Running payroll for employees in Taiwan requires close attention to a layered system of social insurance contributions, statutory deductions, and labor law obligations. Foreign companies hiring in Taiwan face compliance requirements across Labour Insurance, National Health Insurance, the Labour Pension Act, and income tax withholding. This guide covers every element of Taiwan payroll for 2026, including updated rates, year-end bonus rules, and what’s changed this year.
Payroll cycle and pay dates
Taiwan’s Labour Standards Act requires employers to pay wages at least twice per month. In practice, most companies split pay into a mid-month advance and a month-end settlement, though the exact dates are set by the employment contract or internal policy.
Wages must be paid in full and on time. Delays or unauthorized deductions are a direct violation of the Labour Standards Act and can trigger investigations from the Ministry of Labour. Keep payroll records for at least five years.
The minimum wage in Taiwan from January 1, 2026 is NT$29,500 per month for salaried employees and NT$196 per hour for hourly workers. These figures apply to all workers covered by the Labour Standards Act, regardless of nationality.
Mandatory payroll deductions
Every pay cycle, you’re required to withhold certain amounts from employee gross pay before the net amount is disbursed. Three items make up the core of employee-side deductions.
Labour Insurance (LI): Employees contribute 2.5% of their insured salary toward Labour Insurance. The insured salary is capped at NT$45,800 per month, so the maximum employee LI deduction is NT$1,145 per month. LI covers work injury, disability, maternity, old age, and death benefits.
National Health Insurance (NHI): Employees contribute approximately 1.551% of their insured salary for NHI. A supplemental NHI premium of 2.11% also applies to non-regular income above a set threshold, including bonuses that exceed four times the monthly insured amount in a single payment. You’re responsible for withholding the supplemental premium at the time of payment.
Income tax withholding: Taiwan uses a monthly wage withholding system. For 2026, the withholding exemption threshold is NT$90,500 per month: employees earning below this amount have no tax withheld at source. For employees above the threshold, you apply withholding based on a published table issued by the National Taxation Bureau. The annual income tax brackets for 2026 are: 5% on income up to NT$610,000; 12% on NT$610,001 to NT$1,380,000; 20% on NT$1,380,001 to NT$2,770,000; 30% on NT$2,770,001 to NT$5,190,000; and 40% on income above NT$5,190,000. Employees reconcile their final tax liability in the annual filing period (May each year), taking into account the personal exemption of NT$101,000, the salary/wages special deduction of NT$227,000, and the standard deduction of NT$136,000 for a single filer or NT$272,000 for married filers.
Employer contributions on top of salary
Beyond deducting from employees, you’re required to contribute additional amounts from your own budget. These costs sit on top of gross salary and aren’t visible in the employee’s payslip.
Labour Insurance: Employers contribute 8.75% of each employee’s insured monthly salary toward Labour Insurance, up to the NT$45,800 cap. The total LI rate (employer plus employee plus a government share) is 12.5%.
Occupational Accident Insurance (OAI): This is an employer-only contribution. The rate ranges from 0.11% to 0.93% depending on the industry risk classification. It’s calculated on the insured salary and covers work-related injuries and occupational diseases.
Labour Pension: Under the New Labour Pension System introduced by the Labour Pension Act, employers must contribute at least 6% of each employee’s monthly wages to an individual pension account held at the Bureau of Labor Funds. The salary ceiling for pension contribution purposes is NT$150,000 per month. Employees may also voluntarily contribute up to an additional 6% from their own salary, and those voluntary contributions are tax-deductible for the employee. The employer’s 6% is mandatory regardless of employee tenure or hours worked.
National Health Insurance: Employers contribute approximately 3.102% of the insured salary per employee. The total NHI contribution rate is 5.17%, split across employer, employee, and a small government subsidy.
Together, the mandatory employer-side costs add roughly 18% to 20% on top of each employee’s gross salary, depending on the OAI rate for your industry. Budget for this from day one.
Year-end bonus rules
Taiwan’s year-end bonus rules are frequently misunderstood by foreign employers. The short version: a year-end bonus isn’t automatically owed to every employee every year.
Under Article 29 of the Labour Standards Act, employers are required to distribute a share of profits to employees when two conditions are both met: the company has generated surplus profit in that fiscal year, and the employee worked the full year without fault. The amount isn’t fixed by statute. It’s determined by the employer based on the profit available, so a loss-making year creates no obligation under Article 29.
The common practice in Taiwan is to pay a 13th-month bonus before Lunar New Year. In competitive hiring markets, employees treat this as expected, and skipping it can hurt retention. That said, “common practice” isn’t the same as a legal mandate.
If your employment contracts or company policies explicitly promise a year-end or 13th-month payment, that promise is contractually binding regardless of whether the company made a profit. Review your contract templates carefully before making any written commitments about bonus amounts.
2026 Payroll updates
Several key figures changed at the start of 2026 and affect how you calculate payroll this year.
Monthly withholding threshold: The income tax withholding exemption limit has been updated to NT$90,500 per month for 2026. Employees earning up to this amount have no income tax withheld at source during the year.
Minimum wage increase: Effective January 1, 2026, the monthly minimum wage rose to NT$29,500 and the hourly rate to NT$196. Adjust any employees previously at the old minimum.
Labour Pension extended to foreign professionals: Foreign nationals working in Taiwan under the Employment Gold Card or recognized as specialized/technical personnel are now eligible, and in many cases required, to participate in the new Labour Pension system. This means the 6% employer contribution applies to these workers just as it does to Taiwanese employees. If you employ foreign professionals, confirm their pension enrollment status.
LI rate consolidation: The Labour Insurance rate structure has been consolidated with a combined total of 12.5%, split as 8.75% employer, 2.5% employee, and a government contribution making up the balance. Make sure your payroll system reflects the current rate, not legacy figures.
Payroll compliance and record-keeping
Taiwan’s labour laws require employers to issue itemized payslips at each pay cycle. The payslip must show gross wages, each deduction line item, and net pay. Employees are entitled to this information and you can’t withhold it.
Payroll records must be kept for a minimum of five years. This includes wage ledgers, deduction records, attendance records if relevant to pay calculation, and any documentation of bonus payments or deductions from wages. Labour inspectors from the Ministry of Labour can request these records with relatively little notice.
Employment contracts must be written in Mandarin Chinese. Bilingual contracts with a Chinese version alongside a foreign-language version are acceptable and often preferable when dealing with foreign employees, but the Chinese text governs in any dispute. Don’t rely on an English-only contract.
How an Employer of Record (EOR) manages payroll in taiwan
An Employer of Record takes on the legal employer role in Taiwan, handling registration with labour and tax authorities, calculating and remitting all statutory contributions, issuing compliant payslips, and managing year-end tax filings on your behalf. For foreign companies without a local entity, this removes the need to establish a Taiwan branch or subsidiary before hiring. RemotePass provides EOR services across Taiwan, managing every layer of payroll compliance so you can onboard talent quickly and stay compliant without building local expertise from scratch. Book a demo to see how RemotePass manages Taiwan payroll compliance from deductions to year-end filings.
