Employer of Record (EOR) Taiwan: Hire, Pay & Manage Employees Without a Local Entity
Hire compliantly in Taiwan in as little as five working days. AYP Group is the legal employer for your Taiwanese talent — handling employment contracts, monthly payroll, Labor Insurance, National Health Insurance, Labor Pension, income tax withholding and Labor Standards Act compliance — while you direct the work.
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Quick answer: An Employer of Record in Taiwan (also called an EOR Taiwan) is a Taiwanese entity that legally employs workers on behalf of a client company. The EOR signs the employment contract, runs monthly payroll, files Labor Insurance, National Health Insurance, Labor Pension contributions, and PIT withholding, and bears compliance risk under the Labor Standards Act and Labor Pension Act. You retain day-to-day control of the employee's work. AYP Group operates a directly owned Taiwanese entity with HR specialists in Taipei — not a partner network — giving you a single point of accountability for your Taiwan hiring.
1. Key Takeways
- EOR Taiwan at a glance: Hire Taiwanese or foreign talent in 5–10 working days without setting up a local entity. AYP's Taiwanese entity becomes the legal employer; you direct the work.
- Cost certainty: Total statutory employer cost in Taiwan is approximately 17%–20% of gross salary — Labor Insurance (~8%), National Health Insurance (3.1%), Labor Pension (6%), plus Supplementary NHI on non-regular income (2.11%). Add a transparent flat monthly EOR fee per employee.
- 2026 regulatory shifts to know: Monthly minimum wage rose to NT$29,500 from 1 January 2026 (up 3.18%, the 10th consecutive annual increase). The new Maternity Benefit + Subsidy programme provides NT$100,000 per child from Jan 2026. From April 2026, foreign professionals become eligible for the Labor Pension scheme — increasing the employer cost of hiring expatriates.
- Old vs New Labor Pension system: Severance calculation depends on which system applies. Employees who joined after 1 July 2005 sit under the New System (0.5 month per year, capped at 6 months). Pre-2005 employees may have legacy entitlements under the Old System. Most aggregator EOR pages flatten this.
- Entity vs EOR: Setting up a Taiwanese subsidiary takes 8–12 weeks, requires investment commission approval and a local responsible person. An EOR enables market entry in days without those constraints.
- What to look for in an EOR Taiwan provider: A direct local entity (not a partner), Taipei-based HR specialists, fluency in NHI/Labor Pension administration, and an up-to-date position on the April 2026 foreign worker Labor Pension change.
2. What is an Employer of Record in Taiwan?
An Employer of Record (EOR) in Taiwan is a Taiwanese entity that legally employs workers on behalf of a client company. The EOR signs the employment contract under the Labor Standards Act (勞動基準法), runs monthly payroll in New Taiwan Dollars (NT$ / TWD), files Labor Insurance (勞保), National Health Insurance (健保), Labor Pension (勞退) contributions, and PIT withholding to the National Taxation Bureau, manages employee benefits and bears compliance risk under Taiwanese employment law. The client company retains operational control — assigning work, managing performance, setting strategy.
For international employers, this resolves a structural problem: you cannot legally pay or employ someone in Taiwan without a local entity. Taiwanese law requires salary payments to flow through a registered Taiwanese employer; cross-border payroll from a foreign parent company is non-compliant. Setting up a Taiwanese subsidiary takes 8–12 weeks, requires Investment Commission approval (for foreign-invested entities), a Taiwan-resident responsible person, and ongoing audited financial statements. An EOR Taiwan removes that overhead.
EOR vs PEO in Taiwan. A Professional Employer Organisation (PEO) co-employs workers but only works if you already have a Taiwanese entity. An EOR is the right choice when you have no local entity. AYP offers both — the right model depends on whether you've already incorporated.
3. How AYP's EOR Taiwan Service Works
A clear five-step process — designed so your first Taiwanese hire is contracted, onboarded and on payroll within two weeks.
What makes AYP's process different. Most global EOR providers route Taiwanese employment through a third-party partner. AYP operates a wholly owned Taiwanese entity with HR specialists in Taipei. That means one contract chain, one point of escalation, no partner mark-up, and direct accountability for the nuances Taiwan demands — including the difference between the Old and New Labor Pension systems.
4. EOR Taiwan vs Setting Up a Taiwanese Entity: Strategic Decision Framework
The right choice depends on headcount, time horizon and capital appetite. Use this framework.
Our honest view. EOR is the right answer for most companies entering Taiwan for the first time, or hiring up to around 20 employees. Past that scale — or when you need a Taiwanese entity for VAT invoicing, semiconductor or regulated activities, or M&A continuity — incorporation becomes the better long-term economics. AYP can sequence both: start with EOR, transition to your own subsidiary when the time is right.
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5. Taiwan Employment Law & Compliance Requirements (2026)
Compliant employment in Taiwan is governed by a layered statutory framework. The headline laws:
- Labor Standards Act (勞動基準法) — foundational employment statute covering contracts, working hours, leave, termination, severance and minimum standards.
- Labor Pension Act (勞工退休金條例) — created the New Pension System effective 1 July 2005, replacing the Old System for new hires. Employer must contribute minimum 6% of monthly wage to each employee's individual pension account.
- National Health Insurance Act — mandates universal NHI coverage; employer pays ~3.1% of insured salary plus 2.11% Supplementary NHI on non-regular income above the cap.
- Gender Equality in Employment Act (性別平等工作法) — covers maternity, paternity, family care leave and anti-discrimination.
- Minimum Wage Act (最低工資法) — governs the annual minimum wage review and adjustment.
- Personal Data Protection Act (PDPA) — governs employee data handling and cross-border transfer.
Minimum wage (effective 1 January 2026)
National flat rate. Unlike Vietnam or Indonesia, Taiwan does not operate regional or sectoral minimum wages. The rate applies uniformly across Taipei, Hsinchu, Taichung, Kaohsiung, and all other cities and counties. The 2026 increase marks the 10th consecutive annual hike — cumulative increase of 47.4% on the monthly rate since 2016.
Statutory employer contributions (2026)
April 2026 change to foreign worker pension: From April 2026, foreign professionals become eligible for the Labor Pension scheme, requiring the 6% employer contribution that previously applied only to Taiwanese citizens. Budget for this if hiring expatriates beyond Q1 2026.
PIT brackets (annual taxable income, NT$, 2026)
Mandatory leave entitlements
- Annual leave: Tenure-scaled: 3 days (6–12 months), 7 days (1–2 years), 10 days (2–3 years), 14 days (3–5 years), 15 days (5–10 years), then +1 day per additional year up to a cap of 30 days
- Sick leave: 30 days regular sick leave per year at 50% pay; up to 1 year unpaid sick leave for hospitalisation. Employers prohibited from adverse action for ≤10 days sick leave per year
- Maternity leave: 8 weeks paid (typically 4 before / 4 after birth) under the Gender Equality in Employment Act
- Paternity leave: 7 paid days
- Menstrual leave: 1 day per month (counted within sick leave allowance above 3 days/year)
- Family care leave: Up to 7 days per year (unpaid) to care for family members
- Parental leave: Up to 2 years unpaid leave for children under 3 (new from 2026: daily flexible parental leave option)
- Public holidays: 11 statutory holidays per year (Lunar New Year, 228 Memorial, Labour Day, etc.)
13th-month / year-end bonus. Not legally mandated in Taiwan — but a year-end bonus (年終獎金) equal to 1–2 months' salary is near-universal market practice, particularly around Lunar New Year. Companies in technology and finance often pay 2–4 months. AYP itemises this in your quote so you can choose to include it upfront.
Working hours. Standard 40-hour week (8 hours × 5 days) under the Labor Standards Act. Maximum 12 hours per day including overtime. Overtime cap: 46 hours per month (extendable to 54 with union or labour-management conference consent, max 138 over 3 months). Overtime premium: 1.34× (first 2 hours), 1.67× (next 2 hours). Two rest days per 7-day week (one fixed, one flexible).
New 2026 maternity benefit. Effective 1 January 2026, the Ministry of Labor's expanded Maternity Benefit and Subsidy programme provides Labor Insurance maternity benefits plus a childbirth subsidy totalling NT$100,000 per child. This is funded by the social insurance system, not directly by the employer.
6. Cost of Hiring in Taiwan: True Employer Cost (2026)
This is where most global EOR providers leave you guessing. We don't. Here is a fully loaded cost example for a Taiwanese citizen in Taipei earning a gross monthly salary of NT$80,000.
Foreign worker cost change from April 2026. Previously, foreign professionals were exempt from the Labor Pension scheme. From April 2026, the 6% employer pension contribution applies to them as well. For an expat earning NT$150,000 monthly, this adds NT$9,000 to monthly cost (NT$108,000 annually). AYP advises clients to factor this into 2026 expat budgets.
What this excludes. Optional employer-funded benefits (private medical top-up, allowances, equity, group life), bonuses beyond customary year-end, and one-off costs (Work Permit fees, ARC fees, relocation). AYP itemises every line in your quote.
7. Work Permits & Visas for Foreign Employees in Taiwan
To employ a foreign national in Taiwan, two documents must be sequenced correctly. The Ministry of Labor's Workforce Development Agency and the National Immigration Agency administer these.
April 2026 pension change. From April 2026, foreign professionals on Work Permits become eligible for (and required to participate in) the Labor Pension scheme. Employer cost increases by 6% of insured salary for affected expatriates. AYP handles registration and contribution automatically.
8. Termination & Severance in Taiwan
Taiwan is a moderately complex termination jurisdiction. Lawful grounds are listed in Articles 11 and 12 of the Labor Standards Act — including business closure, structural redundancy, sustained underperformance, and serious misconduct. Termination without valid cause exposes the employer to reinstatement orders, back-wages and damages at the labour court.
Notice periods depend on tenure:
- Under 3 months' service: 3 days
- 3 months – 1 year: 10 days
- Over 1 year: 30 days
Severance under the New Labor Pension System (post-1 July 2005)
Old vs New System nuance. Employees with service spanning the 1 July 2005 transition may have split entitlements: Old System severance (1 month per year) for pre-July 2005 service, plus New System severance (0.5 month per year, capped at 6 months) for post-July 2005 service. AYP calculates the correct hybrid where this applies — a calculation most aggregator providers get wrong.
Protected categories. Certain employees are protected from termination, including those on maternity leave, occupational injury recovery, and in some cases family care leave. Dismissals during these periods are only allowed under strict statutory conditions.
How AYP protects you. Our HR advisors structure terminations to fit lawful grounds under Articles 11/12, draft compliant termination notices, calculate severance using the correct Old/New System hybrid where applicable, manage Labor Insurance and NHI deregistration, and complete final tax clearance. For foreign hires, we coordinate Work Permit cancellation and ARC return.
9. Why AYP Group is the Best EOR Taiwan Provider
Comparing EOR Taiwan providers, the meaningful differences come down to four factors. Here is how AYP performs against each.
Our three commitments to you
- No Uncertainty — clear advisory at every step from a named HR specialist in Taipei, not a generic ticketing queue.
- No Penalty — we hold the compliance liability and stand behind every Labor Insurance, NHI and Labor Pension filing.
- No Hidden Costs — one transparent fee structure, with Supplementary NHI and year-end bonus itemised before you sign.
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10. Get Started with EOR Taiwan Today
You have three options.
Book a 30-minute call — Speak with a Taipei-based HR specialist about your role, timeline and budget. We'll send a transparent quote within one working day.
Read the Taiwan Hiring Cost Guide (2026) — Full breakdown of Labor Insurance, NHI, Labor Pension, Supplementary NHI, PIT brackets and indicative salaries by function — including the April 2026 foreign worker pension change.
Compare AYP vs other EOR Taiwan providers — See how we stack up against Deel, Remote, Multiplier, Mercans and Papaya Global on price, coverage and compliance.
Questions?
We're here to help
For a Taiwanese citizen with no visa requirement, AYP can have the employee contracted, registered with the Bureau of Labor Insurance and NHI, and on payroll in 5–10 working days from quote acceptance. Foreign hires requiring a Work Permit + ARC take 6–10 weeks. Gold Card applicants can sometimes complete the entire process in 4–6 weeks.
Yes. AYP sponsors Work Permit and ARC applications as the registered Taiwanese employer. We also support Gold Card applications for highly skilled professionals. From April 2026, foreign professionals are required to participate in the Labor Pension scheme (6% employer contribution).
An EOR is the legal employer when you have no Taiwanese entity. A PEO co-employs workers, but only if you already have a registered Taiwanese subsidiary. AYP offers both, and advises which fits your stage.
All Taiwanese employees hired through AYP after 1 July 2005 are covered by the New Labor Pension System under the Labor Pension Act. AYP contributes a minimum 6% of monthly wage to each employee's individual pension account held with the Bureau of Labor Funds. The account is portable: it follows the employee regardless of employer changes. Employees may also voluntarily contribute up to 6% of their salary, deductible from taxable income.
Pricing varies by provider and seniority of role. Transparent flat monthly fees in the market typically range from US$400–US$750 per employee per month. AYP quotes per role based on complexity and scope. Statutory employer costs (Labor Insurance, NHI, Labor Pension, Supplementary NHI) are passed through at cost.
Not legally mandated, but near-universal market practice. A year-end bonus (年終獎金) of 1–2 months' salary, paid around Lunar New Year, is expected by nearly all Taiwanese employees. Technology and finance sector employers often pay 2–4 months. AYP itemises this in your monthly billing so you can choose to include it upfront.
Taiwan's second-generation NHI introduced a Supplementary Premium of 2.11% on non-regular income — including year-end bonuses, performance pay and dividend income above 4× the insured monthly salary. This is an employer-paid cost that global EOR providers routinely miss when quoting Taiwan pricing, leading to year-end surprises. AYP surfaces it in the original quote.
Yes — and this is increasingly important. Taiwan's National Taxation Bureau and Ministry of Labor have intensified scrutiny of contractor misclassification. If your contractor works fixed hours, reports to a manager and uses your tools, an audit will likely re-classify them as an employee with back-payment liability for Labor Insurance, NHI, Labor Pension and PIT. AYP can convert them cleanly via EOR.
Yes, end-to-end. We structure terminations to fit lawful grounds under Articles 11/12 of the Labor Standards Act, draft compliant termination notices, calculate severance under the correct Old/New Labor Pension System (or the hybrid where applicable), manage social insurance deregistration and final PIT clearance, and represent the employer in any labour conciliation.
Technology, semiconductors, financial services, manufacturing, professional services, pharmaceuticals and e-commerce. We have placed employees across Taipei, New Taipei, Taoyuan, Hsinchu (Science Park), Taichung, Tainan and Kaohsiung.
More questions?
We're here to help. Whether it's pricing details, country-specific compliance, or how we compare to other EORs, let's talk.
