COUNTRY

Written Agreements

Taiwan's law does not require that employment contracts be concluded in writing. Exceptions to this general rule are that employment contracts with foreign nationals and training contracts with technical students must be in writing.

Any written employment contract that is formed between an employee and an employer must include information regarding workplace, nature of work, working time, wages, leave, safety and health matters, etc.

Any post-employment non-competition agreement between an employer and an employee is valid only if the employer has legitimate business interests to protect and the employee has access to the employer’s business secrets. The restrictions imposed by the agreement must be reasonable in terms of duration, geographical area, professional activities, and employment targets. The employer is also required to provide reasonable compensation for the losses the employee incurs due to the non-competition clause. If any of these conditions are not met, the agreement will be invalid. The non-competition period cannot exceed 2 years, and the monthly compensation must be at least 50% of the employee’s average monthly salary.

Oral Agreements

There is no general requirement that Taiwanese employment contracts be concluded in writing. Exceptions to this general rule are that employment contracts with foreign nationals and training contracts with technical students must be in writing.

Taiwan's labor law offers no guidance on oral employment contracts.

Implied Agreements

Taiwan's labor law does not provide any guidance on implied contracts. The Civil Code states that a contract is established when the parties agree with each other, whether expressly or implicitly. If the parties agree on the necessary points but have not expressed their intentions on the non-essential points, the contract is presumed to be established. The existence of an employment relationship can be established based on the parties' behavior.

Taiwan's labor law stipulates that regular working time may not exceed 8 hours a day or 40 hours a week. An employee must receive 2 regular days off every seven days. One of these days is considered regular leave (during which the employee can agree to work for overtime pay), and the other is a mandatory rest day (during which the employee may not agree to work).

Employers must prepare and maintain employee attendance records for 5 years. The attendance records must record the attendance of employees daily and to the minute. Employers may not refuse when employees request duplicates or photocopies of the attendance records.

2025

• January 1 - Founding Day of Republic of China
• February 28 - Peace Memorial Day
• March 12 - Memorial Day of Dr. Sun Yat-sen's Death
• March 14 - Anti-Aggression Day
• March 29 - Revolutionary Martyr's Memorial Day
• April 4 - Children's Day
• May 1 - Labor Day
• July 15 - Commemoration Day of the Lifting of Martial Law
• September 3 - Armed Forces Day
• September 28 - Confucius' Birthday
• October 10 - National Day
• October 24 - Taiwan United Nations Day
• November 12 - Dr. Sun Yat-sen's Birthday
• December 25 - Constitution Day

Other holidays:

• Buddha’s Birthday - eighth day of the fourth month of the lunar calendar
• Chinese New Year - first three days of the lunar calendar
• Tomb Sweeping Day - dates vary
• Dragon Boat Festival - dates vary
• Mid-Autumn Festival - dates vary
• Chinese New Year’s Eve - the last day of the lunar calendar
• Indigenous rituals and ceremonies: the Council of Indigenous Peoples of the Executive Yuan shall announce the date of the holiday in reference to the customs of each indigenous tribe.

Under Taiwan's labor law, employees are granted paid annual leave according to the number of years during which they've been employed with the same employer, as follows:

• 3 days for service between 6 months and 1 year
• 7 days for service between 1 and 2 years
• 10 days for service between 2 and 3 years
• 14 days for service between 3 and 5 years
• 15 days for service between 5 and 10 years
• 1 additional day for each year of service over 10 years up to a maximum of 30 days

Compensation must be paid for annual paid leaves not used by employees due to contract termination. Unused annual leave may be carried over into the next year according to employer and employee agreement. However, if the leave is still unused by the end of the second year, wages must be paid for whatever leave was not used by the employee. Alternatively, these wages may be paid upon the termination of the employee's contract.

Taiwan's labor law provides medical leave for injury, sickness, or physical reasons to employees as follows:

• In the case of non-hospitalized conditions, the employee receives a total of 30 days in 1 year.
• In the case of employee hospitalization, the employee receives a leave not exceeding 1 year within 2 years.
• The sum of hospitalization and non-hospitalization sick leave should not exceed 1 year within 2 years.

Where sick leave does not exceed 30 days in one year, 50% of the employee's salary must be paid during sick leave. The employer must make up the difference if Labor Insurance payments do not reach 50% of the salary.

The employer must compensate the employee for any necessary medical expenses if the injury or sickness is due to an occupational accident. When an employee under medical treatment cannot work, the employer shall pay them compensation according to their preexisting wage.

Taiwan's labor law entitles female employees to paid maternity leave of 8 weeks. Employees who have worked for more than 6 months are paid 100% of their regular salary during maternity leave, and employees who have worked for less than 6 months are paid 50% of their regular salary. During pregnancy, an employee can be transferred to less strenuous work. The employer must neither reject her application nor reduce her wages. From January 2022, employees are also entitled to 7 days' paid leave for prenatal checkups. Employers pay for 5 days' leave, while employees can apply to the central government's competent authorities for the rest of the period.

Employees who suffer a miscarriage after the first 3 months of pregnancy are granted a maternity leave of 4 weeks. In the case of a miscarriage after being pregnant for over 2 months and less than 3 months, the female employee shall be permitted to discontinue work and shall be granted a maternity leave for 1 week. In the case of a miscarriage after being pregnant for less than 2 months, the female employee shall be permitted to discontinue work and shall be granted a maternity leave for 5 days.

Employees also receive social security benefits equivalent to their 60 days' salary and delivery expenses (equal to 30 days' salary). In case of multiple births, the benefits are increased proportionately. In case of miscarriage, the benefits are reduced by 50%.

Taiwan's Act of Gender Equality in Employment grants 7 days' paid paternity leave to employees. Employers pay for 5 days' leave while employees can apply to the central government's competent authorities for the rest of the period.

Either parent is also entitled to take unpaid parental leave not exceeding 2 years, provided that the following conditions are met:

• The employee has at least 6 months of service with the employer.
• The child has not yet reached the age of 3 years.
• The employee's spouse is working.

Minimum Wage

Taiwan's labor law states that all employees must receive wages higher than the minimum basic wage set by the Central Competent Authority after approval of the government.

Effective January 1, 2025, the minimum wage is TWD 28,590 (New Taiwan dollars) per month or TWD 190 per hour.

Salary must be paid at least twice a month unless otherwise agreed by the parties or paid in advance on a monthly basis. The same applies to cases where wages are paid on a piece-by-piece basis. Employers must prepare a payroll list and record wages, wage calculation items, total wages and other matters. Payroll records should be kept for 5 years.

Overtime, Holiday & Vacation Pay

Taiwan's Labor Standards Act defines overtime as any extra work done by the employee in addition to normal working hours. Payment for overtime is calculated as follows:

• When the overtime work does not exceed 2 hours, the employee shall be paid, in addition to the regular hourly wage, at least an additional one-third of the regular hourly rate.
• When the overtime work is over 2 hours, but the total overtime work does not exceed 4 hours, the employee shall be paid, in addition to the regular hourly wage, at least two-thirds of the regular hourly rate.

When an employer has obtained the consent of an employee to work on a holiday, the employer shall pay the employee at double the regular rate for such work.

Employees are entitled to receive their regular wages while on annual leave.

Notice Period

Employers must give advance notice to dismiss an employee as follows:

• When the employee has worked continuously for more than 3 months but less than 1 year, the notice period is 10 days.
• When the employee has worked continuously for more than 1 year but less than 3 years, the notice period is 20 days.
• When the employee has worked continuously for more than 3 years, the notice period is 30 days.

Where an employer terminates the contract without serving an advance notice, they must pay the employee wages for the advance notice period.

An employer can terminate a labor contract without advance notice for gross misconduct and violation of the labor contract.

Severance Benefits

Taiwan's labor law mandates that an employer who terminates an employment contract generally needs to provide severance pay to the employee. Employees who leave their employer's service upon the expiration of a fixed-term contract are not eligible for severance. Employees dismissed for misconduct are not eligible for severance benefits.

Severance pay for employees who began employment before 2005 is generally governed by the Labor Standards Act (LSA). Under the LSA, an employer who terminates an employment contract must provide a month's salary for each year of service as severance pay to the employee. For employees who have been employed for less than 1 year, severance must be calculated proportionally; any employment period less than a month shall be calculated as 1 month. Employers must issue severance pay within 30 days after the labor contract termination.

Severance pay is governed by the Labor Pension Act (LPA) for employees who began employment after 2005. Under the LPA, severance pay is based on seniority, and employees are paid an amount equal to half a month of average wages for every full year of employment. For periods of employment lasting less than 1 full year, a proportional amount must be paid. The total severance payment cannot exceed 6 months of average wages. Severance pay calculated under the LPA must be paid within 30 days after the labor contract termination.

Pension

In Taiwan, several programs belong to the social security framework. Labor Insurance, the Labor Pension System, and the National Pension Insurance are part of the social security framework for employees, but they serve distinct purposes and target different groups.

Labor Insurance is a mandatory employment-based insurance program designed for formal sector employees, including private companies and public organizations, between the ages of 15 and 65.

Under the Labor Pension program, employees hired after 2005 have individual pension accounts. Employers are required to deposit monthly contributions in these accounts, and employees' contributions are voluntary up to 6% of their monthly salary. Employees may start receiving benefits at the age of 60, regardless of employment status.

Finally, the National Pension Insurance program offers coverage for employees between the ages of 25 and 65 who are ineligible for any other pension program. Employees must participate in this program. Employees covered by the Labor Insurance program are excluded from the National Pension Insurance program.

Depending on the type of program, employees, employers, and the government share contributions to social insurance.

Dependents/Survivors Benefits

The mandatory Labor Insurance program provides survivors benefits in the event of death of an insured person who was eligible to receive an old-age or disability pension or an individual who had at least 15 years of contributions. Spouses, children, parents, grandchildren, and siblings are eligible beneficiaries. The pension paid to the survivors is 1.55% of the deceased's average monthly insurance salary per year of insurance coverage. The minimum pension is TWD 3,000 (New Taiwan dollars) per month. Survivors would receive lump sum benefits if the deceased employee had contributed for less than 15 years.

Under Labor Occupational Accident Insurance, survivors receive a lump sum equal to 5 months of the insured person's average salary. If no survivors qualify, the payment is 10 months of the average salary. Under the Labor Pension System, survivors receive a lump sum plus 50% of the average monthly salary for the last 6 months if the insured dies before claiming benefits. If the insured was receiving a permanent disability pension, half of that amount is paid instead. Additional survivors can receive up to 20% extra.

Under the National Pension program, when an insured employee dies before claiming benefits or dies during the effective period of insurance, their survivors are entitled to a monthly pension of 1.3% of the average monthly salary for each insurance coverage year. The minimum pension is TWD 4,049 per month.

Invalidity Benefits

In Taiwan, the mandatory Labor Insurance program provides benefits for temporary and permanent disabilities, offering hospitalization, medical, and disability pensions. For occupational injuries, the benefits are higher and include lump-sum compensation options. Permanent disability benefits are based on years of coverage and the severity of the disability, with additional allowances for dependents in specific cases.

The Labor Pension System offers individual accounts for employees, and early pensions can be claimed in case of disability before the age of 60.

The National Pension Insurance provides a disability pension for those with severe disabilities, contingent on residency, income, and asset conditions, with payments calculated based on the insured amount and coverage years with a minimum pension of TWD 5,437. However, individuals cannot receive multiple disability benefits simultaneously.