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Guide to Payroll in Taiwan

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Guide to Payroll in Taiwan

Business professional reviewing payroll documents in Taiwan office with national flag and Taipei 101 in background.

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.

CategoryAmount (NTD)Equivalent (USD)
Average Regular EarningsNT$47,796~$1,440
Average Total EarningsNT$113,846~$3,400
Median Monthly SalaryNT$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.

Explore Payroll Services

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.

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

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

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

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

Hidden Challenges of Cross-Border Employee Mobility in Taiwan

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Hidden Challenges of Cross-Border Employee Mobility in Taiwan

Hidden Challenges of Cross-Border Employee Mobility in Taiwan

Organisations are steadily broadening their regional and international reach in today’s fast-paced global landscape. Taiwan, praised for its robust digital ecosystem, dependable governance, and central positioning in Asia, remains an attractive destination for global enterprises. Yet, beneath it’s appeal lie subtle complexities surrounding cross-border employee mobility, particularly in relation to immigration, labour laws, and regulatory requirements.

 

Transferring staff internationally requires more than logistical preparation – it necessitates a comprehensive awareness of the host country’s legal, cultural, and economic environment. Although Taiwan’s employment structure is broadly investor-friendly, it comes with distinct challenges. These include employment contracts in Taiwan, changing norms around employee benefits in Taiwan, and legislation that favours local employee protection.

 

Understanding these less obvious but critical aspects of employee mobility is essential for any organisation seeking a smooth and sustainable expansion into Taiwan. In the sections that follow, we will examine the hidden challenges that businesses must anticipate and navigate to ensure both compliance and operational success in this dynamic market.

Table Of Content

Social and Cultural Meshing

Foreign professionals in Taiwan often encounter social and cultural hurdles that complicate workplace integration. The local communication style, which avoids confrontation and promotes politeness, may lead to miscommunication. Confucian traditions, which emphasise hierarchy and respect for titles, can clash with the flatter organisational cultures common among expatriates.

 

Given the importance of Guanxi networks, business practices such as after-hours gatherings may feel obligatory and complicate social interactions. Informal language barriers and limited awareness of cultural norms may further inhibit cohesion. To address these issues, employers should provide pre-arrival cultural training, ongoing language support, dual-language communication, mentorship, and inclusive team-building. Emphasising diversity training and fostering cross-cultural dialogue are also critical for long-term integration.

The Immigration Framework in Taiwan

Taiwan adopts a layered immigration policy, with distinct categories for foreign nationals, Mainland Chinese citizens, and individuals from Hong Kong and Macau. Programs like the Employment Gold Card and simplified channels via the Workforce Development Agency (WDA) have enhanced accessibility for select professionals. Yet, companies must still navigate a thorough application and approval process.

 

Foreigners may only work in Taiwan if their individual qualifications and employer credentials meet specific criteria. Most foreign employees are required to hold a relevant degree or possess considerable industry experience. Simultaneously, employers must demonstrate financial viability, often through revenue or capital thresholds, to sponsor foreign staff.

Facing Labour Law Restrictions and Employment Risk

Taiwan’s labour system does not support ‘at-will’ employment. Termination must have substantial legal grounds, such as restructuring or underperformance. Additionally, procedural compliance is essential, encompassing notice periods, severance compensation, and job search leave.

 

While designed to uphold workers’ rights, these provisions may prove difficult for foreign firms less familiar with the local framework. Misaligned employment contracts in Taiwan  or improperly managed terminations can lead to costly legal disputes and reputational damage.

Limited Sectoral Mobility and Workforce Reassignment Issues

A frequently overlooked obstacle is limited sectoral mobility. Employees in Taiwan are typically retained within their current industry – transitions from manufacturing to services, for instance, are rare. This limits versatility and complicates workforce planning for organisations aiming to develop cross-functional teams.

 

In addition, evolving policies on the minimum wage in Taiwan and entitlements require businesses to recalibrate their workforce mobility strategies accordingly.

 

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

Permit Approvals and Employer Eligibility

Companies seeking to employ foreign professionals must meet specific qualifying conditions, including revenue or trade volume benchmarks. Without such credentials, even highly skilled individuals may be unable to obtain a valid work permit.

Learn more about “How to Apply for work permit in Taiwan“

Even intra-company transfers face scrutiny, requiring adherence to employment law and confirmation that the local entity is authorised to sponsor overseas employees.

Legal Disputes and Employment Litigationy

Mediation is commonly encouraged in Taiwan, but courts frequently intervene in unresolved employment cases. Disputes often center around unfair dismissal, contract ambiguity, or workplace discrimination.

 

To avoid complications, businesses must operate in accordance with Taiwanese labour standards, especially in areas involving Taiwan employee benefits, severance practices, and reassignments. Failing to do so could result in back pay, reinstatement orders, or legal penalties.

Managing Non-Compete Covenants

To safeguard intellectual property and sensitive information, many businesses use post-employment restrictions. In Taiwan, non-compete clauses are only valid if four requirements are met:

  • The employer has a lawful interest to protect
  • The employee had access to sensitive business information
  • The clause is logical in scope and duration (maximum two years)
  • The employee receives fair compensation

Such clauses may be deemed invalid without adequate compensation or clarity, which could potentially increase competitive vulnerability.

 

Our guide: How to Hire International Employees : A Comprehensive Guide

Remote Work and the Shifting Definition of Employment

The growing trend of remote work has altered the traditional understanding of employment. Courts in Taiwan now evaluate employment status based on practical controls, operational integration, and economic dependence – rather than relying solely on contractual designations or physical presence.

 

Companies with a remote workforce in Taiwan should carefully structure these arrangements to avoid unintentionally triggering employer obligations under Taiwanese law.

Strains in the Compensation and Payroll Processes

Managing payroll in Taiwan entails compliance with tax regulations, social contributions, and the Labour Standards Act. Salaries must meet the legal minimums, and statutory benefits – such as National Health Insurance, labour insurance, and retirement funding – must be applied correctly.

 

Although the average salary in Taiwan varies across sectors, international employers must ensure that their compensation structures meet both legal and market demands to recruit and retain qualified personnel.

Conclusion

Cross-border employee mobility in Taiwan offers immense opportunities but also demands informed navigation. From immigration compliance to local employment laws, success hinges on expert support.

At Galaxy Payroll, we deliver more than consultation. We offer a fully managed solution for companies relocating employees, setting up new branches, or testing the market without full legal incorporation.

Our offerings include:

  • Business incorporation in Taiwan and regulatory compliance
  • Legally Compliant Employment Contracts in Taiwan
  • Comprehensive payroll services in Taiwan, including taxation and benefits
  • Immigration assistance, including permits for foreigners who can work in Taiwan
  • Employer of Record (EOR) options for companies not ready to establish an entity
  • Operational support for both remote and hybrid teams

With Galaxy Payroll as your compliance and payroll partner, you gain clarity, avoid regulatory setbacks, and scale operations efficiently.

 

Disclaimer: This blog is for informational purposes only and does not constitute any legal advice.

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FAQ’S

Can foreigners work in Taiwan legally?

Yes, foreigners can work in Taiwan legally, provided they obtain the appropriate work permit and meet eligibility criteria such as qualifications, salary thresholds, and sector-specific requirements.

Cultural and family integration, work permit and visa compliance, employment contract alignment, managing compensation and employee benefits and adapting to Taiwan’s Compliance system, are some of the lesser-known but critical challenges.

Employment contracts in Taiwan must comply with the Labour Standards Act and include necessary terms such as wages, working hours, leave, and termination. Bilingual contracts should specify the governing language in case of disputes.

Spouses and dependents may face challenges like visa restrictions, job limitations, and adapting to local schools and healthcare systems. Proper support can ease their integration.

The Role of Payroll Software in Streamlining Processes

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The Role Of Payroll Software In Streamlining Processes

Payroll is a critical function in any organization, as it affects the financial stability of the business and the livelihood of employees. With the advancement of technology, payroll software has become an essential tool for streamlining payroll processes, improving accuracy, and reducing the risk of compliance violations. In this article, Galaxy Payroll Group will show you the role of payroll software in streamlining payroll processes and the benefits that it can provide to businesses of all sizes.

One of the key benefits of payroll software is increased efficiency. By automating repetitive and time-consuming payroll tasks, such as payroll calculations, payroll tax compliance, and paycheck printing, payroll software can free up valuable time and resources that can be redirected to more strategic tasks. Additionally, payroll software can help to reduce the risk of errors, as it eliminates the need for manual calculations and eliminates the potential for human error.

‍Another benefit of payroll software is improved accuracy. With built-in features for tracking and recording employee information, payroll software can help businesses to maintain accurate and up-to-date payroll records. This is especially important when it comes to payroll taxes, as non-compliance can result in significant fines and penalties. By automating payroll tax calculations, payroll software can help to reduce the risk of compliance violations and ensure that payroll taxes are paid on time and in the correct amounts.

Payroll software can also help to simplify payroll processes and reduce the risk of errors. With features such as online time and attendance tracking , payroll software can help businesses to streamline their payroll processes and eliminate the need for manual timekeeping. Additionally, by automating the payroll process, businesses can reduce the risk of errors and improve data accuracy, as payroll data is automatically populated from other systems, such as HR and accounting systems.

‍Another benefit of payroll software is increased security. With features such as secure data storage and encrypted data transmission, payroll software can help businesses to protect sensitive payroll information from unauthorized access. Additionally, by automating payroll processes, businesses can reduce the risk of data breaches, as manual processes are eliminated and there is less opportunity for human error.
Payroll software plays a critical role in streamlining payroll processes and improving the efficiency and accuracy of payroll operations. Whether you are a small business with a low number of employees, or a large enterprise with complex payroll needs, payroll software can provide a range of benefits , including increased efficiency, improved accuracy, simplified processes, and increased security. By automating payroll processes, businesses can reduce the risk of errors and improve data accuracy, while freeing up valuable time and resources that can be redirected to more strategic tasks.