You have many factors to consider when you expand to Taiwan. You’ll need to hire an entire team and set up a locally compliant payroll solution — all while learning all of Taiwan’s compensation laws and deciding on the best benefits for your employees. G-P can help with our Taiwan benefit management strategy. We will ensure your employees receive guaranteed and additional benefits, and we can add them to our payroll to ensure your complete compliance.
Taiwan Compensation Laws
Taiwan increased its minimum wage to 26,400 NTD per month starting on January 1, 2023. This act also increased the hourly minimum wage to 176 NTD.
Taiwan has strict overtime compensation laws. Employees who are eligible for overtime should receive 134% of their regular pay rate for the first two hours of overtime they work on a workday. The second two hours are paid at a rate of 167%. The laws also stipulate additional regulations if an employee works overtime on a rest day or national holiday. Employers typically require employees to request prior approval from management before working overtime since unpaid overtime wages can make a difference in an employee’s termination.
Guaranteed Benefits in Taiwan
As you outline a Taiwan benefit management plan, you must include the statutory minimums concerning time off, maternity and paternity leave, health insurance, and similar facets. Taiwan has nine public holidays during which employees receive the day off. All employees also receive paid annual leave based on their number of years of service with the company. For example, employment for more than half a year but less than one year equals three days off, while 10 or more years of employment mandates 15 days plus one additional day for every year of service.
Female employees are entitled to maternity leave before and after childbirth for a total of eight weeks. Women who have worked more than six months for a company receive full pay during maternity leave, while employers who have worked less than half a year are entitled to half pay. Male employees get seven days of paid paternity leave.
Taiwan Benefits Management
Another significant aspect of a Taiwan benefit management plan is additional benefits that employees expect but are not mandatory. In Taiwan this can include:
- Leaving service benefits (LSB)
- Life, accident, and business travel insurance
- Housing allowances
- Festival bonuses
- Meal allowances
- Extended medical benefits to the employees’ spouses and dependent children
Restrictions for Benefits and Compensation
Most restrictions for benefits and compensation come from trade unions or collective bargaining agreements (CBAs). Trade unions aren’t common in Taiwan, but you should double check to determine whether your industry or employees are covered by one.
Taiwan Competitive Benefits Planning
Growing your business in a new country comes with several responsibilities, including benefits planning. The benefits you offer to your team can play a significant role in your success. By using best practices, you can leverage your employee benefits planning in Taiwan to help develop your company internationally.
Taiwan Employee Benefits Plans
While benefits play a role in compliance with labor laws, they also help you build a reputation as a good employer. A strong benefits package will encourage more job seekers to apply for your vacancies and help you gain respect in the community.
A competitive benefits plan can also improve workplace morale and increase retention. The advantages of a developed benefits plan are far-reaching. Some of the supplemental benefits you might offer include:
- Meal allowances
- Transportation stipends
- Housing allowances
- Private health insurance
- Holiday bonuses
- Gym memberships
- Company phones
Legal Obligations for Employee Benefits
As an employer, you’re responsible for a range of provisions. These benefits include:
- Public holidays off
- Paid annual leave
- Paid maternity and paternity leave
- Health insurance
- Social security contributions
- Employment and labor insurance
Designing Taiwan Employee Benefit Plans
When you’re ready to design your benefits plans, you have to consider two factors — your company’s resources and your employees’ needs. While you want to provide for your workers, overextending your business can stand in the way of your success. With the right process, you can achieve a balance.
1. Determine Your Resources and Goals
To keep your 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 your benefits might help you meet them. For instance, if you want to direct your efforts toward recruitment, a competitive benefits plan can capture job seekers’ 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, job seekers will be more likely to apply for your vacant positions.
You can also discuss expectations with employees in your region. Conduct interviews or distribute surveys to find out what workers want from their employers.
3. Create Your Plan
You can use 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 its benefits packages. Your costs 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. You 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. Employers must contribute 7.35 percent of employees’ earnings, and employees must contribute 2.1 percent.
Other employer contributions for social security include:
- 6 percent for pensions
- 2 percent for employment insurance
- 3.1 percent 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 up to TWD 2,400 a month are not taxable. 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 health care through a national health insurance scheme. Employers cover about 60 percent of care, employees cover 30 percent, and the government covers 10 percent. As an employer, you’re legally required to make these contributions for your employees and on their behalf.
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.
Turn to G-P for Employee Benefits Planning in Taiwan
Get in touch with our team to learn more about our competitive benefits planning.