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Global Payroll Team
Written by Global Payroll Team
Last updated May 1, 2026
Expert Reviewed
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Employer of Record/PEO and Payroll Services in Taiwan

Taiwan remains one of the world’s leading exporters and a top global player in semiconductors, electronics, ICT, and advanced manufacturing. It continues to deepen economic ties across Asia-Pacific markets and remains a major supplier of goods across the industrial spectrum, supported by a highly developed technology ecosystem and strong trade connectivity.

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Doing Business in Taiwan

Taiwan continues to offer a strong industrial base, advanced supply chains, and targeted investment support for strategic sectors. The government has maintained programs aimed at encouraging domestic investment, SME growth, and industrial upgrading, while Taiwan’s cluster development, innovation capability, and technology ecosystem remain key advantages for foreign investors.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Taiwan is straightforward. Choose how your company operates from a range of entity types which suit your individual circumstance.

Banking

Banking Hours: Monday to Friday from 9:00 am-3:30 pm

Working Week

The standard working week is from Monday to Friday from 9:00 am-6:00 pm

Labor Law

The most important legislation addressing employment issues is the Labor Standards Act (LSA), which regulates the terms and conditions of employment. With limited exceptions, it applies broadly across industries and occupations, including foreign nationals working in Taiwan.

Main Industries

Electronics, semiconductors, petroleum refining, chemicals, textiles, iron and steel, machinery, food processing, vehicles, consumer products and pharmaceuticals

GDP Growth

7.71%

Dates & Numbers

yyyy/mm/dd

Official State Name

The Republic of China

Population

23.3 million

Capital

Taipei

Major Languages

Mandarin Chinese

Currency

New Taiwan Dollar NT$

Internet Domain

.tw

International Dialing Code

+886

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Taiwan
Taipei, TW
3:31 pm, May 6, 2026
25°C
broken clouds
55 %
Wind Gust: 0 mph
Clouds: 75%
Sunrise: 5:14 am
Sunset: 6:26 pm

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Payroll

Companies who operate multi-country payroll should take note that, in Taiwan, it is common to reward employees with bonuses. These details are usually specified in the employer’s work rules or employment policies.

It is acceptable to provide employees with online payslips

Payslip

Payroll reports must be kept for 5 years

Reports

10 days of annual leave for a service of 2 to 3 years

Annual Leave

30 days of ordinary sick leave per year with 50% of pay

Sick Leave

8 weeks of paid maternity leave and 7 days of paid pregnancy checkup accompaniment and paternity leave

Maternity & Paternity Leave

10 days notice for 3 months to 1 year of employment

Employee Termination

This is generally paid during the lunar new year

13th month salary

29,500 TWD per month

Minimum Wage

Up to 2 hours of overtime are paid at 1.34 times the regular hourly wage, with higher rates applying thereafter

Overtime

0.5 month salary for each year of employment under the Labor Pension Act, capped at 6 months, while legacy rules may differ

Severance Pay

PEO Taiwan

Mercans PEO (Professional Employer Organization) services in Taiwan provide a comprehensive HR outsourcing solution for foreign companies to establish a local presence, compliantly hire and manage employees, handle HR, payroll, benefits, tax compliance, and other administrative tasks, while reducing costs and administrative burden.

Through our PEO in Taiwan, we provide services that are flexible and cost-effective for companies seeking to outsource their HR and payroll processes. As a Professional Employer Organization, Mercans offers a range of services including employee benefits, payroll administration, and compliance with Taiwan employment laws. By entrusting their HR and payroll needs to Mercans, companies can focus on their core business activities and ensure a smooth and efficient HR operation.

Partnering with our PEO in Taiwan presents the fastest and most efficient way to enter the Taiwan market.

Partnering with our Taiwan PEO presents the swiftest and most economical avenue to step into the Taiwan market.
Contact us to explore how PEO Taiwan solutions from Mercans can support your seamless expansion!

Benefits of Hiring an Employee through a PEO Taiwan

Are you planning to expand your business operations into Taiwan? Collaborating with a Professional Employer Organization (PEO) in Taiwan can provide a strategic advantage by simplifying your entry into the market while ensuring full compliance with local employment laws. Here are the top benefits:

Fast-Track Market Entry

Hiring through a PEO in Taiwan enables you to quickly establish a workforce without the need to set up a local legal entity. This accelerates your market entry, allowing you to begin operations and generate revenue sooner.

Compliance with Local Regulations

Taiwan’s labor laws and tax regulations can be intricate and subject to change. A local PEO is well-versed in these regulations and ensures your employment practices remain fully compliant, reducing legal risks and penalties.

Cost-Efficient Expansion

Setting up a company in Taiwan involves significant administrative and legal expenses. A PEO offers a more economical solution by handling payroll, benefits, and employee onboarding, minimizing your overhead costs.

Reduced Legal and Operational Risk

By leveraging a PEO’s local expertise, your company avoids common pitfalls related to employee classification, termination procedures, and benefit requirements. This risk mitigation helps maintain a stable and compliant operation.

Access to Skilled Local Talent

A PEO in Taiwan can connect you with highly qualified local professionals who understand the regional business landscape. This access is crucial for building a team that can drive your success in the Taiwanese market.

Streamlined HR and Payroll

Managing HR functions in a new country can be complex. A PEO centralizes and simplifies these tasks, covering everything from payroll processing to benefits administration, so you can stay focused on strategic priorities.

Scalable Workforce Management

As your business grows in Taiwan, your PEO can easily scale your workforce up or down based on your needs. Whether you’re testing the market or expanding aggressively, this flexibility supports sustainable growth.

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Tax and Social Security

Income tax is levied on Taiwan-sourced income of both resident and non-resident individuals except where exempt. The compulsory social security programs include the Labor Insurance Program, National Health Insurance Program and Labor Pension Program.

Tax

In addition to regular income tax calculations, Taiwan also imposes income basic tax on certain resident taxpayers. Resident individual income tax rates are progressive, while the standard corporate income tax rate remains 20%.

20%

Corporate Income Tax

40%

Personal Income Tax

5%

Sales Tax

5%

VAT

Social Security

Employers must make social security contributions including to National Health Insurance, Labor Insurance and Labor Pension. Employers in Taiwan may also need to contribute to employment insurance and occupational accident insurance depending on the employee and insured category.

Varies

Social Security Rate

Varies

Social Security Rate for Employers

Varies

Social Security Rate for Employees

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Employment Law

The law distinguishes between different categories of worker such as employees and independent contractors. Statutory employment rights are enjoyed by employees, whether fixed-term or permanent, but not by independent contractors.

Employment Agreement

Typically, employment contracts are regarded as permanent employment contracts unless they specify that they are fixed-term. Employment contracts that relate to temporary or short-term work or seasonal work are usually considered fixed-term contracts.

Working condition

Overall work hours must not exceed 12 hours per day. Employers must comply with rules on overtime, rest days, and attendance records under the Labor Standards Act.

Leaves

Paid holiday entitlement is based on length of service with the employer. The method for calculating annual leave periods may be agreed between employer and employee, but statutory minimum entitlements under the Labor Standards Act must be respected.

Employment termination

Any termination of an employment contract must be according to the circumstances specifically allowed by law, either termination with notice and severance pay or termination without notice where lawful cause exists.

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10 days

Minimum notice period for terminating an employee

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varies

Total number of Public Holidays

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40

Working hours per week

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Up to 8 days

Total number of days for Compassionate & Bereavement Leave

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Immigration

Foreign nationals who intend to live in Taiwan for longer than six months must generally apply for a Resident Visa and comply with Taiwanese immigration and employment permit requirements.

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Residency permits

A Resident Visa is normally a single entry visa, valid for three months from the date of issue. Visa holders must enter Taiwan before the expiration date indicated on the visa, after which they can apply for the relevant resident certificate and complete local registration formalities.

Work Permit validity

Up to 3 years, and up to 5 years for certain designated foreign professionals

Required Documents

Passport that is valid for a minimum of six months after entry

Two passport-sized color photographs with a white background taken within the last six months

An approved work permit

A health certificate issued within the past three months, where required

Additional documents regarding the employee’s profession

Identification documents for a spouse or children who accompany the employee

Compliant, reliable, error-free and touchless payroll in Taiwan

Build the best team and hire top talent compliantly in Taiwan. Get in touch with Taiwan payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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    FAQs

    What is an Employer of Record (EOR) in Taiwan and how does it work for foreign companies?

    An Employer of Record in Taiwan enables international companies to hire local employees without establishing a legal entity. The EOR becomes the legal employer, managing contracts, payroll, taxes, benefits, and compliance with Taiwanese labor and employment laws.

    Why should businesses use an EOR instead of establishing a legal entity in Taiwan?

    Partnering with an EOR allows companies to expand into Taiwan quickly and cost-effectively. It eliminates the need for entity registration, reduces administrative work, and ensures full compliance with local employment and tax regulations.

    How does payroll outsourcing in Taiwan ensure compliance with tax and labor laws?

    Mercans’ payroll outsourcing in Taiwan ensures accurate salary payments, correct tax deductions, and statutory social insurance contributions. All payroll operations comply with Taiwanese labor standards and tax laws, ensuring transparency and regulatory compliance.

    Can an Employer of Record in Taiwan hire employees and manage work permits for international companies?

    Yes. An EOR in Taiwan can hire both local and foreign employees, manage visa and work permit applications, and ensure compliance with Taiwanese immigration and employment requirements.

    What are the main benefits of using EOR and payroll services in Taiwan for global expansion?

    Key benefits include quick market entry, reduced setup and administrative costs, full compliance with local laws, access to expert HR and payroll support, and flexibility to scale your workforce without forming a local entity.

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