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
Taiwan increased its minimum wage to TWD 27,470 per month starting on January 1, 2024. This act also increased the hourly minimum wage to TWD 183.
Taiwan has strict overtime compensation laws. Employees who are eligible for overtime should receive 134% of their regular pay rate for the first 2 hours of overtime. The second 2 hours are paid at a rate of 167%. The law also stipulates additional regulations if an employee works overtime on a rest day or national holiday.
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. Taiwan has 9 public holidays during which employees receive the day off. All employees also receive paid annual leave based on their years of service. Paid annual leave entitlements are as follows:
- Employees who have worked more than 6 months but less than 1 year receive 3 days of leave.
- Employees who have worked more than 1 year but less than 2 receive 7 days of leave.
- Employees who have worked more than 2 years but less than 3 receive 10 days of leave.
- Employees who have worked more than 3 years but less than 5 receive 14 days of leave.
- Employees who have worked more than 5 years but less than 10 receive 15 days of leave.
- Employees who have worked more than 10 years receive 15 days plus 1 day for every additional year of service, up to a maximum of 30 days.
Pregnant employees are entitled to maternity leave before and after childbirth for a total of 8 weeks. Employees who have worked more than 6 months for a company receive full pay during maternity leave, while employees who have worked less than half a year are entitled to half pay. Non-birthing parents get 7 days of paid paternity leave.
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. With labor insurance and employment insurance, employers pay 70%, employees pay 20%, and the government pays 10%. With labor occupational accident insurance, the employer pays 100%.
Other employer contributions for social security include:
- 6% for pensions
- 0.7% for employment insurance
- 3.1% 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 3,000 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 healthcare through a national health insurance scheme. Employers cover about 60% of care, 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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As your partner in global expansion, G-P will handle payroll and compliance, so you can focus on growing your team and scaling your business. Our market-leading Global Growth Platform™ is powered by the first fully customizable suite of global employment products and backed by the industry’s largest team of in-country HR and legal experts to streamline payroll management and help you offer competitive, compliant local benefits.
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