Employer of Record in Taiwan

How an Employer of Record Works in Taiwan

An Employer of Record (EOR) in Taiwan provides a straightforward way to hire employees in the country without setting up your own local entity. By using an EOR like Rivermate, you can avoid the time and costs involved in setting up a company in Taiwan, and the EOR takes care of hiring on your behalf.

Rivermate provides EOR services in Taiwan, partnering with trusted local partners who have expertise you can rely on. We make it easy to hire quickly and compliantly, so you can focus on managing your business.

Taiwan labor market: At a glance

The hiring market
Greatest hiring activity:	Taipei
Hiring timelines:	Two days to a week for local hires; 1–3 months for foreign hires.
In-demand sectors:	Semiconductors, electronics, IT.
Sectors with skills shortages:	Manufacturing

The salary market
Employer tax contributions:	About 11–19.8%, plus 2.11% supplementary health premium.
Minimum wage:	TWD 29,500 per month.
Average gross annual salary:	About TWN 592,000.
Income tax brackets:	Five progressive bands of: 5%, 12%, 20%, 30%, and 40%.

What it costs to hire an employee in Taiwan

There are several costs to be aware of when hiring in Taiwan, from employer contributions to paid leave. This section covers the most important ones.

Salary

All salaries must be paid in the New Taiwan Dollar (TWD), and the average wage is TWD 49,300 a month. The minimum wage is TWD 29,500 per month, or TWD 196 per hour. Foreign professionals must also be paid a minimum equal to TWD 47,971 per month.

Employer contributions

The labor and employment insurance makes up 8.75% of the insured salary, but the maximum insured salary it’s calculated on is capped at TWD 45,800 per month. National Health Insurance is about 4.84%.

Pension is at least 6%, up to a maximum of TWD 150,000 of the monthly wage. It only covers locals and foreign professionals, and it doesn’t cover blue-collar or mid-level technical foreign workers.

The employer also pays occupational accident insurance. The range is 0.12–0.96% depending on industry.

Because of the caps, the total employer contribution can vary. As the employee earns more, the cost falls. Without caps applied, it’s 19.8%, but this can go down to about 11% when the employee is earning TWD 200,000.

There’s an additional supplementary health premium of 2.11%, which is calculated on total payroll above insured salaries. Employees pay the same rate on any bonuses they receive that are above four times the value of their monthly insured salaries.

Employees also have the following deductions:

• Labor and Employment Insurance: 2.5%
• NHI: 1.55% (plus an additional 1.55% for each dependent)
• Voluntary pension: 0–6%
• Income tax: 5–40%

Non-residents (people who stay in the country for 183 days or less in a tax year) also face an 18% salary withholding. If the monthly salary is TWD 44,250 or less, this is reduced to 6%.

Paid leave

Employees in Taiwan receive paid annual leave. They’re entitled to three days after six months of service, and this increases to 30 days over time. Employees also receive sick leave at half their standard pay for 30 days a year.

Other paid leave includes:

• Maternity leave, eight weeks (full pay after six months’ service, half pay before).
• Paternity leave, seven days.
• Marriage leave, eight days.
• Other leave, seven days (unpaid).

There are also 16 paid national holidays in Taiwan, including Labor Day, Teachers’ Day, and more.

Overtime

The first two hours of overtime on working days are paid at a premium of 34%. After that, the premium increases to 67%. If employees agree to work on holidays, they receive double pay.

Severance pay

Severance pay must be paid within 30 days. Under the new pension system, employees receive half a month’s pay for every year of service, based on average wage, and this is capped at six months. Employees who stayed on the old system get one month per year, and no cap applies.

Bonuses

While not mandatory, a one-month bonus is common, and it’s paid in December or around Lunar New Year. The tax-exempt meal allowance is up to TWD 3,000 per month. Private health insurance is often provided to foreign workers, but it’s not common for locals.

Employer cost calculator in Taiwan

Use our employer cost calculator to find out how much you can expect to pay for the total employment costs in Taiwan.

What hiring in Taiwan really looks like

Market condition	What an employer needs to know
Talent availability	Generally good, but tighter at the high end.
Top-paying sectors	Finance and insurance, and electronic components.
Hiring speed	As soon as two days for local hires.
Employment protection	Strong. Must have a legal ground and prove it if you want to end a role.

The main sectors in Taiwan are electronics, IT, and semiconductors. Taiwan is home to major electronics manufacturers like Foxconn, and chips are made here for companies like Nvidia.

40% of the GDP is made up of industry, while services account for 59%. Semiconductors make up about a fifth of the economy. The highest salaries are in the finance and insurance sectors.

Employing local people is straightforward. It doesn’t take long, and a contract can be issued in a week. During onboarding, it’s good practice to collect a copy of the employee’s bank book. Along with a copy of their ID, you can check that the names, written in traditional Chinese characters, match. This prevents pay from going to the wrong bank account.

Employing foreign workers isn’t as straightforward. If you want to employ foreign workers in Taiwan, you’ll need to apply for a foreign professional’s work permit. The employee must then apply for a resident visa to enter the country, and they must then apply for a residence card (ARC) within 30 days. The whole process can take 1–3 months.

There’s no legal maximum probation, and it’s decided between the employer and employee. Probationers have the same rights as other employees, and dismissal requires solid legal grounds. Notice is also due after three months’ service. To extend the probation period, you’ll need the employee to agree.

Country-specific problem that employers must know about

The labor dispatch model is recognized in the Labor Standards Act. Rivermate works with experienced local partners, and these partners become the legal employers. However, there are a few rules that apply in Taiwan that are different from those in some other countries.

For a start, the partner can name the client in the contract. There are also restrictions on the types of contracts you can use. These are limited to permanent contracts, and no fixed-term contracts can be used for dispatch employees.

You can’t pre-select the employee, interview them, or choose them before signing with the partner. This can lead to high penalties of TWD 90,000–450,000, which you will have to pay.

You also share some liability. For example, if the partner fails to pay employees, you must pay the salary. For occupational accident compensation, you’re also jointly liable.

So, while the dispatch model is legal and transparent, it’s important to be aware of the limitations and your own responsibilities when hiring in this way in Taiwan.

Compliance risks employers need to know about in Taiwan

Terminations

You must have a legal ground to terminate an employee, and you must prove it. You must provide notice and severance when the termination is due to reasons like business closure or the employee being unable to do their job. For issues like fraud and serious breaches, severance pay isn’t required. For dismissals, you must report these to the labor authority 10 days before the employee’s last day.

Notice depends on the amount of time the employee has worked in the position. No notice is needed for the first three months, but from three months to one year, they must receive 10 days’ notice; from 1–3 years, 20 days; and for over three years, 30 days. Alternatively, they can be paid in lieu.

Overtime

Standard maximum working hours are legally set at eight hours a day and 40 hours a week. There’s also a daily maximum of 12 hours, including overtime, and a monthly cap on overtime of 46 hours.

In every seven days of work, employees must get two days off. One of these is regular leave. If they work, it has to be in an emergency only; the other is a rest day, and if they work, this must be counted as overtime.

Contracts

When using an EOR in Taiwan, you can’t test the waters with a fixed-term contract. You can only have permanent contracts under the labor dispatch model. Probation is the best option to assess a new employee, but you still need solid grounds for dismissal.

Foreign hires

Hiring foreign employees can be a challenge. You must first apply for a work permit, which takes seven working days online or 12 working days when applying with paper documents. The employee must then apply for a resident visa, then enter the country and apply for an Alien Residence Card (ARC). They must do this within 30 days, via the National Immigration Agency. This three-step process can take 1–3 months, and employing illegally can lead to a fine of up to TWD 750,000.

However, to employ foreigners in the first place, you need to meet certain conditions:

• If your company is up to one year old, you must have one of the following: paid-in capital of TWD 5 million or more; turnover of TWD 10 million or more; imports or exports of USD 1 million; agency commissions of USD 400,000 or more.

• For a company over one year old, you need an average turnover of TWD 10 million or more over the last year or last three years, or the same commissions or imports/exports figures as above.

How Rivermate can help you stay compliant when hiring in Taiwan

Our local partners have extensive knowledge of local labor laws and compliance, so they can handle the employment relationship for you. You can then focus on running your business without any compliance headaches.

Benefits of hiring employees through an EOR in Taiwan

Using an EOR is a recognized legal route to hiring in Taiwan because labor dispatch is regulated, so no local entity is needed. Setting up an entity can take 2–4 months, and you need foreign-investment approval from MOEA’s Department of Investment Review, which could take months.

When sponsoring foreign professionals, you need to meet a size test, which can be difficult for new companies. An EOR with a large workforce is likely to already meet this requirement, removing a potential problem for you. According to our expert, if you’re going to have under 10 hires, your own entity doesn’t make much sense.

Onboarding local hires is fast with an EOR, taking from two days to a week on average. Insurance is also registered from the first day, payroll is accurate, and wages are paid in the local currency. Contracts, insurance, pensions, and notice periods are all handled correctly, avoiding compliance issues that could trip up an employer new to the country.

Ready to hire in Taiwan?

Hiring in Taiwan becomes much more straightforward when you use an EOR. Rivermate makes the process simple, fast, and compliant, so talk with one of our experts today.

Talk to a Taiwanese Hiring Expert

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