Before hiring in Taiwan, you’ll need to establish a locally compliant payroll system — all while learning all of Taiwan’s compensation laws and deciding on the best benefits for your talent. By following these best practices, you can maximize the impact of your benefits plan to recruit top talent and develop your company internationally.

Taiwan compensation laws

Minimum wage is TWD 29,500 monthly and TWD 196 hourly. Some workers, including some domestic workers, are excluded from coverage under the Labor Standards Act. 

Taiwan has strict overtime compensation laws. You must pay any employees eligible for overtime at least 133.33% of their regular hourly wage for the first two hours of overtime and 166.67% for the second two hours. 

Separate compensation and scheduling rules apply to work on a designated rest day, mandatory weekly day off, or statutory holiday. Work on a statutory holiday generally requires employee consent and an additional day’s wage for work within eight hours. Work on a mandatory weekly day off is generally prohibited except in legally defined emergencies.

Guaranteed benefits in Taiwan

As you outline a Taiwan benefits plan, you must include the statutory minimums concerning time off, maternity leave, health insurance, and similar facets.

Employees get 16 public-holiday days plus a compensatory day off if a holiday coincides with a normal rest day. All employees also receive paid annual leave based on their years of service. Paid annual leave entitlements are as follows:

  • Employees with six months to one year of service get three days of leave. 
  • Employees with one to two years of service get seven days of leave.
  • Employees with two to three years of service get 10 days of leave.
  • Employees with three to five years of service get 14 days of leave.
  • Employees with five to 10 years of service get 15 days of leave.
  • Employees with 10 years of service get 16 days of leave, plus one day for each further year, up to 30 days.

Pregnant employees are entitled to eight weeks of maternity leave. This covers the period before and after childbirth and generally totals 56 consecutive calendar days. Employees with at least six months of continuous service get 100% of regular wages during maternity leave. Those with less than six months get 50%. Eligible employees get seven paid days of combined pregnancy checkup accompaniment and paternity leave when their spouse is pregnant or gives birth.

Taiwan benefits management

Supplemental benefits are another significant aspect of a Taiwan benefits plan, which include:

  • Housing allowances
  • Festival bonuses
  • Meal allowances
  • Extended medical benefits to spouses and dependent children
  • 13th-month salary

Taiwan competitive benefits planning

Growing your business in a new country comes with several responsibilities, including benefits planning. The benefits you offer can play a significant role in your success.

Taiwan employee benefits plans

While benefits play a role in compliance with labor laws, they also help you build a positive employer brand. A strong benefits package will encourage more jobseekers to apply for your vacancies and help you gain notoriety. A competitive benefits plan can also improve workplace morale and increase retention.

Legal obligations for employee benefits

Employers are responsible for a range of provisions. These benefits include:

  • Public holidays off
  • Paid annual leave
  • Paid maternity and paternity leave
  • National health insurance
  • Employment insurance and labor insurance
  • Labor occupational accident insurance

Designing Taiwan employee benefits plans

When you’re ready to design your benefits plans, you have to consider 2 factors — your company’s resources and employees’ needs. Overextending your company can stand in the way of your success, but with the right process, you can achieve a balance.

1. Determine your resources and goals

To keep benefits spending under control, you need to understand your revenue and how much you’re willing to contribute to your plan. Take the time to assess your earnings and expenses to create a benefits budget.

Your team should also take the time to set goals and determine how these benefits might help you meet them. For instance, if you want to direct your efforts toward recruitment, a competitive benefits plan can capture jobseekers’ attention.

2. Identify employee expectations and needs

You can only become competitive in the labor market if you understand the local standards for benefits and compensation. Research companies that are similar to yours in industry, location, and size to see what types of benefits they provide for their employees. If you can meet or exceed their offerings, candidates will likely apply for your vacant positions.

You can also discuss expectations with employees in your target region. Conduct interviews or distribute surveys to find out what employees want from their employers.

3. Create your plan

You can leverage the information you gathered to identify and prioritize the provisions that will make your company stand out. Be sure to allocate funds to any required benefits first. You can distribute your remaining budget based on your findings — and as your revenue grows, you can build on your plan to offer even more benefits.

Average cost of benefits

Every company pays a different amount for benefits packages. Expenses will depend on your company’s size, location, and industry, so it’s best to create a budget based on those factors rather than a national average. This approach makes it easy to scale your benefits with your business and remain compliant every step of the way.

How to calculate employee benefits

Calculations will vary depending on the benefits you provide. Companies can find guidance for calculating required benefits in Taiwan’s labor regulations. For example, labor insurance is a part of the required social security contributions. For standard employees, employers pay 70% of labor and employment insurance premiums, employees pay 20%, and the government pays 10%. Labor occupational accident insurance is separate. The employer pays 100% of this premium and cannot deduct any portion from wages.

Other employer contributions for social security include:

  • 6% or more of each employee’s monthly contribution wage for pensions
  • 0.7% of the employee’s monthly insured salary for employment insurance
  • 4.84% of the employee’s insured salary for health insurance

How are employee benefits taxed in Taiwan?

All forms of remuneration, including benefits, are generally considered taxable income. However, there are a few exceptions. Meal allowances are tax-free up to TWD 3,000 per employee per month. If an employer directly provides housing for an employee — not a housing stipend — this provision is also considered nontaxable.

Employee health benefits

The country provides healthcare through a national health insurance scheme. Employers cover 60% of the regular National Health Insurance premium, employees cover 30%, and the government covers 10%. Employers are legally required to make these contributions on behalf employees.

This publicly funded healthcare system covers a range of service types, but it doesn’t reach all of them. While supplemental private insurance is not required, employers may choose to provide these schemes.

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