Hire Employees in Taiwan as a Foreign Company Using an EOR.
Taiwan is a global technology powerhouse and Asia's semiconductor capital. RecruitGo handles employment contracts under the Labor Standards Act, Labor Insurance, National Health Insurance (NHI), labor pension contributions, and payroll in TWD so you can hire compliantly without a local entity.
What Is an Employer of Record in Taiwan?
An Employer of Record (EOR) is a locally registered company that legally employs workers in Taiwan on your behalf. RecruitGo's Taiwanese entity becomes the legal employer under the Labor Standards Act (LSA). We sign the employment contract, enroll the employee in Labor Insurance, Occupational Accident Insurance, National Health Insurance (NHI), and the Labor Pension system, manage monthly payroll in TWD, withhold and remit income tax to the National Tax Administration (NTA), and handle all reporting to the Ministry of Labor and Bureau of Labor Insurance.
You retain full control over the employee's work, schedule, and responsibilities. They report to you, work on your projects, and function as part of your team.
Why EOR matters in Taiwan: Taiwan has one of the most complex overtime calculation systems in Asia, with tiered rates for regular overtime (1.34x/1.67x), rest day work (2.34x/2.67x), and holiday work (2x). Monthly overtime is capped at 46 hours. Employer contributions to labor insurance, NHI, occupational accident insurance, and the 6% pension add approximately 14 to 20% on top of gross salary. Attendance records must be maintained to the minute and retained for 5 years. Violations carry fines from NT$20,000 to NT$1,000,000.
Who Should Use EOR in Taiwan?
What It Costs to Hire Through EOR
Taiwan's employer burden adds approximately 14 to 20% on top of gross salary. The largest components are the 6% labor pension (mandatory, no cap), labor insurance (~8% employer share), and NHI (~4.8% employer share including dependent loading).
| Component | Monthly (NT$) | Rate / Basis |
|---|---|---|
| Gross salary | 60,000 | — |
| Labor Insurance (employer, 70% of 11.5%) | ~4,830 | ~8.05% of insured salary |
| Employment Insurance (employer, 70% of 1%) | ~420 | ~0.7% |
| Occupational Accident Insurance (employer, 100%) | ~320 | ~0.21% to 0.93% (varies by industry) |
| NHI (employer, 60% x 5.17% x (1+1.56)) | ~4,840 | ~4.84% including dependent loading |
| Labor Pension (employer) | 3,600 | 6% (mandatory, no salary cap) |
| Total employer cost | ~74,010 | ~123% |
* 2026 minimum wage is NT$29,500/month. Labor insurance and NHI are based on graded salary tables. NHI employer share includes dependent loading (avg 1.56). NHI supplementary premium of 2.11% applies to bonuses. Labor pension has no salary cap. Foreign professionals must earn at least NT$47,971/month. EOR management fee not included.
The Lunar New Year bonus is customary, not mandatory: Most Taiwanese employers pay 1 to 2 months' salary before Lunar New Year. While not legally required, omitting it makes recruitment and retention extremely difficult. Budget for at least 1 month. Your EOR provisions monthly so there are no cash flow surprises.
How Hiring Works Through EOR
You share the role, salary in TWD, location, and start date. We confirm the labor insurance grade, NHI contribution tier, occupational accident rate, and return a full cost breakdown within 24 hours.
We draft an LSA-compliant contract, enroll the employee in Labor Insurance, Employment Insurance, NHI, set up their individual pension account, and register income tax withholding. All registrations completed by day one.
We run monthly payroll in TWD, deduct employee labor insurance (~2.3%), NHI (~1.55%), and income tax. We remit employer contributions for all insurances and 6% pension. We calculate tiered overtime and track monthly hours against the 46-hour cap.
We track minimum wage adjustments, NHI and labor insurance grade table updates, overtime regulation changes, new flexible parental leave rules (January 2026), and LSA amendments. We maintain minute-by-minute attendance records retained for 5 years.
EOR vs Taiwanese Entity vs Contractors
| EOR | Company Limited | Contractor | |
|---|---|---|---|
| Time to first hire | 3 to 5 days | 3 to 8 weeks | Immediate |
| Setup cost | None | USD 3K to 10K+ | None |
| Social insurance | Handled by EOR | Your responsibility | Not applicable (risk if misclassified) |
| Labor Insurance, NHI, pension | Managed by EOR | Your responsibility | Not applicable |
| Overtime tracking (to the minute) | Handled by EOR | Your responsibility (5-year retention) | Not applicable |
| Year-end bonus administration | Provisioned and paid by EOR | Your responsibility | Not applicable |
| Best for | 1 to 20 people, speed | 30+, permanent ops | True project work, independent professionals |
Contractor misclassification risk: If a worker on a service contract operates under subordination, the relationship will be reclassified as employment. This triggers retroactive labor insurance, NHI, pension, income tax withholding, severance exposure, and fines from NT$20,000 to NT$1,000,000 per violation.
Employee Benefits and Leave Entitlements
Customary benefits
Leave entitlements
Termination Rules and Severance
Taiwan requires legal grounds for employer-initiated termination and mandates advance notice and severance pay. Certain employees have enhanced protection (pregnant, on medical leave, recovering from occupational injuries).
Advance notice periods
| Length of service | Notice period |
|---|---|
| 3 months to 1 year | 10 days |
| 1 year to 3 years | 20 days |
| 3+ years | 30 days |
Severance pay (new pension system)
Grounds for termination
Article 11 (with notice + severance): business closure, contraction, losses, or consistent performance failure despite training. Article 12 (immediate, no severance): major breach, deliberate damage, unauthorized absence 3+ consecutive days or 6 days/month, criminal conviction. Employer must act within 30 days of becoming aware.
Probation period
The LSA does not explicitly define probation. A 3-month probation is common practice if stated in the contract. Termination during probation still requires legal grounds and proportional severance.
Working Hours and Overtime
Taiwan has a 40-hour workweek (8 hours/day, 5 days). Employees get 2 days off per 7-day period: 1 mandatory rest day and 1 flexible rest day. Overtime is one of the most complex systems in Asia.
| Scenario | Rate |
|---|---|
| Regular overtime (first 2 hours) | 1.34x hourly rate |
| Regular overtime (hours 3 to 4) | 1.67x hourly rate |
| Rest day work (first 2 hours) | 2.34x (min 4 hours paid) |
| Rest day work (hours 3 to 8) | 2.67x hourly rate |
| National holiday work | 2x + compensatory day off |
| Mandatory rest day (Sunday) | Not permitted except emergencies |
| Monthly overtime cap | 46 hours (54 with agreement, max 138 per 3 months) |
Overtime violations are the most common labor inspection finding in Taiwan. Fines range from NT$20,000 to NT$1,000,000 per violation. Your EOR tracks attendance to the minute, calculates tiered overtime automatically, and ensures monthly hours stay within caps.
Frequently Asked Questions
Total employer cost is typically 114 to 123% of gross regular salary. This includes labor insurance (~8.05%), employment insurance (~0.7%), occupational accident insurance (0.11 to 0.93%), NHI (~4.84% with dependent loading), and labor pension (6%). Additionally, the customary year-end bonus (1 to 2 months) adds ~8 to 17% annualized. The EOR management fee is additional.
No. The Labor Standards Act does not mandate a year-end bonus. However, it is deeply embedded in Taiwanese work culture. Approximately 90% of employers pay at least 1 month's salary before Lunar New Year. Omitting it makes hiring nearly impossible. We recommend budgeting at least 1 month and provisioning monthly.
Under the new system (post-July 2005), the employer deposits 6% of the employee's monthly salary into their individual pension account. The employee may voluntarily contribute an additional 0 to 6% (tax-deductible). The account is fully portable. There is no salary cap on the 6% employer contribution.
Employer-initiated termination requires legal grounds, advance notice (10 to 30 days depending on tenure), and severance pay (0.5 month per year of service, max 6 months, under the new pension system). Immediate dismissal is only for serious misconduct. Protected categories include pregnant employees and those on medical leave.
Taiwan uses a tiered system with different rates for regular overtime (1.34x/1.67x), rest day work (2.34x/2.67x with minimum 4-hour pay), and holiday work (2x plus compensatory day off). Monthly overtime is capped at 46 hours (54 with agreement). Attendance must be tracked to the minute and records retained for 5 years.
Yes, through a service contract. But if the worker operates under subordination, the relationship will be reclassified as employment. This triggers retroactive labor insurance, NHI, pension, income tax, and potential severance liability. Taiwan's Ministry of Labor actively inspects for misclassification.
Taiwan's NHI charges employers based on the employee's insured salary multiplied by the contribution rate, then multiplied by (1 + average number of dependents). The national average is 1.56 dependents. This means employers pay NHI for ~2.56 people per employee, significantly increasing costs beyond the base 5.17% rate.
Typically 3 to 5 business days. Setting up your own company in Taiwan takes 3 to 8 weeks including MOEA registration, tax ID, bank account, and social insurance enrollment. Foreign companies also need Investment Commission approval.
Employer and Employee Contributions
Taiwan's social insurance consists of four mandatory programs. Contributions are calculated on graded salary tables, not exact salary. The government also contributes a share.
Employer contributions
Employee contributions (deducted from salary)
The 6% pension is immediate and portable: Taiwan's labor pension belongs to the employee from day one. The employer deposits 6% monthly into the employee's individual account. The employee retains the full balance regardless of tenure or reason for separation. There is no salary cap.