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Taiwan has a mandatory 6% Labour Pension employer contribution, Labour Insurance, and National Health Insurance. Generous annual leave (7–30 days by tenure) and mandatory severance pay. Rippling handles LIB, Bureau of Labor Affairs, and National Taxation Bureau filings.
Taiwan is a high-income East Asian economy with global leadership in semiconductor manufacturing (TSMC), electronics, and ICT. Taipei is the primary business hub. Taiwan uses the New Taiwan dollar (TWD). Taiwan has a sophisticated legal and financial system and a highly educated workforce. Employment is governed by the Labor Standards Act, which provides strong employee protections including mandatory Labour Pension, generous leave entitlements, and statutory severance pay.
| Contribution | Rate | Notes |
|---|---|---|
| Labour Insurance (LI) | ~70% of LI premium | Effective rate ~7.7% of insured salary for employer share |
| National Health Insurance (NHI) | ~60% of NHI premium | Effective rate ~4.69% of insured salary for employer share |
| Labour Pension (New System) | 6% | Mandatory; on full monthly salary; deposited to employee's individual pension account |
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| Contribution | Rate | Notes |
|---|---|---|
| Labour Insurance (LI) | ~20% of LI premium | Based on insured salary bracket; effective rate ~1.43% of salary |
| National Health Insurance (NHI) | ~30% of NHI premium | Based on insured salary bracket; effective rate ~1.41% of salary |
| Labour Pension (voluntary top-up) | 0–6% optional | Employee may voluntarily contribute up to 6% to individual pension account |
| Income tax (withholding) | 5–40% | Progressive 5-bracket system |
| Annual Income (TWD) | Rate |
|---|---|
| Up to 590,000 | 5% |
| 590,001–1,330,000 | 12% |
| 1,330,001–2,660,000 | 20% |
| 2,660,001–4,980,000 | 30% |
| Above 4,980,000 | 40% |
Monthly income tax withheld by employer and remitted to National Taxation Bureau. Annual reconciliation by January 31.
Severance: 1 month's average salary per year of service (max 6 months under New Pension System). Notice: 10–30 days depending on length of service. Termination without cause: full statutory severance required. ERGANI-equivalent: no equivalent; but termination must be documented and severance paid on the termination date.
Taiwan's Labour Pension New System (effective 2005) requires employers to contribute a mandatory 6% of each employee's monthly salary to the employee's individual pension account (IPA) at the Bureau of Labor Insurance. This is a defined contribution system — the account belongs to the employee and is portable between employers. There is no vesting cliff; contributions accrue from day one. Employees may also voluntarily contribute up to an additional 6%.
Taiwan's Labor Standards Act mandates severance pay of 1 month's average salary per year of service (prorated for partial years) for employees dismissed without cause, for operational reasons, or upon resignation after 15+ years. Severance pay is paid from the Labour Pension individual account if sufficient; the employer funds any shortfall. Maximum statutory severance under the New System: 6 months' average salary.
Taiwan's basic wage (minimum wage) is TWD 27,470/month (January 2024) and TWD 183/hour. Taiwan raises its minimum wage regularly — it has increased annually since 2017. The hourly rate is particularly relevant for part-time and hourly workers.
Taiwan's Labor Standards Act provides for special leave (paid annual leave): 3 days (6 months–1 year), 7 days (1–2 years), 10 days (2–3 years), 14 days (3–5 years), 15 days (5–10 years), 1 additional day per year from year 10 (capped at 30 days). Unused leave can be carried over one year or must be paid out. This is more generous than many comparable markets.
