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At G-P, our industry leading Global Employment Platform™ helps companies unlock their full potential by building highly skilled global teams in days instead of months. But how does the everywhere workforce work together best? Here we discuss the opportunities – and challenges – in achieving the kind of global growth and success we can all share.
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There are several reasons you might want to build an international team, like expanding your company into new territory or seeking talented remote workers to fill specific job tasks. Taiwan has a large, highly educated labor force with STEM specialties and a dedicated work ethic. This guide to hiring employees in Taiwan will provide a better idea of what to expect when recruiting talent here, including contractual obligations, operational requirements, and anticipated costs.
What to know before hiring in Taiwan
Taiwan — whose estimated population is just under 24 million — is an island governed by the Republic of China (ROC), accessible to China’s mainland by air or sea. Its capital city is Taipei.
Review these fast facts about the country before you start hiring new employees in Taiwan:
- Currency: Taiwan currency is the New Taiwan Dollar, also called the NT or NT$.
- Specialties: Taiwan is a hub of technological development and industrial manufacturing. A few top exports include electronics, machinery, and petrochemicals.
- Government: The most significant government policy to know before hiring someone in Taiwan is the Labor Standards Act (LSA). The LSA regulates all labor-related policies, statutes, and guidelines, including minimum terms and employment conditions. It applies to nearly all industries, employees, and occupations.
You must establish a legal entity in Taiwan before you start onboarding new employees. This is a complex process that involves submitting applications to various agencies for approval, including applicable investment commissions, the Department of Commerce, and all relevant authorities. The process takes multiple weeks before you have your business license.
1. The Taiwanese labor market
The labor force in Taiwan is an estimated 11.5 million strong, with extensive reach in the agricultural, industrial, and service industries. Taiwanese employees spend an average of six years at a single workplace.
The labor force here is strong, driven, and educated. Taiwan is home to some of the world’s top universities — including National Taiwan University (NTU) — and families prioritize diligent study from a young age. Taiwan operates on a 12-year compulsory education system, after which students have a choice between 141 different universities and colleges. Forty-six percent of the population holds a higher education degree, a rise from recent decades, and students receive some of the highest international test scores in the world. The workforce here is especially versed in STEM subjects.
Employers can hire anyone 15 years and older, though minors aged 15 and 16 cannot participate in exceptionally strenuous or dangerous work. Older employees typically retire around age 60. Taiwan has strict equal employment rules that prohibit discrimination based on age, class, language, religion, marital status, party affiliation, birthplace, origin, gender, sexual orientation, appearance, disabilities, and former membership in labor unions.
2. Languages in Taiwan
Taiwan’s official language is Mandarin Chinese, though officials hope to become a bilingual nation — speaking Mandarin and English — by 2030. Many other locals speak Taiwanese Hokkien, also known as Taiwanese Minnan, or the Hakka dialect. Taiwan is home to 16 recognized indigenous groups, each with its own language and dialect.
Employment contracts can be in any language that you and your employees choose. Always verify which language your employees are most comfortable speaking and writing in and provide translations as needed.
3. Working hours and time off
Taiwanese employees work 40-hour workweeks, with eight-hour days, five days per week. All employers are required to give employees two days off per week — one of which is mandatory, the other flexible. On flexible days, employees can agree to work for overtime pay. Working hours may never extend beyond 12 hours in a single day, and overtime should not exceed 46 hours per month. Standard employees in non-dangerous work environments get a 30-minute break every four hours and must have at least 11 hours between rotating shifts.
Required paid annual leave varies depending on how long the employee is with your company. The maximum is 30 days per year. Mothers get eight weeks of paid maternity leave if they have worked for your company for more than six months. If they have worked less than six months, their maternity leave is paid at half their regular rate. Fathers get five paid days.
There are two types of sick leave:
- Ordinary sick leave without hospitalization — 30 days per year
- Hospitalized sick leave — up to one year within two years
Ordinary sick leave is paid at half the employee’s regular rate, while hospitalized sick leave is unpaid.
Taiwan recognizes 10 public holidays. If a holiday falls on a weekend day, the preceding Friday or following Monday will be the day of observance for workplaces. You are required to keep an up-to-date record of all employee attendance through whichever method best suits your company.
4. Employment contracts
Taiwan governs all work relationships according to their labor laws, regardless of whether the Taiwanese employee works overseas for any portion of the employment period. There are two types of work contracts — fixed-term and indefinite term:
- Fixed-term: These contracts apply for temporary, seasonal, or short-term jobs.
- Indefinite term: Indefinite terms apply to all part-time and full-time permanent contracts.
There are no formal contract requirements or structures for these employment contracts, but it is common practice — and better for your organization, employee relationship, and business records — to provide a written contract that details the employee’s role, expected duties, pay expectations, start date and end date, vacation guidelines, rules of conduct, disciplinary measures, and other critical information that will help your employee be productive and informed about how your company operates.
5. Compensation and benefits
Taiwan employees are paid once monthly, usually on the 15th, for all work they’ve completed between the first and last day of the prior month. In 2020, Taiwan adjusted the national minimum wage, effective in January 2021, to NT$24,000 per month, or NT$160 per hour.
Employers are responsible for the following social security benefits:
- National health insurance (NHI): The employer, employee, and government split the cost of NHI.
- Labor insurance: If employers have five or more employees and a legal entity in Taiwan, they must pay for labor insurance. Labor insurance covers things like survivor’s benefits, disability, and maternity leave.
- Employment Service insurance: If employees meet specific terms, they are required to enroll in the Employment Insurance Act program.
- Labor pension: Employers must contribute at least 6 percent of each employee’s monthly wages into a pension account.
6. Taxes
Taiwan requires all tax resident employees — anyone who lives in the country for at least 183 days of the year — to report and pay regular income tax and a flat-rate income basic tax (IBT), whichever amount is greater. Income tax ranges from 5 to 40 percent, depending on the employee’s earnings. The IBT amount is always 20 percent. It is the employer’s responsibility to withhold income tax from the employee’s pay.
Cost of hiring an employee in Taiwan
One of the most critical steps to hiring in Taiwan is ensuring you have enough capital to invest in recruiting and hiring new employees.
Consider the cost of the following factors:
- Establishing a legal entity, obtaining a business license, and opening a banking account in Taiwan
- Placing a job advertisement online, in print, or on local job boards
- Optional assistance from a staffing agency or internal committee
- Legal fees for lawyers specializing in local law, if applicable
- Translation services for conversations, interviews, and legal documents
- Information verification, including background checks, visas, resume information, and references
- New-hire onboarding, paperwork, training, provided equipment, and uniform, if applicable
- Job applicant tracking or resume software
- Mandatory employment benefits, including social security benefits, insurance, and similar fees
- All travel, lodging, transportation, dining, and courtesy fees associated with traveling to and from Taiwan
Tips and hiring practices in Taiwan
The Taiwanese culture demonstrates an exceptionally strong work ethic and places immense value on family, humility, harmony, and respect.
These tips for hiring in Taiwan will help you navigate any special circumstances:
- Trial periods: There are no probationary periods for new hires. Instead, you operate on a three-month trial period. After these three months are over, you must provide adequate notice that you have decided not to move forward, if necessary.
- Optional bonuses: If your company is preparing to hire employees in Taiwan, you might need to add optional bonuses into your salary budget. Though bonuses and end-of-year “13th-month salary” are not required, they are customary in Taiwan. You can award bonuses contractually or at your discretion. Most companies give them at the end of the year after covering all business losses, expenses, and taxes.
- Severance and termination: Should you wish to end a working relationship with a Taiwan employee, you must follow all regulations set forth by the LSA, including valid reasoning and advanced notice. Employees may be eligible for severance pay. You cannot terminate an employee on maternity leave or anyone on medical leave related to disease or occupational injury.
- Greetings and compliments: Greet interviewees with a gentle handshake or nod and exchange business cards, if applicable. Do not invade a person’s personal space.
- Formal business: A professional, formal dress code is expected at company meetings.
What does a company need to hire in Taiwan?
Most countries lack an embassy in Taiwan, so you will likely conduct most of your business relationships through the Taipei Economic and Cultural Office.
The most common type of business in Taiwan is the corporation, which requires:
- An application for the reservation of your proposed Chinese name and the scope, nature, and type of business you’re establishing.
- A registered foreign language name, if necessary.
- An application for Foreign Investment Approval (FIA).
- Filings with local tax authorities and the Ministry of Economic Affairs.
Once you complete those steps and establish your legal business entity in the country, you need to:
- Open a Taiwan business bank account.
- Create and translate all employment contracts and documents.
- Set up all necessary payroll, social security, tax compliance, and insurance accounts.
- Advertise your job position and begin recruiting applicants.
- Designate an interview space at your local physical address or via video conference.
Establishing a legal entity and hiring in Taiwan can be a lengthy, complex process. You can avoid these tasks by partnering with an Employer of Record (EOR) like Globalization Partners, which handles the intricacies of the international hiring process.
Hiring remote employees in Taiwan
Hiring and interviewing remote employees via video conference is not an issue since 93 percent of Taiwan residents use what has been called the fastest internet in the world. As you prepare for video interviews for remote employees, keep these tips in mind:
- Taiwan writes the date in a year/month/day format.
- Always check time zone differences between you and your interviewee.
- Taiwan’s international country code is 886, and the internet code is .tw.
- Bargaining and negotiation are common practices in Taiwan.
Hire employees in Taiwan with help from Globalization Partners
Globalization Partners is an EOR with an established entity in Taiwan and 186 other countries around the world. We can help you expand your company by managing all the legalities, compliance, and regulations associated with hiring employees while you manage your day-to-day operations and expansion efforts. When you partner with us, you no longer have to worry about how to hire in Taiwan or the international complexities and logistics associated with establishing your company locally orhiring an out-of-country employee — we do the work for you. Request a proposal to learn more.
