Working hours and overtime
Statutory working hours are 40 hours and two days off per week.
Normal working hours may not exceed 8 hours per day.
Total working hours may not exceed 12 hours per working day.
Maximum overtime per month is 54 hours, but total overtime every 3 months may not exceed 138 hours.
Compensation and bonus
Effective from January 1, 2020, the monthly rate for minimum wage is TWD 23,100 and minimum hourly rate is TWD 158.
Overtime payment for the first 2 hours shall be 4/3 times of regular hourly wage, and 5/3 times for the 3rd and 4th overtime hours.
Overtime payment for work on holidays or annual leave is 1 times of regular hourly wage.
Annual bonus is not mandatory but customarily, employers pay 1 to 2 months year end bonus before Chinese New Year.
Company Act requires companies to set aside a percentage of annual profit or a fixed amount as bonuses to employees.
An employee shall be granted time off on holidays, Labor Day, and other days as prescribed by the central competent authority.
Annual paid leave is determined by the length of service an employee who continues to work for the same employer or business entity for a certain period of time according to the following table,Unused annual leave not taken due to business reasons shall be paid out at year-end or by mutual agreement, be carried over for one year.
3. Non-hospitalized sick leave shall not exceed 30 days. Hospitalized sick leave shall not exceed 1 year within 2 years. Employees may take ordinary sick leave not exceeding 30 days in a year with half pay.
4. Female employees shall be granted 56 calendar days at full pay as maternity leave; those with less than 6 months of service shall be paid at half of her regular salary.
5. Bereavement leave shall be 3 to 8 days, depending on relationship to the deceased.
6. Marriage leave shall be 8 days.
An employee may receive benefits from older pension scheme under Labor Standard Act (LSA) or newer pension scheme under Labor Pension Act (LPA) depending on the retirement plan the employee has selected. New pension scheme under LPA which was launched in July 2005 is applicable to all employment started after July 1, 2005. Employees hired before July 1, 2005 may elect to adopt pension under LSA or LPA. Pension scheme under LPA is a defined contribution plan which employers make at least 6% contribution of the employee’s monthly wages to the employee’s individual pension account monthly. Employees may make voluntary contributions up to 6% of their insured salary which may be deductible from their taxable income.
In addition, an employee is entitled to claim old age benefits upon retirement from Labor Insurance (LI) old age benefits which are managed independently from LSA or LPA retirement plans.
National Health Insurance
The NHI system is a mandatory national insurance system which covers all employed people, including foreigners with an Alien Resident Certificate.
National health insurance premium rate is 4.69% of the employee’s insured salary which is measured by breaking wages into 53 levels where the lowest and highest are NT$ 23,100 and NT $182,000. Wages over upper limit of insured salary are not subject to NHI premiums.
The premium is split between employer (60%), employee (30%) and government (10%). The employee shall pay for the same rate for any additional dependent enroller under his/her name up to 3 dependents.
The employer is required to pay a percentage of premiums of employees’ dependents based on average number of dependents for insured people in Taiwan. As of the time of writing this guide, the average is 0.58.
Supplemental Health Insurance
Under the second-generation NHI system, a 1.91% supplemental premium is imposed on the insured whose non-payroll income from the following five items exceeds NT$ 20,000: professional income, moonlighting, stock dividends, interest and rental income. In addition, those who receive job bonuses of more than four times their monthly salary in a year will also be required to pay the supplemental premium.
Any establishment employing five or more workers shall enter into labor insurance contracts with the Labor Insurance Bureau for every employee in the 15-60 age group.
Labor related insurances include Labor Insurance and Employment Insurance.
The labor insurance provides maternity benefits for female workers, benefit payments for injuries plus additional benefits in case of disability, death benefits for both the insured and their families (including parents), and retirement payments.Labor Insurance covers two types of risks: ordinary risk and occupational risk. Current premium for Labor Insurance is 10% of insured salary which is measured by breaking wages into various levels.
Employment Insurance –Employment Insurance Act is established to improve workers’ skill and capability, promote employment, and provide basic living support to the insured persons for a certain period of time during unemployment and job training.Current premium rate for Employment Insurance is 1% of insured salary.
The range of monthly insured salary for both Labor Insurance and Employment Insurance is from NT$ 23,100 to NT$ 45,800 and allocated between employer (70%), employee (20%) and government (10%).
Premium for Occupational Risk insurance ranging from 0.06% to 3% of insured salary is paid entirely by the employer.
Employment of foreign workers
Employer seeking to hire foreign professionals, if established for less than a year must have capital at least TWD 5 million, if established over 1 year, then must have annual turnover TWD at least 10 million. Foreign professional must have a university degree, at least 2 years relevant experience and monthly salary in Taiwan exceeds TWD 47,971.
Employer seeking to apply for work permit for its executive officer, such as representative or branch manager, if established for less than a year must have capital at least TWD 500,000, if established over 1 year, then must have annual turnover TWD at least 3 million.