Employer of Record (EOR) Taiwan: Hire, Pay & Manage Employees Without a Local Entity

• EOR Taiwan is a locally registered company that legally employs your staff so you can hire in Taipei, Hsinchu, Taichung or Tainan without setting up a Taiwan subsidiary or branch (which takes 2–4 months)
• Total employer load: ~17–20% (Labor Insurance ~7.7% capped + Labor Pension 6% + NHI ~3.1% + Employment Insurance ~0.7%) — middle of the APAC range
• Labor Pension is separate from Labor Insurance — the new-system 6% employer contribution to the employee’s portable individual account is a unique Taiwan feature most overseas employers misunderstand
• Statutory framework: Labor Standards Act (LSA), Labor Pension Act 2005, National Health Insurance Act, Employment Insurance Act, Gender Equality in Employment Act
• Taiwan is the world capital of semiconductor manufacturing — TSMC, MediaTek, UMC, ASE and a deep fabless/foundry ecosystem. EOR Taiwan is the fastest route to onboard IC design engineers, hardware engineers and supply-chain managers
• 2026 regulatory shifts to know: Monthly minimum wage rose to NT$29,500 (10th consecutive annual hike), hourly to NT$196, Maternity Benefit raised to NT$100,000 per child, foreign-worker pension contribution changes coming in April 2026
• Severance under the new Labor Pension system = 0.5 month per year of service, capped at 6 months total. Old LSA system (pre-1 July 2005) is more generous but only applies to grandfathered employees

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An Employer of Record in Taiwan (EOR Taiwan) is a locally registered company that legally employs your staff on your behalf. Your company directs the work, sets the salary, and manages the team day-to-day. The EOR holds the Mandarin-language employment contract, runs monthly payroll, makes Labor Insurance contributions, Labor Pension contributions (the mandatory 6% to the employee’s portable account), National Health Insurance (NHI) contributions, Employment Insurance contributions, monthly income tax withholding through the Ministry of Finance, Alien Resident Certificate (ARC) and Work Permit sponsorship through the Workforce Development Agency and National Immigration Agency, and full compliance with the Labor Standards Act (LSA) and Labor Pension Act.

You get to hire in Taiwan in days instead of the 2–4 months it takes to register your own Taiwan subsidiary or branch. The EOR carries the statutory liability — labour inspection, BLI audits, NHI compliance — and you focus on the work.

For employers who already have a Taiwan entity and want HR and payroll outsourced, see our Professional Employer Organisation (PEO) services.

Six steps from request to first payroll:

1. Define the role and salary — job title, monthly salary, working hours, leave terms, start date
2. Sign the AYP EOR service agreement — AYP becomes the legal Employer of Record in Taiwan for your hire
3. Issue the Mandarin-language employment contract — compliant with the LSA, signed by AYP and the employee
4. Register with BLI, NHIA and Ministry of Finance — AYP enrols the employee in Labor Insurance, Labor Pension and NHI on day one, and registers the tax record with the local tax bureau
5. Sponsor Work Permit and ARC for foreign hires — AYP submits the Work Permit application to the WDA and supports the ARC application with the NIA. Employment Gold Card holders can be hired directly without a separate Work Permit
6. Run monthly payroll and statutory remittances — wages, income tax withholding, Labor Insurance, Labor Pension, NHI, Employment Insurance, plus the annual withholding statement (扣繳憑單)

You direct the work daily; AYP holds the legal employer relationship and absorbs the compliance burden.

The short version: if you’re hiring fewer than thirty people in Taiwan, or you need someone working before quarter-end, EOR is the route. If you’re committing to Taiwan as a customer-facing entity with local invoicing or building manufacturing operations near Hsinchu, a subsidiary is the right long-term move. Many of our clients start with EOR and transition once headcount and revenue justify their own entity.

Taiwan as the Semiconductor Capital

Taiwan is the world capital of semiconductor manufacturing. TSMC, MediaTek, UMC, ASE and a deep fabless/foundry ecosystem make Hsinchu Science Park and Taichung Central Science Park the densest concentration of IC design and chip-manufacturing talent globally. Many of our EOR Taiwan hires are foreign tech firms onboarding IC designers, hardware engineers, process engineers, supplier-relationship managers and customer-success staff to interface with the local supply chain. EOR Taiwan gives you the fastest route into this talent pool without setting up a subsidiary.

Taiwanese employment is governed primarily by the Labor Standards Act (LSA) and the Labor Pension Act (which created the new portable pension system from 1 July 2005). Workplace safety: Occupational Safety and Health Act. Health insurance: National Health Insurance Act. Gender equality and parental leave: Gender Equality in Employment Act. Tax: Income Tax Act, enforced by the Ministry of Finance and local tax bureaus. Labour policy is set by the Ministry of Labor; social insurance is administered by the Bureau of Labor Insurance and the National Health Insurance Administration.

Minimum Wage (Effective 1 January 2026)

Taiwan’s monthly minimum wage rose to NT$29,500 from 1 January 2026 (up from NT$28,590 in 2025) — the 10th consecutive annual increase. The hourly minimum rose to NT$196 (up from NT$190). The rates apply to all employees regardless of nationality and are set annually by the Minimum Wage Commission.

Statutory Employer Contributions (2026)

Labor Pension Explained (The Taiwan-Specific Feature Most Overseas Employers Miss)

Labor Insurance is the general social insurance covering work injury, disability, death and old-age — funded jointly by employer (~7.7%), employee (~2.2%) and government (~10%). The Labor Pension is a separate retirement savings system introduced on 1 July 2005, with the employer contributing 6% of monthly wages to the employee’s individual portable pension account. Labor Pension is mandatory for Taiwan nationals. Employees may voluntarily contribute up to an additional 6% (with tax benefit). The pension is portable — when an employee changes employers, the new employer continues contributing to the same individual account.

Why this matters: many overseas employers think Labor Insurance ~7.7% is the entire pension cost. It’s not. Labor Pension 6% sits on top. AYP applies both correctly.

PIT Brackets (Annual Taxable Income, NT$, 2026)

Bands are inflation-indexed and may be adjusted annually. Tax is withheld monthly using the income tax withholding tables, with annual reconciliation via the May filing. Non-residents (in Taiwan fewer than 183 days in a tax year) are taxed at flat rates: 18% for monthly salary above 1.5× the minimum wage, or 6% below that threshold. AYP calculates monthly withholding, files monthly withholding reports (扣繳憑單) to the tax bureau, and issues the annual withholding statement to the employee.

Mandatory Leave Entitlements

• Annual leave (Article 38 LSA): 3 days at 6 months service, 7 days at 1 year, 10 days at 2 years, 14 days at 3 years, 15 days at 5 years, 16+ days at 10 years (+1 per year up to 30 days at 25 years)
• Sick leave: 30 days/year at half pay; unlimited unpaid hospitalisation leave (up to 2 years over 2 years)
• Maternity leave: 8 weeks paid (full pay; half pay if <6 months service). 2026 update: Maternity Benefit raised to NT$100,000 per child
• Paternity leave: 7 days paid
• Marriage leave: 8 days paid
• Bereavement leave: 3–8 days paid depending on relation
• Public holidays: 11–12 days per year

Working Hours

Standard work week is 40 hours, capped at 8 hours/day. Hazardous work capped at 7 hours/day and 42 hours/week. Minimum 1-hour break after 5 consecutive hours. The “one mandatory rest day + one regular day off” rule (一例一休) means each 7-day cycle must include one mandatory rest day plus one regular day off — with different overtime premiums on each.

Worked Example 1 — Mid-level hire (NT$50,000/month)

Worked Example 2 — Senior tech / IC design (NT$200,000/month)

Key 2026 detail: Labor Insurance and Employment Insurance cap at NT$45,800 monthly insured wage, so they don’t scale with senior salaries. Labor Pension (6%) scales with full wages but caps at NT$150,000. NHI scales with a higher ceiling (NT$219,500). For senior IC design and engineering hires above NT$150,000/month, the effective employer percentage compresses to ~10% — Taiwan ranks among the most cost-efficient APAC markets for senior tech hires.

Taiwan vs. APAC peers: Taiwan’s ~17–20% load sits in the middle of APAC — heavier than Hong Kong’s 5% MPF cap and the Philippines’ 12–14%, lighter than Vietnam’s 24%+ combined SI/HI/UI plus Trade Union fee. The structure is unique in that Labor Insurance + Employment Insurance cap at NT$45,800 wages while Labor Pension scales on full wages capped at NT$150,000 — so the effective percentage compresses as salary grows. For senior IC design and engineering hires (NT$150,000+/month), Taiwan ranks among the most cost-efficient APAC markets on the statutory line.

To hire a foreign national in Taiwan, the employer obtains a Work Permit through the Workforce Development Agency (WDA), and the foreign worker then applies for an Alien Resident Certificate (ARC) through the National Immigration Agency. Senior professionals can use the Employment Gold Card route — an integrated four-in-one document combining work permit, resident visa, ARC and re-entry permit. When you use an EOR Taiwan, AYP is the registered sponsor — your overseas company does not apply directly. See our Asia Mobility service for standalone visa support in markets where AYP is not your EOR.

Visa Categories

The Employment Gold Card is the fast-track route for senior professionals in eight target fields (technology, economics, education, culture, sports, finance, law, architecture). The holder applies independently — no employer sponsorship needed at the application stage — but an EOR can hire them once they arrive without re-applying for a separate Work Permit.

April 2026 Foreign-Worker Pension Change

From April 2026, certain categories of foreign workers in Taiwan become subject to mandatory Labor Pension contributions on a phased basis. Previously Labor Pension was Taiwan-nationals-only. AYP applies the new framework on every affected hire from the effective date.

Termination in Taiwan requires a legitimate reason and proper procedure. Disputes go through the labour inspection authority of the relevant city/county, then mediation via the Ministry of Labor, with Labor Court as the final route. The Labor Standards Act classifies termination triggers into specific Articles. AYP absorbs this legal exposure on your behalf, manages the notice period, calculates statutory severance correctly under the appropriate pension system, and documents the exit in line with the law.

Termination Triggers Under Taiwan’s Labor Standards Act

Notice Period Requirements

Either party may pay wages in lieu of notice.

Severance Under the New Labor Pension System (Post-1 July 2005)

For employees under the new pension system (which applies to all Taiwan nationals hired after 1 July 2005), statutory severance is 0.5 month’s wages per year of service, capped at 6 months total. Applies on dismissal for redundancy, business closure, or other “without-fault” termination.

Employees grandfathered into the old LSA system (hired before 1 July 2005 and never opted into the new system) accrue at a higher rate (1 month’s wages per year, no cap). AYP applies the correct system based on each employee’s history.

Final Pay Components for Taiwan Employees

When a Taiwan employee exits, AYP settles every line below in a single final-pay calculation:

• Outstanding wages up to and including the last day of work
• Payment in lieu of notice if applicable (10, 20 or 30 days)
• Payment for untaken annual leave at the daily wage rate (capped at 30 days max)
• Severance Pay under the new Labor Pension Act system — 0.5 month per year, capped at 6 months
• OR Severance under the old LSA system — 1 month per year, no cap — for grandfathered employees
• Pro-rated year-end bonus / 13th-month per contract or company custom (statutorily voluntary in Taiwan)
• Labor Pension new system balance — remains in the employee’s individual portable account (administered by BLF); not paid out on exit
• Labor Insurance settlement — coverage ends; employee may continue voluntarily
• NHI termination — coverage ends; employee transitions to self-paid or new-employer coverage
• Final income tax withholding adjustment — annual reconciliation, with the Ministry of Finance withholding tax return (扣繳憑單) issued to the employee
• For foreign employees: coordination with the Ministry of Labor on Work Permit cancellation and NIA on Alien Resident Certificate

Legitimate Grounds for Termination

The Labor Standards Act allows termination for misconduct (after due process — written warnings, except for grave misconduct under Article 12), poor performance (with documented coaching and prior warnings), redundancy or business closure (with severance, prior notice and report to the labour authority for mass layoffs), and frustration of contract. Termination during pregnancy or work-injury recovery is generally prohibited. AYP manages documentation, warning process and severance calculation end to end.

Four things our clients tell us they don’t get from generic global EORs:

1. Direct Taiwan entity. AYP operates through our own Taiwan company, not a sub-contracted nominee. Faster Work Permit and ARC approvals, cleaner Bureau of Labor Insurance audit trail, single point of accountability.
2. Transparent, predictable pricing. A clear monthly fee per employee with no hidden setup fees, no per-filing surcharges, no surprise compliance costs. See our pricing page.
3. One partner, one contract, all of APAC. Hire in Taiwan today and Singapore, Hong Kong, Malaysia, Vietnam, Indonesia, the Philippines or Thailand next quarter under the same contract.
4. 2026 reform-ready. AYP applied the NT$29,500 monthly minimum wage and NT$196 hourly rate from day one of January 2026, has the NT$100,000 Maternity Benefit framework integrated, and is ready for the April 2026 foreign-worker pension change. Registered with the Bureau of Labor Insurance and the NHIA, recognised by the Workforce Development Agency for Work Permit and ARC sponsorship including the Employment Gold Card route. See About AYP.