If you’re planning to hire employees in Taiwan or expand your business through an Employer of Record (EoR), it’s important to understand the employer contribution system. This guide explains the mandatory employer contributions in Taiwan, how they are calculated, and what global employers should consider for compliance. On average, the total employer contribution adds around 13%-20% (as cap applies to different contributions) to the employee’s gross monthly regular salary.
What Are Employer Contributions in Taiwan?
Employer contributions in Taiwan refer to mandatory payments that businesses must make on behalf of their employees to various government-mandated programs. These contributions form part of the total cost of employment and are regulated under Taiwan’s Labor Standards Act and associated social insurance laws.
Mandatory Employer Contributions in Taiwan
Taiwanese employers are required to contribute to the following six statutory programs:
1. Labour Insurance (勞工保險) Capped at NTD 45.8k
- Total rate: ~11.5%, shared between employer (70%), employee (20%), and government (10%)
- Employer share: 70% of the premium, approximately 8.05%
- Covers general risks including disability, death, and retirement pensions
2. Occupational Accident Insurance (職業災害保險) Capped at 72.8k
- Introduced under the Occupational Accident Insurance and Protection Act (2022)
- Employer share: 0.11% to 0.93%, depending on the industry risk level
- Fully paid by the employer
- Covers injuries, illnesses, disability, and death resulting from work-related causes
3. National Health Insurance (全民健康保險) Capped at NTD 313k
- Total rate: ~5.17%, shared between employer (60%), employee (30%), and government (10%)
- Employer share: 60% of the premium multiply by the average number of dependents of 1.56, equivalent to ~5.17% x 60% x 1.56 = 4.84%
- Provides access to Taiwan’s universal healthcare system
4. Labour Pension (勞工退休金) Capped at NTD 150k
- Employer contributes 6% of the employee’s monthly salary
- Paid into an individual pension account under the Labor Pension Act
5. Employment Insurance (就業保險) Capped at NTD 45.8k
- Total rate: ~1%, shared between employer (70%), employee (20%), and government (10%)
- Employer share: 70% of the premium, around 0.7%
- Supports unemployment benefits, job training, and employment counseling
6. Supplementary Insurance (補充保險費)
- Rate: ~2.11%
- Applies to irregular income such as bonuses and incentives
- Employers must declare and contribute when applicable thresholds are met
- Require withholding of the premium for the employees’ contribution
Contributions Are Based on Salary Tiers
All contribution amounts are calculated based on a salary classification system set by Taiwan’s labor authorities. Each employee’s reported salary is matched to a designated salary tier, and contributions are calculated based on the minimum salary amount of that tier, not the employee’s full actual earnings.
This means the stated employer share percentages above are minimum rates based on the ceiling amount within each tier
Why This Matters for International Employers
For foreign companies hiring in Taiwan, complying with employer contribution requirements is essential for:
- Staying compliant with local labor laws
- Avoiding penalties for underreporting or late payments
- Maintaining employee satisfaction with legal benefits
Hire in Taiwan Without Setting Up a Local Entity
Working with a trusted Employer of Record (EoR) in Taiwan like 宏才有限公司 allows you to onboard and manage employees legally, while your EoR partner handles:
- Payroll
- Social security contributions
- Tax withholdings
- Compliance with local employment law
Final Thoughts
Understanding Taiwan’s employer contributions is key to responsible and compliant hiring. By working with a qualified EoR provider, you can simplify the process and focus on building your local team.
If you’re ready to hire in Taiwan without establishing a local entity, 宏才有限公司 is here to help. Contact us today to learn more about our EoR services tailored to international businesses.
