Effortless Hiring in Taiwan

Employment Contracts

• Taiwanese law mandates that all employees receive a written employment contract. This contract must detail essential terms such as:
• Job responsibilities.
• Compensation.
• Working hours.
• Leave entitlements.
• The Labor Standards Act (LSA) governs these contracts and requires that they be provided within 30 days of employment commencement. While both oral and written contracts are permissible, written agreements are highly recommended to prevent disputes.

Probationary Period

• Employers may implement a probationary period typically lasting up to three months. For certain roles, such as managerial positions, this period can extend to six months. During the first month of probation, either party can terminate the employment without notice. After the first month, a minimum notice period of seven days is required unless otherwise specified in the employment contract.

Payroll Frequency

• Employees are generally paid on a monthly basis, with specific pay dates agreed upon in the employment contract. Employers must provide itemized pay statements detailing wages and any deductions.

Minimum Wage

• As of 2024, the monthly minimum wage in Taiwan is set at NT$27,470, and the hourly minimum wage is NT$183. These rates are subject to periodic review by the government.

Overtime

• Standard working hours are typically 40 hours per week. Overtime is compensated as follows:
• At least 1/3 above the regular hourly rate for the first two hours.
• At least 2/3 above for subsequent hours.
• Employers must obtain employee consent for overtime work and adhere to legal limits on overtime hours.

Employee Contributions

1. Pension Fund: Employees contribute between 12.5% and 13% of their gross salary to either the National Pension System or a Private Pension System.
2. Income Tax: Taiwan employs a progressive income tax system with rates ranging from 5% to 40% depending on income levels.

Employer Contributions

1. Social Security: Employers contribute approximately 14.1% of the employee's gross salary to social security programs.
2. Pension Contributions: Employers may also be required to contribute to employee pension schemes based on sector-specific regulations.

Types of Leave in Taiwan

1. Annual Leave

• Employees are entitled to paid annual leave based on their cumulative working years:
• 6 months to less than 1 year: 3 days.
• 1 to 2 years: 7 days.
• 2 to 3 years: 10 days.
• 3 to 5 years: 14 days.
• 5 to 10 years: 15 days.
• Over 10 years: An additional day per year up to a maximum of 30 days.

2. Public Holidays

• Taiwan observes 13 statutory public holidays each year. If a public holiday falls on a weekend, a compensatory day off is provided.

3. Sick Leave

• Employees are entitled to sick leave benefits covering up to 30 days per year at half pay if not hospitalized. In cases of hospitalization, employees may receive full pay for up to one year within two years.

4. Maternity Leave

• Female employees are entitled to 98 days of maternity leave, divided into 30 days antenatal and 68 days postnatal. The social security system provides benefits during this period.

5. Paternity Leave

• Male employees are entitled to 5 days of paid paternity leave for each child born.

Mandatory Benefits

1. Labor Insurance: Provides coverage for disability, old-age pensions, and survivor benefits.
2. National Health Insurance (NHI): Offers comprehensive health coverage to all employees and their dependents.

Notice Period

• The required notice period for termination depends on the length of service:
• Less than 3 months: 3 days notice.
• Between 3 months and less than 1 year: 10 days notice.
• More than 1 year: At least 30 days notice.

Severance Pay

• Employees dismissed without just cause are entitled to severance pay calculated as follows:
• Half a month's average wages for each full year of employment.

Dismissal Procedures

• Employers must have valid grounds for termination, such as misconduct or economic necessity. The process must comply with the LSA, including providing written notice and allowing the employee an opportunity to respond.