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?
- 1. Understand the Key Labour Laws in Taiwan
- 2. Meet the Legal Requirements to Hire Foreign Employees
- 3. Follow a Step-by-Step Hiring Process
- 4. Draft a Legal Employment Contract in Taiwan
- 5. Comply with Taiwan’s Minimum Wage Requirements
- 6. Set Up a Legally Compliant Payroll System
- 7. Follow Working Hour Regulations and Overtime Pay
- 8. Provide Mandatory Employee Leave and Benefits
- 9. Understand and Fulfil Taxation Obligations
- 10. Comply with Overtime and Termination Rules
- Quick-Reference Hiring Checklist for Employers to Hire in Taiwan
- Conclusion
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
Register new hires for labour insurance, health insurance, and pension schemes within 3 days of starting work.
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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
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)
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
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.
- A 13th-month salary or performance bonus
- Meal and transport allowances
- Supplemental insurance and wellness support
- Contributions to the Labour Pension Fund
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
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.
