Labor Law Compliance Guide for Taiwan

This labor law guide for Taiwan has important information for businesses looking to hire employees or contractors in the country. Taiwan is a country in Asia.

Category	Details
Minimum Wage	NT$29,500 per month / NT$196 per hour
Overtime Wage	1.34x first 2 hrs, 1.67x hours 3-4; rest day 2.34x/2.67x
Meal Breaks	1 hour
Rest Breaks	10 minutes for every 4 hours worked
Working hours	8 hours/day, 40 hours/week
Salary Payment Cycle	Monthly
Payroll Taxes	Labor Insurance (12.5%), NHI (5.17%), Labor Pension (6% employer)
Paid Vacation	Up to 30 days based on years of service
Overtime Hours	Max 46 hrs/month (up to 54 with consent, 138 per 3 months)
Night Shift Hours	1.34 times the regular hourly wage
Holidays	15
No Work Days	Sundays

In 2025, Taiwan’s economy grew 8.63% year-over-year — its strongest growth in 15 years — driven by AI-related semiconductor demand and surging exports, with nominal GDP reaching approximately US$884 billion (IMF). Growth in 2026 is forecast to moderate to around 3.7–3.9%, though bullish estimates fueled by continued AI tailwinds range as high as 6.8%. Key sectors driving the economy include electronics manufacturing, information technology, and industrial goods. The high-tech sector, in particular, has cemented Taiwan’s reputation as a critical hub in the global supply chain. Finance, services, and tourism also contribute significantly.

The currency used in Taiwan is the New Taiwan Dollar (NT).

Hiring Laws in Taiwan

In Taiwan, any foreign business looking to hire workers must register a local entity or branch, a process that typically takes around 1 to 2 months to complete. The cost of establishing a business entity can vary depending on the structure but generally ranges between TWD 30,000 to TWD 60,000.

Employment contracts in Taiwan should be in written form and must include key clauses such as job description, salary, working hours, leave entitlements, termination conditions, and dispute resolution.

The labor laws distinguish between employees and contractors, with specific protections and obligations for each. Employees are generally entitled to greater statutory protections compared to contractors.

Minimum Wage in Taiwan

Taiwan has a mandated minimum wage, which as of January 1, 2026 is NT$29,500 per month and NT$196 per hour. This marks the 10th consecutive year of minimum wage increases, benefiting approximately 2.47 million workers. The minimum wage is applicable at the national level. There are no regional or state-level variations as Taiwan follows a unified national wage regime.

Certain categories of workers, such as interns or apprentices, may have different wage arrangements, but these must conform to specific regulations and often require government approval.

In addition to the minimum wage, employers are required to compensate employees with holiday pay for certain mandated public holidays.

Working Hours in Taiwan

Standard working hours are set at 8 hours per day and 40 hours per week. Maximum overtime is 46 hours per month, extendable to 54 hours per month with union or labor-management conference consent (capped at 138 hours over 3 months). Weekday overtime is compensated at 1.34x for the first 2 hours and 1.67x for hours 3-4. Rest day overtime is 2.34x for the first 2 hours and 2.67x beyond that. Work on national holidays or mandatory days off is paid at double the regular rate (2x).

Night shifts are defined as work performed between 10 PM and 6 AM, with employees earning 1.34 times their regular hourly wage during these hours.

The minimum age for employment is generally 15 years, with stringent regulations against child labor. Minors between 15 and 18 years old are subject to specific working conditions and restrictions, such as limited working hours and mandatory breaks.

Payroll and Taxes in Taiwan

Employers in Taiwan are required to make several payroll deductions which include:

• Labor Insurance (LI): Total rate of 12.5% (including 1% employment insurance). Split: employer 70%, employee 20%, government 10%. Insured salary cap: NT$45,800/month.
• Occupational Accident Insurance: 0.12%–0.96% depending on industry, paid entirely by the employer.
• Labor Pension (New System): Employer contributes at least 6% of the employee's monthly salary. Employees may voluntarily contribute up to 6%.
• National Health Insurance (NHI): Premium rate of 5.17%. Split: employer 60%, employee 30%, government 10%.

These contributions provide employees with benefits such as health coverage, injury compensation, maternity benefits, and retirement pensions.

Income Tax Rates

Net Taxable Income (TWD)	Tax Rate
0 – 590,000	5%
590,001 – 1,330,000	12%
1,330,001 – 2,660,000	20%
2,660,001 – 4,980,000	30%
4,980,001 and above	40%

Non-residents are taxed at a flat 18% on salary income and 21% on non-salary income (if staying fewer than 183 days).

Statutory Leave Policies in Taiwan

Employers are required to provide their employees with various leaves:

• Paid Vacation: Up to 30 days, based on years of service.
• Maternity Leave: 8 weeks. Enhanced maternity benefits as of 2026 provide social insurance maternity benefits plus a childbirth subsidy totaling NT$100,000 per child.
• Paternity Leave: 5 days.
• Sick Leave: 30 days per year (paid at half salary for up to first 7 days of sick leave). As of 2026, employers must calculate full-attendance bonus deductions proportionally based on sick leave days taken.
• Adoption Leave: Covered under Family Care Leave.

Taiwan observes 15 public holidays in 2026:

Holiday	2026 Date(s)
New Year's Day	January 1 (Thu)
Lunar New Year	February 14–22 (extended break)
Peace Memorial Day	February 28 (Sat), observed Feb 27–Mar 1
Children's Day	April 4
Tomb Sweeping Day	April 5 (Sun), observed April 3–6
Labor Day	May 1 (Fri), extended May 1–3
Dragon Boat Festival	June 19 (Fri), extended June 19–21
Mid-Autumn Festival	September 25 (Fri), extended Sept 25–27
National Day (Double Ten)	October 10 (Sat), observed Oct 9–11

Employee Benefits in Taiwan

Employees in Taiwan are entitled to a range of social security and other benefit programs including:

• Retirement Benefits: Contributions into the Labor Pension Fund.
• Healthcare Benefits: National Health Insurance (NHI).
• Gratuity: Typically, one month’s salary for each year of service over 25 years.
• Annual Bonuses: Commonly provided as a year-end bonus, but not legally required unless stipulated in employment contracts.

Employee Termination in Taiwan

Taiwan does not follow At-Will Employment laws. The termination process is regulated and requires justification such as gross misconduct, operational changes, or redundancy.

• Notice Period: 10 days for employment up to 1 year, 30 days for employment exceeding 1 year.
• Severance Benefits: Generally, half a month’s salary for each year of employment, but specifics can vary based on employment contracts and company policies.
• Legal Challenges: Employees can challenge wrongful termination through labor unions or the Taiwan Labor Court.

Conditions for Legal Termination

• Performance Issues: Consistent underperformance despite remedial interventions.
• Misconduct: Severe breaches of company policy or criminal activity.
• Operational Changes: Economic redundancy or structural reorganization.

Employers must ensure thorough documentation and adhere to procedural requirements to avoid legal repercussions.