge—making it easier to attract top talent, comply with regulations smoothly, and expand operations with confidence. Here’s why it matters:

1. Attracting and Retaining Top Talent

Professionals in Taiwan’s competitive industries, such as advanced engineering, R&D, and semiconductor manufacturing, demand more than just attractive compensation; they place a premium on timely, accurate, and consistent salary payments.
Efficient payroll systems demonstrate to employees that the company values their contributions and upholds high professional standards.
Prompt, error-free salary disbursements foster trust, improve morale, and help reduce employee turnover.
Transparent communication of pay and benefits—through clear payslips or user-friendly employee portals—enhances the employer brand.
This clarity can be a deciding factor when top candidates are evaluating multiple job offers.

2. Ensuring Full Compliance

Taxation, insurance, and pension contributions are all covered by Taiwan’s comprehensive and rigorously enforced labour laws.

Payroll administrators must:

Calculate, withhold, and remit personal income tax accurately each month.
Correctly contribute to labour insurance, health insurance, and pension funds.
Meet all statutory payment and filing deadlines.

Non-compliance risks financial penalties, back payments, and reputational harm, which can hinder recruitment and partnerships.

A robust and compliant payroll process demonstrates operational integrity—particularly vital in regulated sectors such as fintech and pharmaceuticals.

3. Enabling Rapid Market Scaling

Taiwan’s fast-moving market presents sudden opportunities—such as branch expansions, product launches, or seasonal demand spikes.

A flexible payroll framework enables companies to:

Onboard new employees quickly without overwhelming HR teams.
Adapt to shifting workforce needs, from permanent staff to contractors and remote workers.
Manage payroll efficiently across multiple locations within Taiwan.

What Are the Key Trends and Compliance Rules for the Remote Workforce in Taiwan?

Selecting the right payroll services in Taiwan can significantly strengthen business operations. Beyond saving time and minimising administrative errors, the right provider ensures compliance with evolving local regulations and delivers insights that reflect the realities of doing business in Taiwan. The most effective partners go beyond number-crunching to provide strategic value.

Here are some essential things to keep in mind when you’re looking for payroll partners:

Local Expertise

In-depth understanding of Taiwan’s complex and evolving labour and tax laws ensures compliance and avoids penalties.

Scalability

A partner that can adapt services as your workforce grows, maintains continuity and efficiency.

Technology Integration

Automation and seamless integration with HR/accounting systems reduce errors and streamline operations.

Multilingual & Regional Support

Providers with multilingual capabilities and regional experience help manage cross-border payroll and cultural nuances.

What Is the Average Salary in Taiwan?

Organisations seeking to recruit and retain quality employees in the competitive contemporary market need to understand the compensation scenario in Taiwan, including the average salary in Taiwan. It assists both employees and job seekers in forming realistic expectations about compensation, thereby fostering transparency and trust.

According to National Statistics, the Republic of China (Taiwan), official labour market data provides a credible benchmark for assessing current salary trends across industries, as shown in the following table.

Category	Amount (NTD)	Equivalent (USD)
Average Regular Earnings	NT$47,796	~$1,440
Average Total Earnings	NT$113,846	~$3,400
Median Monthly Salary	NT$113,846	~$1,140

These figures represent the overall earnings across industry and service sectors, including base salary, bonuses, and overtime pay.

Key Takeaways for Employers and Employees

Salary Range:

The gap between median and average salaries shows variation in earnings, highlighting the need for competitive pay structures.

Total Rewards Matter:

Bonuses and overtime significantly enhance overall income, making total compensation a vital factor in attracting and retaining talent.

Market Awareness:

Salary benchmarks help employees set realistic expectations and negotiate effectively.

Sector Variations:

Earnings differ by industry, with tech and finance generally offering higher pay than manufacturing or services.

Strategic Alignment:

For multinationals, matching local salary trends is essential for cost control and talent acquisition.

Compliance:

Following local salary standards ensures legal compliance and promotes fair employment practices.

What Is Minimum Wage in Taiwan, and What Does It Mean for Employers?

The minimum wage in Taiwan is regularly reviewed and adjusted by the government to reflect economic growth and shifts in the cost of living. These adjustments aim to provide fair compensation for workers while supporting sustainable business operations. Effective January 1, 2025, the minimum wage rates have been updated as follows:

Wage Type	Amount (NTD)	Equivalent (USD)
Monthly Minimum	NT$28,590	~$870
Hourly Minimum	NT$190	~$5.77

What Employers Should Keep in Mind

The upcoming changes to Taiwan’s minimum wage in 2025 have real implications for employers:

Staying Compliant

Updating payroll systems to reflect the new rates isn’t just a legal requirement—it shows employees and stakeholders that the company operates with integrity.

Managing Labour Costs

An increase in base wages can affect overall payroll expenses. Employers should revisit their budgets to ensure they can absorb the changes without putting pressure on other areas of the business.

Supporting Retention and Hiring

Fair, competitive pay isn’t just about meeting regulations—it’s a signal to current and future employees that they’re valued. That matters when building a loyal, motivated team.

Getting Payroll Right

Mistakes in wage calculations, especially with overtime or benefits, can quickly erode trust. Accuracy helps maintain confidence and smooth operations.

Planning Ahead

Understanding how wage changes impact the broader workforce enables leaders to make more informed, forward-looking decisions about compensation and hiring.

By proactively addressing these factors, employers can navigate minimum wage changes smoothly while supporting their business goals and employee well-being.

Basics of Employment Contracts in Taiwan

An employment contract in Taiwan is more than just a formality—it’s the foundation of a clear, legally compliant relationship between the employer and employee. Under Taiwanese labour laws, a written contract is strongly recommended for all employment arrangements, whether the role is full-time, part-time, or project-based.

A well-structured contract ensures that both parties understand their rights, responsibilities, and entitlements from the outset. For companies expanding or hiring in Taiwan, especially those engaging talent through cross-border arrangements, this clarity is critical in avoiding disputes, meeting compliance obligations, and building trust with local hires.

Key elements typically included in a Taiwan employment contract:

Job Title and Scope of Work – A precise description of the role and responsibilities, avoiding ambiguity.
Compensation and Benefits – Salary amount, payment schedule, bonuses, allowances, and any in-kind benefits.
Working Hours and Rest Days – Alignment with Taiwan’s Labour Standards Act, including overtime rules and public holidays.
Leave Entitlements – Annual leave, sick leave, parental leave, and other statutory entitlements.
Probation Period – Duration and conditions for confirmation of employment.
Termination and Notice Period – Legal grounds for ending the contract and the required notice for each party.
Confidentiality and Non-Compete Clauses – Protection of sensitive business information, especially for foreign-invested companies entering the Taiwan market.

Why it matters:
A well-drafted, compliant contract creates clarity, protects both parties, and supports long-term working relationships. It’s also an essential step in meeting Taiwan’s labour law requirements while maintaining a positive workplace culture.

How Payroll in Taiwan Works: Taxes, Social Security, and Processes

Payroll Element	What It Is	How It Works in Taiwan	Why It’s Important
Income Tax	Tax on what employees earn	Based on a progressive rate (5%–40%) depending on annual income. Employers deduct it from salaries each month and send it to the tax office.	Keeps the business compliant and avoids last-minute tax issues.
Labor Insurance	Safety net for workers	Covers workplace injuries, maternity, disability, and death benefits. The employer, employee, and government share contributions.	Helps employees stay protected during unexpected situations.
Employment Insurance	Support during unemployment	Provides temporary income and job search assistance to employees who lose their jobs.	Gives financial stability while finding new work.
National Health Insurance	Taiwan’s public healthcare system	All employees must be enrolled. Costs are split among the employer, the employee, and the government.	Ensures affordable medical care when needed.
Labor Pension	Retirement savings plan	Employers contribute at least 6% of an employee’s monthly salary into a personal pension account.	Builds a secure income for retirement.
Payroll Cycle	When salaries are paid	Usually, by the end of the month, this includes wages, overtime, and allowances.	Maintains consistent and predictable pay for employees.
Payslips	Salary breakdown	Must clearly show wages, deductions, contributions, and taxes.	Creates transparency and avoids confusion.
Year-End Bonus	Extra pay during Lunar New Year	Many employers give a bonus equal to around one month’s salary.	Motivates staff and matches local workplace traditions.

Key Considerations When Choosing a Payroll Partner in Taiwan

Finding the right payroll partner in Taiwan isn’t just about getting payslips out on time; it’s about ensuring accurate and timely payroll processing. It’s about having someone who understands the rules, protects your data, and keeps things running smoothly so your team gets paid correctly and on schedule—without the headaches.

What to Check	What It Means in Practice	Why It Helps
✔ Knows Local Laws	Understands Taiwan’s tax rules, labour insurance, and health insurance — and stays updated when laws change.	Keeps payroll compliant and avoids costly mistakes.
✔ Gets It Right, Every Time	Processes salaries accurately and pays on time.	Builds trust with employees and maintains high morale.
✔ Keeps Data Safe	Uses secure systems and maintains strict confidentiality.	Protects sensitive salary and personal information.
✔ Works Well with HR	Can connect payroll to hiring, onboarding, and benefits systems.	Reduces administrative work and eliminates duplicate data entry.
✔ Grows with You	Can handle payroll, whether you’re adding five people or fifty.	Makes scaling up (or down) hassle-free.
✔ Clear on Costs	Offers straightforward, transparent pricing with no surprises.	Helps with budgeting and cost planning.
✔ Understands the Local Culture	Speaks the language, knows local customs, and can provide quick support.	Makes communication smoother and problem-solving faster.

Conclusion: Building a Scalable and Compliant Payroll Strategy in Taiwan

A well-managed Payroll in Taiwan is the foundation for business success. From setting competitive salaries based on the average salary in Taiwan to ensuring compliance with the minimum wage in Taiwan, from drafting airtight employment contracts to managing a geographically dispersed remote workforce, every detail matters.

Partnering with an expert like Galaxy Group gives businesses peace of mind. With our tailored payroll services in Taiwan, we handle compliance, efficiency, and scalability, allowing you to focus on growth.

Starting in Taiwan or growing an existing business here means investing in a payroll strategy that is flexible and compliant, something that helps protect the company, keeps employees happy, and sets the stage for lasting success.

Stay Compliant with Taiwan’s Payroll Regulations

Engage trusted experts to handle payroll, wage updates, and compliance in Taiwan and ensure seamless operations in 2025.

FAQ’S

What is the minimum wage in Taiwan?

The monthly minimum wage in Taiwan is NT$27,470, with an hourly rate of NT$183, as of 2025.

What is the average salary in Taiwan?

On average, salaries in Taiwan range from NT$40,000 to NT$60,000 per month, depending on the industry and experience level.

Are written employment contracts mandatory in Taiwan?

Yes. Employers must provide a written contract detailing job terms, wages, and benefits to ensure compliance and clarity.

How often is payroll processed in Taiwan?

Most companies pay salaries monthly, but pay frequency can vary based on the employment contract.

Can foreign companies hire remote workers in Taiwan?

Yes. Businesses can hire remote talent in Taiwan, but must comply with local labour laws, payroll, and tax regulations.

From an EOR Service to a Single Global Payroll Provider?

August 29, 2025 by digitalgowhere

August 29, 2025

From an EOR Service to a Single Global Payroll Provider?

As companies expand globally, payroll solutions must also evolve to support sophisticated operations. Employers of Record (EORs) offer a practical solution for rapid market access, eliminating the need to establish local legal structures, simplifying hiring, reducing compliance requirements, and streamlining operations with minimal infrastructure.

However, as teams become more geographically dispersed, the EOR model can become restrictive. Each new hire incurs additional costs, reporting varies by country, and managing multiple suppliers can result in siloed processes and reduced visibility into compliance.

The transition to a global payroll provider provides a centralised and integrated approach. The transition gives more control, standardised reporting, and improved compliance, thereby aligning payroll management with more organisational objectives and long-term growth strategies.

This blog explores the distinctions between EORs and global payroll providers and highlights the advantages of payroll consolidation.

Table Of Content

What’s the Difference Between an EOR and a Global Payroll Provider?

When hiring across borders, companies often choose between two models:

EOR or Global Payroll Provider. Both offer support for managing international teams, but they solve different challenges. An EOR steps in as the legal employer on behalf of a business. It handles everything from employment contracts and payroll to local compliance and statutory benefits. This makes it easier to hire in new markets without setting up a regional entity. It’s a practical option for companies looking to test new regions or hire just a few employees in unfamiliar jurisdictions.

A Global Payroll Provider On the other hand, supports businesses that already have entities in place. They help streamline payroll processing across multiple countries by managing calculations, deductions, local filings, and employee payments, while also offering consolidated reporting. The business remains with the legal employer, but the payroll burden is centralised and simplified.

Here’s a quick comparison:

Aspect	Employer of Record (EOR)	Global Payroll Provider
Legal Employer	The EOR becomes the legal employer and takes on local employment responsibilities.	The company remains the legal employer and oversees employment obligations directly.
Local Entity Requirement	No local entity is needed; the EOR covers this on behalf of the company.	A local entity must be established in each country where employees are hired.
Ideal Use Case	Helpful in entering new markets, short-term projects, or hiring a small number of employees.	Better suited for businesses with a long-term presence and larger teams in multiple regions.
Payroll Management	Fully managed by the EOR, including payslips, tax filings, and employee payments.	Managed by the company with support from the provider for calculations and compliance.
Compliance Handling	The EOR takes care of most legal and regulatory responsibilities.	Compliance is shared, and the company must stay aligned with local regulations.

The choice between an EOR and a global payroll solution typically depends on the stage of international expansion. EORs provide speed and agility for entering new markets, while global payroll systems support scalability, consistency, and operational control over the long term.

When is an EOR the Right Choice for Global Hiring?

An EOR serves as a strategic solution for companies expanding internationally without setting up legal entities in each country. The following situations highlight when partnering with an EOR can be the most effective approach to global hiring:

1. Entering a new international market

For organisations exploring new markets, establishing a legal presence can delay go-to-market timelines. An EOR enables quick hiring of local talent while maintaining full compliance with local employment laws, making it ideal for pilot programs or market testing.

2. Avoiding the Cost and Complexity of Entity Setup

Setting up a legal entity in a new country often involves considerable time, cost, and an in-depth understanding of local rules. For companies seeking to hire internationally without making a long-term investment upfront, an EOR provides a practical alternative. It takes care of employment contracts, payroll, taxes, and benefits on the company’s behalf.

3. Supporting Small Teams in Multiple Countries

When building distributed teams with only one or two employees in each location, entity creation becomes inefficient. An EOR offers a practical, centralised solution for managing employment across several jurisdictions, reducing both administrative and compliance overhead.

4. Hiring for Short-Term or Project-Based Roles

For short-term staffing requirements, like seasonal employees, consultants, or project specialists, EORs offer versatile support. They handle onboarding, hire-to-retire, and offboarding in accordance with local laws, enabling companies to scale teams up or down to meet the project’s changing requirements.

5. Navigating Periods of Organisational Change

During mergers, acquisitions, or internal restructures, maintaining continuity in workforce management can be challenging. EORs can provide stable employment arrangements during transitions, ensuring that teams remain operational while legal structures are still being finalised.

6. Reducing Risk in Employment Compliance

Global hiring requires adherence to country-specific laws regarding wages, benefits, taxes, and social contributions. An EOR takes on the legal responsibility of employing staff, helping organisations remain compliant with local regulations while streamlining HR and finance operations.

An EOR is particularly effective for organisations seeking speed, flexibility, and compliance in global hiring. It acts as a bridge to new markets and ensures legal peace of mind, whether for short-term projects or the early stages of international expansion.

What can a Global Payroll Provider Offer?

Managing payroll becomes increasingly complex as businesses expand into new markets. A global payroll provider can simplify the process by offering local expertise, ensuring compliance, and delivering scalable systems that support international growth.

Understanding Local Rules

1. Stays up-to-date with changing tax laws, labour regulations, and reporting standards in each country.

2. Ensures payslips, deductions, and filings are done correctly in line with local legislation.

3. Helps avoid fines and compliance risks by handling statutory requirements accurately.

A Single, Centralised System

1. Combines payroll processes across countries into one streamlined platform.

2. Offers better visibility and control over payroll operations in different regions.

3. Reduces the need to coordinate with multiple local vendors or systems.

Hassle-Free Payments in Local Currencies

1. Supports on-time salary disbursement in multiple currencies.

2. Manages currency conversions, local banking rules, and payment timelines.

3. Minimises errors in cross-border payments and ensures a reliable employee experience.

Room to Grow

1. Scales easily as the business enters new markets or hires across regions.

2. Reduces the need for internal payroll expansion or new country-specific processes.

3. Allows companies to focus on growth without worrying about backend payroll operations.

Keeping Data Safe

1. Uses secure platforms that follow global data protection laws like GDPR.

2. Safeguards sensitive employee information with encryption and access controls.

3. Reduces the risk of data breaches or non-compliance in global jurisdictions.

Managing More Than Just Payroll

1. Offers additional services such as statutory benefits administration, social insurance management, and leave tracking.

2. Helps standardise HR practices across different countries.

3. Reduces administrative load on internal teams while improving employee satisfaction.

How to Know When It’s Time to Move Beyond an EOR?

Working with an EOR can be an innovative and flexible way to hire internationally, especially when entering new markets or managing short-term projects. But as operations grow, there may come a time when a more permanent setup makes sense.

1. Team Building:

Expansion of local teams may be less feasible for EORs; an integrated legal entity provides complete control over HR activities.

2. Long-Term Strategy:

Creating a legal entity involves commitment and renders long-term regional development feasible.

3. Operational Integration:

Direct hiring facilitates better integration with in-house teams, policies, and workflows.

4. Cost Savings:

Scaling up quickly under an EOR may be costly; a local organisation can be more economical.

5. Regulatory Compliance:

Specific industries or sectors require a legal entity to fulfil licensing, contractual, or regulatory requirements.

Benefits of Using a Global Payroll System Across Countries

Managing payroll across multiple jurisdictions can quickly become complex. Implementing a single global payroll system creates a centralised and consistent approach. It helps businesses stay compliant, streamline operations, and support international growth with confidence.

Brings Consistency to Payroll Operations

1. Ensures uniform payroll schedules, formats, and documentation across regions

2. Minimises the risk of payment delays and calculation discrepancies

3. Supports a consistent employee experience, regardless of location

Offers Better Visibility and Control

1. Provides a centralised view of payroll data across all operating countries

2. Facilitates budget planning, workforce tracking, and risk management

3. Supports leadership with accurate, real-time financial insights

Simplifies Compliance with Local Laws

1. Tracks changes in tax legislation, labour codes, and statutory contributions

2. Reduces exposure to non-compliance penalties and legal complications

3. Makes audit preparation and statutory reporting more efficient

Streamlines Daily Operations

1. Decreases reliance on manual processes and fragmented systems

2. Reduces administrative load for HR, finance, and payroll teams

3. Enhances process efficiency through automation and system integration

Scales with Business Growth

1. Supports onboarding in new markets without needing separate systems

2. Enables faster geographic expansion while maintaining payroll integrity

3. Consolidates provider management through a single global platform

6-Point Checklist Before Switching from an EOR to Global Payroll

Transitioning from an EOR (Employer of Record) to a global payroll provider represents a transition from short-term market entry strategies to repeatable, cross-border operations. Upfront assessment of the key areas guarantees compliance, operational efficiency, and long-term value.

Here’s a 6-point checklist to guide the decision:

Checklist Point	Key Actions
Readiness of the Local Entity	✅ Ensure the business is officially registered in each operating country. ✅ Set up local bank accounts, tax registrations, and employment systems. ✅ Confirm the entity can independently manage payroll, hiring, and compliance.
Understanding of Local Payroll Requirements	✅ Learn local tax brackets, wage laws, and statutory benefits. ✅ Align payroll cycles with local deadlines to avoid penalties. ✅ Verify worker classifications to prevent legal issues.
Suitability of Internal Systems	✅ Evaluate if HR and finance tools support multi-country payroll. ✅ Check adaptability to varied pay structures and compliance rules. ✅ Ensure adherence to data privacy regulations in all locations.
Compliance and Documentation Requirements	✅ Implement internal compliance checks for audits and inspections. ✅ Keep contracts, payslips, and payroll records secure and organised. ✅ Understand local reporting formats and submission timelines.
Selection of a Global Payroll Provider	✅ Choose a provider with expertise in target markets. ✅ Ensure capability for salary processing, tax filings, and compliance. ✅ Opt for providers offering scalable solutions and local knowledge.
Internal Operational Readiness	✅ Define roles and responsibilities across HR, finance, and legal. ✅ Train teams on country-specific payroll practices. ✅ Create a streamlined process for payroll queries and issue resolution.

conclusion

Many businesses find EOR services to be a helpful starting point when entering new markets. But as operations grow and become more complex, there is often a need for greater visibility, consistency and control. In such cases, a more integrated payroll approach becomes essential.

Transitioning to a single global payroll provider isn’t just about simplifying systems. It’s about building a foundation that can scale with the business, support compliance across jurisdictions, and bring payroll, finance, and HR onto the same page. It enables teams to transition from reactive management to proactive planning, all while maintaining focus on local requirements.

Galaxy Group works closely with businesses navigating this shift. With regional expertise and scalable infrastructure, the focus is on helping organisations streamline operations, reduce complexity, and plan confidently for what’s ahead.

As global workforces evolve, so should the way payroll is managed. Choosing the proper setup is a strategic decision rather than a technical one.

Ready to streamline your global payroll?

Talk to our team and find the proper setup for your growing business.

FAQ’S

What’s the difference between an EOR and a global payroll provider?

An EOR becomes the legal employer for your overseas team and handles everything from contracts to compliance. A global payroll provider supports your in-house HR team by managing payroll across multiple countries once you’ve set up your legal entity.

When is the right time to switch from an EOR to a global payroll provider?

If your team is growing, you’ve set up a local entity, or you want more control over compliance and reporting, it’s likely time to move to a global payroll model. It’s a natural step for companies ready to scale sustainably.

Can a global payroll provider handle minimum wage changes in different countries?

Yes. Most global payroll platforms stay updated with local labour laws and adjust payroll calculations automatically, so you remain compliant without tracking every change yourself.

Is switching to a global payroll provider more cost-effective than staying with an EOR?

Often, yes. EORs work well for early-stage expansion, but they can become expensive as your team grows. A global payroll setup typically reduces costs and gives you more control over operations.

Can I use both an EOR and a global payroll provider at the same time?

Yes. Many companies take a hybrid approach by using EORs in countries where they don’t yet have an entity and a global payroll where they do. This allows for flexible and phased expansion.

Guide to Payroll in Vietnam

August 28, 2025 by digitalgowhere

August 28, 2025

Guide to Payroll in Vietnam

Payroll management in Vietnam is a critical function that goes beyond the distribution of monthly salaries. It requires a sound understanding of wage structures, statutory contributions, and local labour regulations to ensure compliance and fairness.

For organisations establishing a presence, expanding teams, or managing a local workforce, effective payroll processes from the outset are essential. Transparent and accurate practices build employee confidence, foster trust, and support organisational efficiency.

This guide outlines the principal aspects of payroll in Vietnam, including minimum wage requirements, salary benchmarks, statutory deductions, reporting obligations, and final settlements. It also considers the advantages of outsourcing payroll, offering businesses a practical means of reducing administrative complexity while maintaining compliance and operational focus.

Table Of Content

How Payroll Works in Vietnam?

Payroll in Vietnam operates within a structured legal framework that requires employers to comply with social insurance obligations, tax regulations, and labour laws. A well-defined payroll system is essential to ensure accuracy and compliance with these requirements.

Most companies process payroll on a monthly basis, with salaries typically paid by the final working day of the month. In addition to gross wages, payroll calculations must include mandatory deductions for personal income tax, social insurance, health insurance, and unemployment insurance, as stipulated by Vietnamese law.

Here’s what the process usually looks like:

1. Start with the Gross Salary

It begins by calculating each employee’s total earnings—this includes their base salary, fixed allowances, overtime, and any bonuses agreed upon in the contract.

2. Apply Employee Deductions

Next, certain mandatory deductions are made from the employee’s salary. These usually cover:

Social Insurance
Health Insurance
Unemployment Insurance
Personal Income Tax

The rates are set by the government and need to be reported and paid monthly.

3. Add Employer Contributions

Additionally, employers are required to contribute to the same insurance schemes on behalf of their employees. These costs are separate from what is deducted from the salary.

4. Issue Payslips

Once deductions are done, employees receive a payslip with a breakdown of gross pay, deductions, and net pay. This step keeps things transparent and helps avoid confusion.

5. Submit Reports

Companies must regularly report payroll data to tax and insurance authorities. There’s also an annual income tax reconciliation, especially for employees with changing or multiple income sources.

6. Stay Updated on Regulations

Payroll regulations in Vietnam are subject to frequent and sometimes unexpected changes. For businesses—especially those newly entering the market—it is essential to remain vigilant and up to date to avoid compliance risks.

What Is the Minimum Wage and Average Salary in Vietnam?

Minimum Wage in Vietnam

Vietnam’s minimum wage structure is divided into two main categories:

1. Common Minimum Wage

This is set at VND 2,340,000 (approximately US$93) and is used to calculate salaries for employees in state-owned organisations and enterprises. It also forms the basis for calculating social insurance contributions for all enterprises (with the maximum social contribution set at 20 times the standard minimum wage).

2. Regional Minimum Wage

Employees of non-state businesses are subject to the regional minimum wage, which is determined by four regions designated by the government. Following a two-year freeze in spite of inflation, these were raised by 6% beginning in July 2024. The updated prices are:

Region	2022 Minimum (VND)	2022 Minimum (US$)	2024 Minimum (VND)	2024 Minimum (US$)
Region I	4,680,000	192	4,960,000	196
Region II	4,160,000	171	4,410,000	175
Region III	3,640,000	150	3,860,000	153
Region IV	3,250,000	134	3,450,000	137

3. Hourly Minimum Wages (by region, July 2024):

Region I: VND 23,800 (US$0.94)
Region II: VND 21,200 (US$0.84)
Region III: VND 18,600 (US$0.74)
Region IV: VND 16,600 (US$0.66)

Even if workers are paid on a daily or weekly basis, employers are still required to make sure that they all receive at least these minimums. The workplace’s location determines the applicable regional minimum; if a business serves several subregions, all employees must be covered by the highest applicable rate.

Average Salary in Vietnam

Depending on the sector, region, and degree of experience, salaries in Vietnam can differ significantly. Although there isn’t a set national average, the following are essential things to remember:

By Region

Location	Monthly Average Salary (VND)	Equivalent in USD	Notable Insights
Hanoi & Ho Chi Minh City	10,500,000 – 18,000,000	$415 – $710	Salaries are significantly higher in these tier-1 cities, especially in sectors like tech, finance, and real estate.
Secondary Cities (e.g. Da Nang, Hai Phong)	8,000,000 – 12,000,000	$316 – $474	Slightly lower cost of living leads to more moderate pay, but strong growth in logistics and tourism.

By Sector

Sector	Monthly Average Salary (VND)	Equivalent in USD	Talent Market Insights
Information Technology	20,000,000 – 35,000,000	$790 – $1,380	There is a high demand for skilled developers and tech engineers.
Manufacturing & Logistics	9,000,000 – 15,000,000	$355 – $590	One of the largest employment sectors is characterised by steady wage growth.
Hospitality & Retail	6,000,000 – 10,000,000	$236 – $395	Entry-level dominated; seasonal wage fluctuations are common.
Accounting & Finance	10,000,000 – 18,000,000	$395 – $710	Competitive salaries, especially in international or regional firms.

Key Takeaways for Employers

The Vietnamese government has established a strictly regulated wage system.
Employers must adhere to region-specific minimum wage requirements, irrespective of the frequency of payment.
While compliance is mandatory, offering wages above the legal minimum is often necessary to attract and retain skilled employees.
Payroll calculations must consider factors such as regional wage levels, job role, and statutory contributions including health and social insurance.

Working Hours, Overtime Pay, and Employer Compliance in Vietnam

Establishing a workforce that is both efficient and compliant requires a clear understanding of Vietnam’s labour regulations. The Labour Code of 2019, together with guidance issued by the Ministry of Labour, Invalids, and Social Affairs (MOLISA), sets out the legal framework governing standard working hours, overtime provisions, and employer obligations. The key requirements are outlined below.

Standard Working Hours

Category	Details
Normal Working Hours	Up to 8 hours per day, 48 hours per week
Shortened Working Week	Common in sectors involving dangerous or hazardous conditions; typically 6–7 hours/day
Flexible Arrangements	Allowed if agreed upon in employment contracts, ensuring total hours don’t exceed weekly or monthly caps

Note: A Monday to Friday workweek is not mandated by law, but it is recommended when practical because it promotes work-life balance and is standard procedure.

Overtime Pay Regulations

Vietnam enforces strict regulations on overtime to protect employee welfare. The framework operates as follows:

Overtime Scenario	Overtime Rate (as % of Base Hourly Wage)
Weekdays (Normal Working Days)	150%
Weekends (Saturday/Sunday)	200%
Public Holidays or Paid Leave Days	300%
Night Shift Overtime (any day)	An additional 20% on top of the applicable rate

1. Daily cap: Overtime must not exceed 12 hours/day

2. Monthly cap: Overtime must not exceed 40 hours/month

3. Annual cap: Overtime must not exceed 300 hours/year for most sectors (expanded from 200 hours under recent law)

Employer Compliance: Key Requirements in Vietnam

1. Clearly define employment terms

All contracts must include working hours, rest periods, and overtime terms in writing.

2. Maintain accurate timekeeping records

Employers must track daily attendance, working hours, and all overtime performed.

3. Obtain written consent for overtime

Overtime requires the employee’s written consent, unless it’s an emergency.

4. Mandatory rest periods

Workers must receive at least one full 24-hour break every 7 consecutive working days.

5. Breaks during long shifts

Employees working 6+ continuous hours must get a minimum 30-minute break.

6. Health & safety precautions

Employers must conduct health and safety checks before assigning overtime in hazardous work conditions.

Penalties for Non-Compliance

Non-compliance with regulations on working hours and overtime may lead to:

1. Administrative fines ranging from VND 2 million to 75 million (approx. USD 80–3,000)

2. Temporary suspension of business operations in severe cases

3. Mandatory back payment of underpaid wages with interest

Strategic Insight for Employers

For organisations managing teams in Vietnam—particularly those with shift-based operations or expanding workforces—several practical measures can enhance payroll accuracy and compliance:

1. Implement automated payroll and attendance systems to minimise manual errors.

2. Ensure employment contracts are updated in line with the latest legal requirements.

3. Provide regular compliance training for HR personnel and line managers.

4. Engage local payroll or HR specialists to navigate regulatory obligations more effectively.

What Are the Employee Deductions and Employer Contributions in Vietnam?

Under the Labour Code and social insurance regulations, both employer and employee salary deductions must be taken into account when managing payroll in Vietnam. These deductions apply universally, irrespective of industry or company size.

Employee Salary Deductions:

Employees in Vietnam typically see deductions for three main types of compulsory insurance:

1. Social Insurance (SI): 8%

2. Health Insurance (HI): 1.5%

3. Unemployment Insurance (UI): 1%

These are deducted directly from the employee’s gross monthly salary.

Employer Contributions:

In addition to employee deductions, employers are legally required to contribute a larger share toward the same insurance categories, along with other funds:

1. Social Insurance: 17.5%

2. Health Insurance: 3%

3. Unemployment Insurance: 1%

4. Occupational Accident and Disease Fund: 0.5%

5. Trade Union Fee (if applicable): 2% (based on company policy or union presence)

Altogether, this brings the total employer contribution to approximately 22% of each employee’s salary.

Important Note on Salary Basis

While the government sets clear caps, contribution amounts are determined by an employee’s monthly salary. Social and health insurance contributions are capped at 20 times the basic salary, whereas unemployment insurance is calculated up to 20 times the regional minimum wage. These limits ensure the system remains fair and manageable for both employers and employees.

Key Insight

Maintaining payroll compliance in Vietnam requires close attention to changes in wage levels, contribution ceilings, and insurance regulations, many of which are subject to annual revision. Accurate calculations and timely submissions are essential to avoid penalties.

For organisations with expanding teams or cross-border operations, engaging professional payroll services in Vietnam can streamline compliance, reporting, and overall workforce management.

How Are Payroll Reports, Tax Filings, and Final Settlements Handled in Vietnam?

Processing monthly salaries is only one element of payroll management in Vietnam. Employers must also comply with government requirements relating to taxation, payroll reporting, and employee terminations. The key obligations are summarised below:

1. Monthly Payroll Reports

Companies prepare detailed monthly reports showing employee earnings, deductions (like tax and insurance), and net salaries.
These records should be accurate and well-maintained, as local authorities may request them during audits.

2. Filing Personal Income Tax (PIT)

Employers are responsible for declaring and paying PIT on behalf of employees.
Filing frequency, whether monthly or quarterly, depends on the size of the business.
At the same time, employers must submit social, health, and unemployment insurance contributions.

3. Year-End Tax Finalisation

At the close of each financial year, a reconciliation process ensures the correct amount of tax has been paid.
Employers submit a final PIT report and issue a form to employees for personal tax records or refunds.

4. Final Settlements When Employees Leave

Businesses must calculate and disburse outstanding amounts such as unpaid salary, bonuses, or leave encashments.
PIT is finalised, and social insurance records are updated or closed.
This process is generally completed within 7 working days from the employee’s last day.

5. Staying Updated

Vietnam’s payroll regulations are revised frequently.
Many businesses choose to work with payroll service providers to ensure ongoing compliance and reduce administrative risk.

What Happens to Payroll During Termination and Final Settlement?

In Vietnam, employers are required by the Labour Code to complete all payroll settlements within 14 working days of an employee’s final day of service. This obligation applies irrespective of the reason for separation—whether resignation, termination, or contract expiry—and ensures fairness and transparency in the termination process.

The final payroll generally includes:

1. Unpaid salary for the days worked up to the departure date

2. Payment for unused annual leave, based on the remaining balance

3. Severance pay, if the employee has completed at least 12 months of service and the termination was not due to misconduct

4. Any pending bonuses or allowances that were contractually agreed upon

5. Statutory deductions, including personal income tax and social insurance contributions

Employers must ensure that all documentation is completed correctly, records are accurate, and the final payment is clearly communicated to the departing employee. Effective management of termination settlements not only upholds legal compliance but also reflects respect for the individual and helps protect the organisation’s reputation.

What are the Best Practices for Compliance and Accuracy for Payroll Services in Vietnam?

Payroll in Vietnam extends beyond salary disbursement; it demands strict adherence to legal and regulatory requirements to maintain smooth business operations. Key practices include:

1. Monitoring updates to wage, tax, and insurance regulations

2. Selecting an appropriate payroll system, whether in-house or outsourced

3. Maintaining organised documentation of contracts, salaries, and tax filings

4. Meeting all tax and insurance deadlines to avoid penalties

5. Centralising employee data for efficient management of leave, bonuses, and deductions

6. Processing final settlements for departing employees within seven working days

7. Engaging local payroll experts to navigate Vietnam’s complex requirements and maintain compliance.

Also Read : Payroll Outsourcing: A Cost-Effective Solution For Employers

conclusion

Managing payroll in Vietnam goes beyond calculations; it requires close attention to contribution ceilings, reporting obligations, and labour law compliance. These responsibilities not only safeguard legal conformity but also shape the employee experience and support smooth business operations.

As organisations expand in Vietnam, sustaining payroll compliance becomes increasingly important. It mitigates legal risks, strengthens employee trust, and underpins long-term stability. However, keeping pace with evolving regulations and local requirements can be complex without specialist support.

Galaxy Group offers practical, on-the-ground expertise to simplify payroll management. From initial setup through to business expansion, our team ensures compliance remains aligned with organisational objectives—enabling companies to concentrate on growth and people, while we manage the complexities behind the scenes.

Stay Compliant with Vietnam’s Payroll Regulations

Get insights on Vietnam’s 2025 payroll laws, wage updates, and compliance essentials to stay on track.

FAQ’S

What is the payroll system in Vietnam?

The payroll system in Vietnam handles social insurance contributions, tax deductions, and salary computation. Employers must follow laws pertaining to minimum wages and reporting deadlines. To effectively manage compliance, many businesses use local payroll services.

How do salaries work in Vietnam?

In Vietnam, salaries are typically paid on a monthly basis and are subject to the government-mandated minimum wage. Additionally, employers manage unemployment insurance, social insurance, health insurance, and personal income tax deductions. The majority of companies adhere to a defined framework to guarantee that workers are paid on time and in compliance.

Is 13th-month pay mandatory in Vietnam?

No, the law in Vietnam does not require 13th-month pay. Nonetheless, it is a typical custom, particularly during Tết, the Lunar New Year. Numerous employers provide it as a bonus in accordance with employee contributions or business performance, or as stipulated in employment contracts or internal policies. It becomes a legally binding obligation if it is expressly mentioned in the contract or company policies.

Do foreign companies need to set up a local entity to run payroll in Vietnam?

Not always. Establishing a complete legal entity can seem like a big step if you’re just getting started or testing the waters. For this reason, many businesses choose to partner with an Employer of Record (EOR) or a local payroll provider. It’s a sensible approach to maintain compliance and appropriately compensate your staff without becoming bogged down in time-consuming paperwork and registrations.

What are the standard working hours in Vietnam?

The standard workweek is 48 hours, typically spread across six days. Overtime is allowed but must follow labour law guidelines.

Comprehensive Checklist on Employment in Taiwan

August 26, 2025 by digitalgowhere

August 26, 2025

Comprehensive Checklist on Employment in Taiwan

Taiwan has rapidly emerged as a key business hub in the Asia-Pacific, offering a skilled workforce, strong infrastructure, and a business-friendly environment. For employers and HR professionals looking to expand into Taiwan, understanding the local employment landscape is a strategic advantage and a legal necessity.

Hiring employees in Taiwan requires compliance with local labour laws, awareness of cultural norms, and the ability to manage contracts, benefits, and payroll accurately.
To simplify this process, this blog presents a comprehensive, step-by-step checklist covering everything from drafting compliant employment contracts to managing tax, overtime, and foreign hires.

Table Of Content

How Can Employers Successfully and Legally Hire Employees in Taiwan?

Here are the 11 essential steps every employer must follow to stay compliant with local labour laws, manage payroll accurately, and onboard talent effectively, whether you’re hiring local staff or foreign professionals. Use this checklist to build a legally sound and efficient hiring process in Taiwan.

1. Understand the Key Labour Laws in Taiwan

Understanding the labour law in Taiwan is the first step toward establishing compliant employment practices. Before hiring, employers must familiarise themselves with the two key statutes governing employment in Taiwan:

Labour Standards Act (LSA)

Regulates working conditions, wage levels, leave policies, and termination procedures.
Sets working hour limits and mandates rest periods.
Requires issuance of payslips and retention of employment records for at least five years (non-compliance can attract fines up to NTD 300,000).

Employment Service Act

Governs the employment of foreign nationals.
Promotes fair hiring practices and prevents discrimination.
Requires employers to provide equal opportunities.

Key Employer Obligations:

Contracts must comply with statutory terms.
Register new hires for labour insurance, health insurance, and pension within 3 days.
Ensure non-discriminatory hiring and workplace practices.

2. Meet the Legal Requirements to Hire Foreign Employees

Hiring international talent in Taiwan can enhance innovation and global reach, but it must be handled in strict accordance with national laws.

To hire foreign employees in Taiwan, employers must:

Obtain a work permit from the Ministry of Labour before the employee begins work.
Assist the employee in applying for an Alien Resident Certificate (ARC) for legal residency and employment.
Ensure the position qualifies under Taiwan’s approved job categories (e.g., tech, education, management roles).

Permits are typically valid for 1–3 years and are renewable. Work without proper authorisation is illegal and may result in fines or deportation.

Employer Responsibilities

Provide a valid employment contract in Taiwan, outlining job duties, compensation, and benefits.
Ensure that foreign hires are registered for labour insurance, health insurance, and pension plans.
Offer bilingual contracts (Mandarin + English) to avoid miscommunication and protect legal interests.
Assist with onboarding and cultural orientation to support smooth integration.

Employers must manage several levels of compliance when onboarding foreign workers. Our foreign hiring guide provides detailed information on the necessary documentation and best practices.

3. Follow a Step-by-Step Hiring Process

Successfully hiring employees in Taiwan requires a structured approach that complies with local labour laws and cultural expectations. Employers must follow a clear path, from posting vacancies to onboarding, while maintaining full regulatory compliance

Job Posting & Recruitment

Publish compliant, non-discriminatory job ads (in Mandarin and/or English).

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Candidate Screening & Interviewing

Conduct interviews, ensuring fairness and adherence to anti-discrimination laws.

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Offer Letter & Employment Contract

Provide a written employment contract in Taiwan outlining key terms.

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Labour & Insurance Registration

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Formal Onboarding

Introduce company policies, team structure, and work culture, and set performance expectations.

4. Draft a Legal Employment Contract in Taiwan

A valid employment contract in Taiwan may be written or oral; however, written agreements are strongly recommended. The law mandates that contracts include:

Job title & scope of work
Working hours, rest days, and overtime terms
Salary, payment frequency, and method
Leave entitlements (annual, sick, maternity, etc.)
Termination conditions and severance policies
Contributions to social security schemes

For foreign hires, bilingual contracts (Mandarin and English) are strongly encouraged. Contracts should also include a reference to compliance with labour insurance, health insurance, and pension contributions as part of onboarding obligations. This clarity ensures both legal protection and operational transparency for all parties involved.

Did You Know?

Under Taiwan’s Labour Standards Act, employers are required to issue pay slips and retain employment records for at least five years; failure to comply may result in fines of up to NTD 300,000.

Taiwan’s labour laws require specific clauses within employment agreements. To understand how these local requirements fit into global standards, refer to our international contracting guide.

5. Comply with Taiwan’s Minimum Wage Requirements

Employers must comply with Taiwan’s minimum wage laws for both full-time and part-time employees. 1. As of 2025, the minimum wage rates are:

NTD 28,590 per month (≈ USD 893.44)
NTD 190 per hour (≈ USD 5.94)

2. These wage rates are reviewed annually by the Ministry of Labour to reflect inflation and economic changes. 3. Employers are responsible for paying wages at or above the legal minimum, ensuring that bonuses, overtime pay, and allowances are provided in addition to base salary, and maintaining accurate payroll records to demonstrate compliance with Taiwan’s labour laws. 4. Non-compliance with Taiwan’s minimum wage laws can result in serious consequences, including financial penalties, employee back pay claims, and reputational damage. Ensuring timely and accurate wage practices is essential for maintaining legal and professional credibility.

6. Set Up a Legally Compliant Payroll System

A structured approach to payroll is crucial for employers looking to operate compliantly in Taiwan. Below is a breakdown of key requirements:

1. Pay cycle

Most companies follow a monthly payroll system, typically disbursing salaries at the end of each month.

2. Payslip requirement

Employers must issue detailed payslips that show the gross salary, deductions, and net pay.

3. Payroll components

Base salary, overtime pay, bonuses (e.g., 13th-month salary), meal/transport allowances, and insurance contributions.

4. Labour insurance, health insurance, and pension
Mandatory deductions from both employer and employee; employers must register new hires within three days.

7. Follow Working Hour Regulations and Overtime Pay

1. Taiwan’s standard work schedule, which is intended to safeguard the welfare of its employees, is limited to 8 hours per day and 40 hours per week. 2. Overtime is limited to 46 hours per month and must be done with employee consent. 3. Overtime must be fairly compensated:

1.34× the hourly wage for the first two extra hours
1.67× times the hourly wage for any additional hours

4. At least one rest day per week is mandatory by law, no exceptions. 5. If employees work on public holidays or scheduled rest days, employers must provide additional pay or compensatory leave.

8. Provide Mandatory Employee Leave & Benefits

Offering the right mix of leave and benefits is essential for compliance and employee satisfaction in Taiwan. Under the labour law in Taiwan, employers must provide a set of statutory entitlements:

Annual leave: Starts at 3 days for service exceeding 6 months but less than 1 year and increases to 7 days after one year of service, which continues to increase with tenure.
Sick leave: Up to 30 days per year at half pay.
Paid maternity leave of 8 weeks.
Paternity leave: 5 days, fully paid.
Public holidays: Around 12 national holidays annually.

Many companies enhance their packages with additional benefits such as

A 13th-month salary or performance bonus
Meal and transport allowances
Supplemental insurance and wellness support
Contributions to the Labour Pension Fund

These offerings not only fulfil legal requirements but also help attract and retain skilled professionals in a competitive hiring market.

9. Understand and Fulfil Taxation Obligations

Understanding taxation is essential for payroll compliance. Employers must manage income tax withholding and contribute to the country’s social security schemes in line with regulatory requirements.

Income tax:

Progressive rates range from 5% to 40%, depending on the annual income bracket.

Withholding tax:

Employers must withhold income tax at the source and remit it to the National Taxation Bureau.

Social Security contributions:

Employers contribute to labour insurance, national health insurance, and the Labour Pension Fund, and employees contribute a smaller share through automatic payroll deductions.

10. Comply with Overtime and Termination Rules

In Taiwan, overtime and termination are tightly regulated under the Labour Standards Act. Employees may work overtime only with consent, and it must not exceed 46 hours per month. Compensation is legally mandated.

Dismissals must be lawful and justified. Employers must: Give 3 to 30 days’ notice (or pay in lieu)
Provide a written explanation.
Pay severance, typically half a month’s salary per year of service

Improper termination can result in fines, reinstatement, or compensation.

Quick-Reference Hiring Checklist for Employers to Hire in Taiwan

Stay compliant with Taiwan’s employment laws using this quick-reference checklist:

Item	Status
Understand the labour laws in Taiwan
Meet the Legal Requirements to Hire Foreign Employees
Draft a legal employment contract in Taiwan
Comply with Taiwan’s Minimum Wage Requirements
Ensure the correct payroll setup in Taiwan
Follow the legal working hour limits in Taiwan
Register for health, labour, and pension contributions
Provide leave and benefits in accordance with the law
Fulfil the tax obligations
Manage termination and severance correctly

Conclusion

Navigating employment in Taiwan demands not only an understanding of the local market but also a precise grasp of legal, tax, and procedural requirements. From defining the minimum wage in Taiwan to crafting a compliant employment contract in Taiwan, every step matters, especially when expanding operations or onboarding foreign talent.

At Galaxy Group, we believe in simplifying complexity. This checklist serves as a practical tool to help HR teams, global employers, and decision-makers establish compliant, efficient hiring practices in Taiwan.

Expand Your Team with Global Talent

Ensure compliance with Taiwan’s laws when onboarding international professionals.

FAQ’S

How is payroll managed in Taiwan?

Payroll in Taiwan is typically processed on a monthly basis, with employers responsible for deducting and remitting taxes, labour insurance, health insurance, and pension contributions. Payslips must be provided.

How can I hire employees in Taiwan as a foreign company?

To hire employees in Taiwan, foreign companies must comply with local employment laws, draft legally sound contracts, register with tax and social insurance authorities, and—if hiring foreign talent—secure valid work permits and ARCs.

What are the taxation requirements for employers in Taiwan?

Taxation in Taiwan requires employers to withhold progressive income tax (ranging from 5% to 40%) and make contributions to national health insurance, labour insurance, and the Labour Pension Fund. Errors or delays may result in penalties.

What should be included in a Taiwan employment contract?

A valid employment contract in Taiwan must include job role, salary, working hours, leave, insurance, and termination terms. Bilingual agreements are recommended for foreign hires.

What are the working hour limits in Taiwan?

The working hour limits in Taiwan are 8 hours per day, 40 hours per week, with a cap of 46 overtime hours per month, paid at premium rates.

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Why it matters:

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Corporate Income Tax (CIT):

Individual Income Tax (IIT):

Taxable Benefits:

Withholding Tax on Cross-Border Payments:

Recordkeeping and Audits:

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