How much does it really cost to hire in Taiwan in 2026?
The employer's pension floor in Taiwan is 6% of wages, and the law adds no 13th-month salary on top. Pay starts at TWD 29,500/month for a full-time hire. Once you add Labor Insurance and health cover, Taiwan's statutory employer load lands well below most high-protection Asian markets.
· Taiwan guide
Illustration · Taipei, Taiwan
Hiring in Taiwan adds less on top of gross salary than most of its high-protection neighbours. The pension number is the anchor. Employer Labor Pension is 6% of monthly wages. It goes into the worker's own pension account. There is no mandatory employee pension match.
Full-time pay starts at TWD 29,500/month, or TWD 196/hour for hourly work. Two more employer lines sit on top. Labor Insurance and National Health Insurance are split between employer and worker. The exact 2026 rates are set each year by the agencies, so confirm them before you budget a hire.
There is no 13th-month or guaranteed bonus by law. A year-end payment is only due if the company turns a profit (Labor Standards Act art. 29). Paid annual leave starts at 7 days once someone passes a year of service, then climbs with tenure. Ordinary sick leave runs up to 30 days a year at 50% of salary.
The headline: what a Taiwan hire actually costs
Start with gross salary. Add employer Labor Pension at 6% of monthly wages, paid into the worker's individual pension account. Then add the employer share of Labor Insurance and National Health Insurance.
The table below is illustrative on a NT$1,200,000 annual salary (NT$100,000 a month). The pension line is computed from the verified 6% rate. The insurance lines are shown as ranges because the 2026 rates need confirming with the agencies.
Taiwan's statutory employer add-ons are lighter than many high-protection Asian markets. The biggest fixed line is the Labor Pension contribution at 6% of monthly wages, which the employer pays into the worker's own retirement account. There is no mandatory employee pension contribution on top, though a worker may add up to 6% voluntarily. The two insurance lines, Labor Insurance and National Health Insurance, are split between employer and worker and are set each year by the agencies.
| Line | Illustrative cost on NT$1,200,000 annual salary | Source |
|---|---|---|
| Gross salary | NT$1,200,000 | Contract |
| Employer Labor Pension at 6% of monthly wages | NT$72,000 (illustrative) | Labor Pension Act, Article 14 |
| Employer Labor Insurance share (insured-salary based) | Variable; confirm the 2026 rate with the Bureau of Labor Insurance | Bureau of Labor Insurance |
| Employer National Health Insurance share (insured-salary based) | Variable; confirm the 2026 rate with the NHI Administration | National Health Insurance Administration |
| Annual leave: 7 days per year at 1 to 2 years of service, rising with tenure (paid, built into salary) | Included in salary | Labor Standards Act, Article 38 |
| Mandatory 13th-month or guaranteed bonus | None (profit-contingent year-end bonus only) | Labor Standards Act, Article 29 |
These figures are illustrative. The pension line is computed from the verified 6% employer rate applied to monthly wages. The Labor Insurance and National Health Insurance lines depend on the insured-salary band and the agencies' current rates, so they are shown as ranges rather than fixed numbers. Confirm both with the Bureau of Labor Insurance and the NHI Administration before you commit to a hire budget.
Add Teamed from $599 per employee per month and the total rises by a flat, predictable line. Use the Employer Cost Calculator to run your own salary figures.
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Start with gross salary
Confirm the agreed monthly gross in New Taiwan dollars. This is the base every other line builds on, and it must clear the statutory minimum wage.
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Add the Labor Pension floor
Apply the employer pension rate to monthly wages and pay it into the worker's individual account. There is no mandatory employee match to model.
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Confirm the two insurance lines
Labor Insurance and National Health Insurance are split between employer and worker. Check the current agency rates before you fix a budget, because they are set each year.
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Model leave and sick pay as event costs
Annual leave, sick pay, and parental leave are employer-funded but event-driven. Budget them as variable costs that arise when used, not as fixed monthly charges.
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Plan for severance from day one
Severance accrues from the first full year of service, and dismissal is only lawful on closed statutory grounds. Build fair-process documentation and a severance reserve into your headcount plan early.
Pension and insurance: the employer contributions
The employer pays Labor Pension at 6% of monthly wages into the worker's individual account. The worker pays nothing into it by law. A worker may add up to 6% on their own if they choose.
Two insurance lines sit beside the pension. Labor Insurance and National Health Insurance are both split between employer and worker. The 2026 rates are set by the agencies, so confirm them before you budget.
Labor Pension
The new Labor Pension system runs on individual accounts. The employer contributes 6% of an employee's monthly wages into that worker's own pension account under the Labor Pension Act, Article 14. This is a floor, not a ceiling. The employee makes no mandatory contribution, though they may add up to 6% voluntarily. For cost modelling, treat the employer pension line as a clean 6% of wages.
Employer Labor Pension contribution: 6% of the worker's monthly wages, paid into their individual pension account. This is the statutory minimum. The employee contribution is voluntary, up to 6%, and is not required by law.
Source: Labor Pension Act, Laws & Regulations Database of the Republic of China (Taiwan)
Labor Insurance
Labor Insurance covers old-age, injury, disability, and related benefits. The total premium is a percentage of the worker's insured monthly salary, and the employer carries the larger share with the worker and the government funding the rest. The insured-salary band has an upper ceiling, so the contribution does not scale endlessly with high pay. The exact 2026 premium rate and split need confirming against the current Bureau of Labor Insurance tables, so we do not state a number here. Verify it with the Bureau of Labor Insurance before budgeting.
National Health Insurance
National Health Insurance is a separate premium, also calculated on the insured monthly salary and split between employer, worker, and dependants. The employer pays the largest share. As with Labor Insurance, the 2026 rate and split are set by the agency and should be confirmed rather than assumed. Check the current figure with the National Health Insurance Administration.
No mandatory employee pension match
Taiwan does not require the employee to match the employer's pension contribution. The 6% is the employer's alone. Any retirement saving above that, on the employee side, is voluntary up to the 6% cap. For headcount budgeting, the pension cost is a fixed 6% of wages, and the variable lines to watch are the two insurance premiums.
Income tax and payroll: what the employer withholds
Taiwan uses a progressive income tax with five bands. The employer withholds tax from each pay run and remits it. The bottom band is 5% and the top reaches 40%.
Wages must be paid at least twice a month unless you agree otherwise or pay monthly in advance. Every payslip must itemise how the pay was worked out. Keep payroll records for at least five years.
Income tax in Taiwan is the employee's cost, not the employer's. The employer's job is to withhold it correctly from each pay run and remit it on time. Income tax becomes an employer liability only when the withholding or filing goes wrong. The tax is charged on consolidated net taxable income across five progressive bands for the 2026 tax year.
The 2026 Taiwan income tax bands
The five bands below apply to consolidated net taxable income for 2026. The thresholds were raised from the 2025 levels, so check the band you are modelling against the current National Taxation Bureau table.
| Net taxable income band | Marginal rate |
|---|---|
| NT$0 to 610,000 | 5% |
| NT$610,001 to 1,380,000 | 12% |
| NT$1,380,001 to 2,770,000 | 20% |
| NT$2,770,001 to 5,190,000 | 30% |
| NT$5,190,001 and above | 40% |
Source: National Taxation Bureau of Taipei, Table of Progressive Tax Rates for the Year 2026
How and when wages are paid
Under the Labor Standards Act, Article 23, wages must be paid on a regular basis at least twice a month, unless the parties agree otherwise or wages are paid monthly in advance. Every payslip must show how the pay was calculated. The same article requires the employer to keep payroll records for at least five years. These are administrative duties, not a cash cost, but getting them wrong can trigger penalties that dwarf the contribution rates.
Leave and sick pay: what the law requires
Paid annual leave starts at 7 days once a worker passes a year of service. It rises with tenure, up to 30 days for long service. Six months to a year of service earns 3 days.
Ordinary sick leave runs up to 30 days a year without hospitalisation, paid at 50% of salary. Maternity leave is 8 weeks at full pay for workers with six months of service.
Taiwan's leave rules sit in the Labor Standards Act and related regulations. Most of it is employer-funded, with Labor Insurance topping up some sick and maternity pay.
Annual leave
Annual paid leave scales with service. A worker with six months to one year gets 3 days. From one to two years it is 7 days. It then climbs to 10 days at two to three years, 14 days at three to five years, 15 days at five to ten years, and one extra day per year after ten years, up to a maximum of 30 days. This is set in Article 38. The cost is built into salary, but unused leave must be settled correctly.
Public holidays
Taiwan grants a set of national public holidays each year on top of annual leave, gazetted under the Labor Standards Act and its enforcement rules. The exact count for 2026 should be confirmed against the current Ministry of Labor holiday schedule, as it shifts year to year, so we do not state a fixed number here. Work on a public holiday attracts premium pay under the Act.
Sick pay
Ordinary, non-hospitalised sick leave runs up to 30 days in a year, paid at 50% of salary under the Regulations of Leave-Taking by Workers, Article 4. Where the Labor Insurance benefit falls short of 50%, the employer makes up the difference. Hospitalised sick leave can run much longer, up to a year within any two-year period. Budget sick pay as an event-driven cost, not a fixed monthly charge.
Maternity and paternity leave
Statutory maternity leave is 8 weeks. A worker with at least six months of service is paid in full; under six months is paid at half. A miscarriage after three months of pregnancy carries 4 weeks. Fathers also get childbirth accompaniment and check-up leave under the Act of Gender Equality in Employment, though the exact current day count varies by source and should be confirmed against the Act before you rely on it.
How Teamed handles Taiwan employment costs for you
Teamed becomes your legal employer of record in Taiwan for from $599 per employee per month, with zero FX mark-up in any currency.
Labor Pension, Labor Insurance, National Health Insurance, income tax withholding, and the full Taiwan compliance stack run on one platform.
Real HR and legal experts handle your Taiwan hires from the first offer letter through every pension and insurance remittance and every tax filing. An actual person, not a chatbot or a pooled queue. There is no setup fee and no exit fee. Every employer cost passes through at cost, itemised on every invoice. You see the pension line, the Labor Insurance line, the health insurance line, and any leave liability. Nothing is buried inside the management fee.
EOR payroll, contractor onboarding, and entity setup all live on one platform. A Taiwan contractor who converts to employment keeps their record. That same employee can graduate from EOR to your own Taiwan entity without switching systems. EOR is the right structure for a first Taiwan hire, until it isn't, and Teamed tells you when the model no longer fits. Start from the Taiwan hiring overview or run the Employer Cost Calculator to see the full picture.
Frequently asked questions
What does it cost to hire an employee in Taiwan in 2026?
The fixed statutory employer line is the Labor Pension contribution at 6% of monthly wages, paid into the worker's own pension account. On top of that sit the employer shares of Labor Insurance and National Health Insurance, both calculated on the insured salary and set each year by the agencies, so confirm the current rates before budgeting. Full-time pay starts at TWD 29,500/month. There is no mandatory employee pension match and no 13th-month salary by law. Add Teamed from $599 per employee per month for the full employer-of-record service.
How much is the employer pension contribution in Taiwan?
The employer pays Labor Pension at 6% of the worker's monthly wages into their individual pension account, under the Labor Pension Act, Article 14. This is the statutory minimum. The employee makes no mandatory contribution, although they can add up to 6% voluntarily. For cost modelling, the employer pension cost is a clean 6% of wages.
Is there a 13th-month salary or mandatory bonus in Taiwan?
No. Taiwan law does not require a 13th-month salary or a fixed annual bonus. A year-end payment is only due out of net profit, after tax and loss-cover, to workers who served the full year, under the Labor Standards Act, Article 29. A Lunar New Year bonus is common market custom, but it is a budgeting choice, not a statutory cost.
What is the minimum wage in Taiwan for 2026?
The monthly minimum wage is TWD 29,500/month and the hourly minimum is TWD 196/hour, both effective from 1 January 2026 per the Ministry of Labor announcement. Any full-time hire must be paid at or above the monthly figure, and hourly workers at or above the hourly figure.
How much severance pay does an employer owe in Taiwan?
For a worker hired on or after 1 July 2005, under the new pension system, severance is 0.5 months of average wage for each full year of service, capped at 6 months of average wage, under the Labor Pension Act, Article 12. Service that pre-dates July 2005 falls under the old system at the higher rate of 1 month of average wage per year. Severance must be paid within 30 days of the contract ending.
What annual leave is a Taiwan employee entitled to?
Annual leave scales with service. A worker with one to two years of service gets 7 days. Six months to a year earns 3 days. It then rises to 10 days at two to three years, 14 days at three to five years, 15 days at five to ten years, and one more day per year after ten years, up to a maximum of 30 days, under the Labor Standards Act, Article 38.
The number that surprises people about Taiwan is how light the fixed employer load is. The pension floor is a clean six percent of wages, with no mandatory employee match and no 13th-month salary by law. The real cost discipline sits at the exit, not the monthly run. Severance and the closed list of lawful dismissal grounds are where a Taiwan budget gets tested, so plan the end of the relationship at the start.
Taiwan's employer pension floor is 6% of wages, with no mandatory employee match and no 13th-month salary by law.
Pay starts at TWD 29,500/month, the insurance lines are set yearly by the agencies, and the real cost discipline waits at the exit.
Know the pension floor. Know the insurance split. Know the severance cap before you sign the offer.
