General Overview

Taiwan is a vibrant, export‐driven economy in East Asia known for its advanced manufacturing, technology, and services sectors. The country maintains clear labor regulations that balance economic growth with employee protection.

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Employment Contracts

Taiwanese labor law recognizes both fixed-term and indefinite-term contracts. Written contracts are recommended and typically detail job scope, salary, working hours, leave entitlements, and termination conditions.

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Probation Period

A probation period is commonly set for up to 3 months. During this period, either party may terminate the contract with shorter notice, as specified in the employment agreement.

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Working Hours

Standard working hours are generally 8 hours per day and 40 hours per week. Overtime is permitted with the employee’s consent and is paid at a premium rate, according to the Labor Standards Act.

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Vacation Days

Employees are entitled to a minimum of 7 days of paid annual leave after one year of service. For each additional year of service, the leave may increase gradually, up to a statutory maximum (often reaching around 30 days).

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Sick Leave

Employees are provided with statutory sick leave. Typically, sick leave is granted for up to 30 days per year with full pay, provided a medical certificate is submitted. Extended absences due to work-related injuries or illnesses may be subject to different terms.

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Wages and Salary Payment

Salaries are generally paid on a monthly basis. Payment must be made by the date specified in the employment contract. As of 2024, Taiwan’s minimum wage is approximately NT$26,400 per month and NT$176 per hour.

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Public Holidays

Taiwan observes several public holidays, including:

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• New Year’s Day (January 1)
• Chinese New Year (dates vary; typically several days off)
• Peace Memorial Day (February 28)
• Tomb Sweeping Day (April 4/5)
• Labor Day (May 1)
• Dragon Boat Festival (date varies)
• Mid-Autumn Festival (date varies)
• National Day (October 10)‍

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If a public holiday falls on a rest day, a substitute day off is generally provided.

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Employer Taxes

Employers are required to contribute to both Labor Insurance and National Health Insurance. For Labor Insurance, employer contributions are set at an approximate rate of 20% of insured wages. For National Health Insurance, employers typically pay about 50% of the premium. (Exact rates may be subject to periodic government adjustments.)

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Employee Taxes

Employees pay progressive income tax on their earnings, with rates ranging from 5% to 40%, depending on income. They also contribute to Labor Insurance and National Health Insurance, with their share deducted directly from their wages.

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Notice Period

The statutory notice period is generally 30 days for both employers and employees. Shorter notice periods may be agreed upon for employment periods under three months, while extended service may require longer notice as specified in the contract.

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Termination and Severance Pay

If terminated without cause, employees are typically entitled to severance pay calculated as one month’s average salary per year of service, subject to statutory limits. Employers must also provide notice pay if the required notice period is not fulfilled.