Payroll in Taiwan runs across four systems overseen by four agencies: income tax withholding, labor and employment insurance, the labor pension, and national health insurance. This guide sets out the 2026 rates, the filing calendar, and the ways to run payroll, whether you use your own entity or outsource it to AYP.
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Running payroll in Taiwan means keeping four systems in step, each with its own agency, base, and deadline. Employers withhold income tax, enroll staff in labor and employment insurance, pay into the labor pension, and register everyone for national health insurance. The rates are stable and well documented, but the reporting sits across separate government portals, mostly in Chinese, which is where foreign employers tend to lose time.
This guide covers what employers are legally required to do: the 2026 contribution rates, the tax treatment, the filing calendar, and the ways to actually run payroll once you have staff on the ground. It sits alongside AYP's wider APAC payroll services and the full payroll country guides.
The table below is the quick reference most employers need. Rates and ceilings are current for 2026.
Four government bodies set the rules. The Ministry of Labor governs employment terms and the minimum wage. The Bureau of Labor Insurance runs labor insurance, employment insurance, and the labor pension. The National Health Insurance Administration runs health cover, and the National Taxation Bureau handles income tax withholding.
Payroll is processed monthly and paid in New Taiwan Dollars. Under the Labor Standards Act, wages are paid at least twice a month at regular intervals unless the employer and employee agree otherwise, so many companies settle on a single monthly payment. The tax year follows the calendar, and the individual income tax return is filed in May of the following year.
The framework rests on four laws: the Labor Standards Act for wages, hours and leave; the Labor Insurance Act and Employment Insurance Act; the Labor Pension Act; and the Income Tax Act. Because each system reports to a different agency on its own portal, payroll in Taiwan is less about complex math and more about keeping several filings in sync.
Every compliant Taiwanese payslip reflects the same set of deductions and employer contributions. Here is what each one requires in 2026.
Employers withhold income tax from salaries each month and remit it to the National Taxation Bureau by the 10th of the following month. Residents are taxed on a progressive scale, reconciled through the annual return filed in May. Non-residents, meaning employees in Taiwan for fewer than 183 days in a calendar year, are withheld at a flat 18%, or 6% where monthly pay is no more than 1.5 times the minimum wage. The resident brackets for 2026 are below.
Labor insurance covers old age, disability, injury and related benefits, and employment insurance covers unemployment and related support. The combined rate is 12.5% of the employee's insured salary (11.5% ordinary labor insurance plus 1% employment insurance), calculated on an insured-salary bracket with a ceiling of NT$45,800 a month. The cost is shared, and occupational accident insurance is charged separately and paid entirely by the employer at a small industry-based rate.
National health insurance is mandatory and set at a general premium rate of 5.17% of the payroll-related insured amount. The cost is split between the employer, the employee and the government, and the employee's share also covers registered dependents. A separate supplementary premium of 2.11% applies to specific income, including the portion of bonuses that exceeds four months' salary in a year.
Under the Labor Pension Act, the employer pays into each employee's individual pension account held at the Bureau of Labor Insurance. This is separate from labor insurance and is not deducted from the employee.
Standard working hours are 8 a day and 40 a week. Overtime is paid at set multipliers of the hourly rate and is capped. Under the Labor Standards Act, overtime is limited to 46 hours a month, which can be extended to 54 hours with employee agreement, provided the total across any three months does not exceed 138 hours.
Taiwan's filings run to different agencies on different dates. The monthly withholding remittance is the one to watch, while insurance premiums are billed by the agencies and settled the following month.
Most payroll problems for foreign employers in Taiwan come from a few recurring issues rather than the base calculations.
The first is the split between what the law requires and what the market expects. Year-end bonuses, and to a lesser extent Mid-Autumn and Dragon Boat Festival gifts, are customary rather than mandatory. They are not a statutory cost, but staff expect them, so leaving them out of the budget creates friction and, in tight labor markets, turnover.
The second is leave. Annual leave increases with tenure, from 3 days at six months of service up to 30 days at 25 years, and Taiwan also has specific leave types such as menstruation leave and family care leave, each with its own pay treatment. Getting the accrual and pay right takes care.
The third is tax residency. The 183-day test decides whether someone is withheld at resident progressive rates or the flat non-resident 18%, and mobile or mid-year hires can flip between the two, which changes the withholding partway through the year.
The fourth is the reporting itself. Labor insurance, health insurance and tax all report through separate government systems that operate mainly in Chinese, so a foreign employer without local support can struggle simply to file on time.
Once you have people to pay, there are three practical ways to handle Taiwanese payroll, and the right one depends on whether you already have a local entity and how many staff you expect to hire.
Building payroll in-house gives full control but needs local expertise, Chinese-language software, and an entity already in place. A local provider takes the processing off your plate while you keep the employer relationship. Outsourced or managed payroll goes further, covering income tax, the insurances, the pension and reporting as a single service.
If you have not set up a Taiwanese entity yet, or you want to hire before you do, an Employer of Record is the usual route, since it lets you employ staff compliantly without your own local company. That is a broader hiring decision than payroll alone, so it is covered separately in AYP's Employer of Record Taiwan service. For a comparison of running payroll internally against outsourcing it, AYP's team has written on in-house versus outsourced payroll.
AYP handles Taiwanese payroll for companies that would rather not build the compliance machinery themselves. The platform runs income tax withholding, calculates and files labor insurance, employment insurance, the labor pension and national health insurance, and produces bilingual payslips, with reporting to each agency on schedule. Pricing is a predictable monthly fee, set out on the pricing page.
The same team supports payroll across 18 Asian markets, so a company scaling from Taiwan into the wider region keeps one provider rather than stitching together local vendors. To see how it maps to your headcount, speak to the AYP team. Employers new to the process can also read AYP's note on the common payroll mistakes businesses make.
On top of gross salary, employers pay roughly 8.75% of insured salary for labor and employment insurance (capped at NT$45,800), at least 6% of monthly wage into the labor pension, and about 3.1% for national health insurance, plus a small occupational accident insurance premium. Total employer on-costs commonly land near 15% to 17% of pay.
Employers withhold income tax monthly and remit it by the 10th of the following month. Residents are withheld on the progressive 5% to 40% scale and reconcile through the annual return filed in May. Non-residents are withheld at a flat 18%, or 6% where monthly pay is no more than 1.5 times the minimum wage.
Under the Labor Pension Act, employers contribute at least 6% of an employee's monthly wage into that employee's individual pension account at the Bureau of Labor Insurance. Employees may add up to a further 6% voluntarily, which is tax deductible.
No. Year-end bonuses are customary rather than legally required. Most employers still pay them and budget for them, so they should be treated as part of payroll planning even though they are not a statutory cost.
Not directly through a standard payroll provider, which needs an entity to file under. Employers who want to hire and pay staff before setting up a company typically use an Employer of Record instead.
With AYP’s expertise, businesses can navigate Malaysia payroll with ease and ensure seamless compliance. Contact us today to learn how we can support your outsource payroll services needs.