When do you graduate from an EOR to your own Taiwan entity?

The table below uses NT$19,000 as an illustrative TWD equivalent of the Teamed fee. This is illustrative. The actual TWD amount depends on the exchange rate at the time of invoice. Teamed charges from $599 USD with zero FX mark-up.

Every entity cost figure in this table is a typical range. It covers outsourced payroll, bookkeeping, statutory filings, and HR admin for a small Taiwan company. These are illustrative figures, not law figures. Actual costs move with your outsourcing model and benefits programme. The crossover where the entity starts to win sits higher than the per-head fee alone suggests, because Taiwan loads three separate employer streams onto every payslip.

Taiwan runs three employer-side streams every month. The Labor Pension employer contribution is 6% of monthly insured salary into each worker's individual account. Labor Insurance and National Health Insurance premiums are charged on top, with an employer share on each. These rates apply whether you run EOR or your own company. They do not move the crossover much, but they do add filing load to the entity side.

Run the Crossover Calculator with your own headcount and salary band.

1. Calculate the EOR cost

   Multiply the Teamed fee (from $599 USD) by your planned Taiwan headcount. This is the fixed variable cost. It grows in a straight line as you hire.

2. Estimate the entity fixed overhead

   Typically NT$180,000 to 380,000 per month for a small Taiwan company. This covers payroll, bookkeeping, statutory filings, Labor Insurance, Labor Pension and National Health Insurance administration, and first-point HR. This cost does not grow much until headcount passes fifteen.

3. Find the crossover headcount

   The crossover is where EOR monthly cost equals the entity monthly overhead. For most Taipei tech salary bands this sits around six to nine employees. Use the Crossover Calculator for your own numbers.

4. Factor in non-financial triggers

   The maths gives you a headcount threshold. Local substance, public procurement eligibility, the dual pension history, and market-validation reversibility are separate questions that can override the cost crossover in either direction.

5. Plan the graduation date

   Allow four to eight weeks for entity formation before the first payroll on your own company. Add two to six weeks for the corporate bank account if you are foreign-parented. Start the GEMO process while EOR keeps running.

These are typical ranges, not law figures. No law sets what a Taiwan company costs to form. The range reflects real professional services market pricing in Taipei. It moves with share structure, whether you need a foreign investment approval, and how much you outsource.

Why the bank account matters for payroll

Taiwan banks require a fully registered company with a tax ID before opening a corporate account. The registration sequence matters. Expect 2 to 4 weeks from incorporation to an opened account for a locally owned company. Foreign-parented companies should budget 4 to 6 weeks because of stricter know-your-customer checks and, in many cases, the Foreign Investment Approval step. That turns a 4-week incorporation into a 6 to 12 week wait before the first payroll if the sequence is not run tightly.

These figures are typical market ranges for a small Taiwan company with 1 to 15 employees. They are illustrative, not law figures. Actual costs depend on whether you outsource or hire in-house, and on the complexity of your payroll and benefits programme.

Above 15 employees, dedicated in-house HR and finance capacity usually becomes necessary, and the band widens. Top-up group medical, common in competitive Taipei hiring, can add NT$2,000 to 5,000 per employee per month on top of the National Health Insurance employer share and is not included in the overhead estimates above.

Most cost comparisons skip the director-liability dimension because it is hard to put a number on. It is worth naming before you decide.

Personal duties under Taiwan company law

Every Taiwan company must name a responsible person who carries duties of good faith and due care for the company. Directors must avoid conflicts of interest and act in the company's best interests. These duties cannot be handed to an accountant or company secretary. The responsible person also signs off the company's statutory employer registrations and remittances.

The monthly filing rhythm

• Labor Pension: the employer contributes 6% of insured salary into each worker's individual account every month under the Labor Pension Act. Late or short contributions attract penalties.
• Labor Insurance: monthly premiums to the Bureau of Labor Insurance, employer and employee shares, on insured salary.
• National Health Insurance: monthly premiums to the National Health Insurance Administration, employer and employee shares.
• Wage payment: under the Labor Standards Act, wages must be paid at least twice a month unless agreed otherwise, with an itemised wage statement on each run.
• Payroll records: the Labor Standards Act requires payroll records to be kept for at least 5 years.
• Income tax withholding: monthly withholding and annual statements to the National Taxation Bureau.

Each filing is individually manageable. Stacked across a year, they consume real management attention and carry personal responsible-person risk on every missed deadline. An EOR carries all of these on its own entity.

• Under 5 Taiwan employees at typical Taipei salaries: EOR is cheaper every month. The entity overhead has nothing to amortise against at that headcount.
• Market validation phase: you are hiring 1 or 2 people to test commercial fit. Entity setup commits capital and the Foreign Investment Approval step before you know whether Taiwan will deliver.
• Project-based hires: 6 to 12 month engagements where the formation cost will not amortise before the project ends.
• Uncertain headcount trajectory: Taiwan is a priority market but you have not committed to long-term growth. EOR keeps your options open.
• Dual pension exposure you would rather not own: if you inherit any employee with pre-2005 service, the old Labor Standards Act severance clock attaches to your company. EOR keeps that liability on the partner entity until you choose to take it on.

• Sustained headcount above 9 Taiwan employees at typical salaries: the entity overhead amortises across enough people that per-head cost falls below the EOR fee.
• Local substance requirements: regulated sectors such as financial services and telecoms require a registered Taiwan company with a physical presence. EOR employment does not provide that substance.
• Local invoicing and procurement: issuing Government Uniform Invoices and bidding for public contracts both need a locally registered Taiwan company. An EOR employer does not qualify as the contracting business.
• Work rules and scale: once you pass 10 employees the law requires filed work rules. At that scale a directly held entity gives you cleaner control of policy than an EOR arrangement.
• Multi-year growth plan: you have line of sight to 15 or more Taiwan employees over 24 months. Starting formation early means your entity is ready before the crossover, not after it.

The technical mechanic is contract novation. The employment contract transfers from Teamed's partner entity to your new Taiwan company on a set date. All terms carry across. Salary, the Labor Pension account, annual leave, and the continuous service date all stay unchanged. The employee sees a different employer name on the payslip. Nothing else changes.

This matters more in Taiwan than most markets because of the dual pension history. Continuous service date drives old-system severance for anyone with pre-2005 service. A clean novation preserves it. A re-onboarding can reset it and trigger a dispute.

What we do operationally:

• Stand up your Taiwan entity through GEMO, typically around 4 to 8 weeks, while EOR keeps running in parallel.
• Register the new entity for income tax, Labor Insurance, Labor Pension, and National Health Insurance.
• Open the entity bank account and the payroll mandate.
• Novate every active employment contract on a single effective date, preserving each continuous service date.
• Migrate ongoing benefits, including any top-up medical cover, without a lapse.
• File the final EOR-period withholding and open new filings on the entity from the novation date.
• Keep the same People Ops expert as your post-graduation primary contact.

The Graduation Model exists because every other EOR makes this hard. We treat the move as something we help you plan for from the day you hire your first employee through us.

Real HR and legal experts handle your Taiwan hires from the first offer letter through every monthly filing and year-end statement. 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 Labor Pension employer line at 6%, the Labor Insurance and National Health Insurance employer shares, and the annual leave accrual that starts at 7 days once an employee passes one year of service. Nothing is hidden inside the management fee.

EOR payroll, contractor onboarding, and entity setup all live on one platform. EOR is the right model until it isn't, and we tell you the month it flips rather than waiting for you to ask. Run the Crossover Calculator to model your own numbers, then graduate to your own entity when the maths says so. Start from the Taiwan hiring overview. Key sources: Labor Standards Act and the Labor Pension Act.