How to Hire Remote Employees In

Taiwan

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The Basics

Currency
New Taiwan Dollar (TWD)
Employer Taxes
12.65% + health insurance premium
Payroll Frequency
Monthly
Official Language
Mandarin Chinese
OVERVIEW

Employment in

Taiwan

Hire Independent Contractors

Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.

For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.

For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.

As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.

While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.

Benefits of Hiring Independent Contractors

  • Reduced overhead: Lower cost in expenses, payroll, benefits, and more.
  • Greater flexibility: Contractors can be brought on as-needed. If not a good fit, you simply don’t have to move forward with the contract.
  • Reduced legal risk: Contractors aren’t usually protected by employment anti-discrimination and workplace safety laws.

Disadvantages of Hiring Independent Contractors

  • Risk of Misclassification: Not only does this deny workers their proper protections, it can also result in steep penalties and damage to your company. If the IRS determines that employee misclassification has occurred, you will be liable for a percentage of the employees wages, FICA contributions, penalty fines, unpaid taxes, up to a year in prison, and more.
  • Lack of Control: Contractors are drawn to being independent because it gives them greater control over the work they perform and who they work with. Because they’re not employees, you can’t tell them what to work on and how it should be done.
  • Lack of Loyalty: Contractors come and go as-needed. Many companies hire contractors for short-term work, which makes it difficult to cultivate loyalty.
  • Increased Scrutiny: Using Independent Contractors typically leads to an increased risk of being audited.
EMPLOYMENT IN
Taiwan

Set up a subsidiary in

Taiwan

A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.

Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Taiwan can be expensive, stressful, and time-consuming. It's not for the faint of heart.

To set up a subsidiary in Taiwan, you have to:

  1. Register your business name and file articles of incorporation
  2. File for local bank accounts
  3. Learn and keep track of the local employment laws
  4. Set up local payroll
  5. Hire local accounting, legal, and HR people

If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Taiwan.

EMPLOYMENT IN
Taiwan

Use an Employer-of-Record (EOR)

An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.

An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.

Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.

At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.

Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:

  • Ability to attract talented and motivated employees from all over the world.
  • Full legal compliance: There is no risk of violating local employment laws.
  • Transparency: Employees are still your employees. All the work, processes, operations and day-to-day business belong to you, the company, just like with any other employee. Panther just takes on all of the responsibilities, obligations and admin work related to your team's employment.
  • No risk of misclassification

Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.

Hire with Panther

Paying Remote Employees

Paying employees in Taiwan is not the same as paying workers in your own country. Employees have to be paid using Taiwan's employment and payroll standards.

This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.

Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.

After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:

Pay through a local entity

One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.

Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.

Work with an EOR

Outside of EORs acting as the full admin employer, many also provide remote payroll.

For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.

We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.

Taiwan

 Specific Information

Working Hours

Employees in Taiwan work 8 hours a day with a week being 40 hours, not including overtime. It is also mandatory in Taiwan to have two days off every 7 days. One of these days off is compulsory, the other flexible. The difference between these two resting days is that the employee cannot agree to work on the mandatory day off while working on a flexible day is negotiable. Overtime is paid to employees working on flexible days. 

Overtime

Working hours cannot exceed 12 in one day, and maximum overtime is 46 hours monthly.

Overtime is paid at 134% for the 8th-10th hours (daily) and 167% for the 10th-12th hours (daily).

Overtime on “flex-day” is paid at 134% for the first two hours, 167% for 2nd-8th hours, and 267% for 8th-12th hours.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Taxes

Payroll Tax

Employer

12.65% + health insurance premium
- Employer Contributions

Minimum Wage

The minimum wage is NT$24,000 monthly/NT$160 hourly.

Payroll

Pay Cycle

Salaries are paid monthly for work done between the 1st and last day of the month. Payday is typically on the 15th of every month.

13th Salary

Not required by law but is customary.

Leave

Paid Time Off (PTO)

Annual leave is dependent on the years an employee has worked for the employee.  

  • 3 days after 6 months of service 
  • 7 days after a completed year 
  • 10 after 2 years 
  • 14 days after 3 years 
  • 15 days after 5 years 
  • 1 additional day is given every year after 10 years. The maximum annual leave is 30 days.  

Unused vacation days carry over to the following year. If those vacation days aren’t used within two years, they will be converted into salary. Payment is based on the employee’s first-year wage.  

If unused annual leave is not carried over to the next year, or if the employee’s contract is terminated by the end of the first year, regular daily wages are paid for unused days off. Employees’ daily salary is the amount they received for working regular hours a day before their employment contract was terminated or their service ended. In cases when employees are paid monthly, their daily salary is also based on their regular working hours and wages paid to them one month prior to the end of their employment or the termination of their contract. Yet for them, this amount should be divided by 30. The amount substituted for the annual leave is paid on the employees’ regular payday or within 30 days of the end of their working year.  If employees are fired, employers should give them their annual leave payment without delay.  

Public Holidays

12 public holidays. 

Sick Days

Employees are entitled to two types of sick leave in Taiwan. They can have 30 days of ordinary sick leave a year, provided they are not hospitalized, or they can also take one year of sick leave within a two-year period when they are hospitalized. What is noteworthy is that the combined number of sick days taken within two years cannot exceed one year.  

If employees are sick up to 30 days within one year, they receive half-pay. When employees’ sickness is covered by labor insurance, but its compensation is less than half of the employee’s salary, the employer pays the difference. When the employee is left injured or disabled due to an accident at work, the employer pays him or her full salary. If after two years, the employee does not recover from the occupational injury or disability and is diagnosed as unable to fulfill former tasks, the employer pays him or her one amount of 40 months’ average wage, provided the employee does not qualify for disability. When employees use up all their sick days, they can ask for additional unpaid days off. The maximum of unpaid sick leave the employee can take is 1 year. There is also a possibility to recover sick pay from the state.   

Maternity Leave

Expecting mothers are entitled to 8 weeks leave paid at 100% rate unless the employee has worked at the company for less than 6 months, in which case the rate is lowered to 50%.

Paternity Leave

New fathers are entitled to 5 days of fully paid paternity leave.

Parental Leave

Employees can take parental leave if they have worked for the same employer for at least 6 months. The employee’s child should be younger than 3 years of age and his or her spouse should be employed. Paternal leave is unpaid.

Other Leave

Bereavement Leave

  • Spouse or parent – 8 days 
  • Grandparent, parent-in-law, or child – 6 days 
  • Sibling or grandparent-in-law – 3 day

Termination

Termination Process

Taiwanese employment law is regulated by the Labor and Standards Act (LSA). Both employer and employee are required to provide valid reasoning for termination as well as a notice period.

Notice Period

Employers are expected to give notice to their employees based on the length of their employment:  

  • 10 days’ notice to employees for service of more than 3 months and less than a year 
  • 20 days’ notice for service of more than one year but less than 3 years. 
  • 30 days’ notice is provided to employees who have done 3 or more years of service.

Severance Pay

For employees who began employment pre-2005 under the Labour Standards Act, severance pay will be equal to one month of average wages for each year of service, provided the employee was employed by the same employer continuously. Those employees who have worked for less than a year receive severance pay in proportion to the months of service.

For employees who began employment post-2005 under the Labour Pension Act, severance pay is also calculated based on one month’s average wages for each year of service. However, the amount that the company pays for each year of service is equal to 50 percent of the employee’s average monthly salary.

Probation Period

Taiwan does not have a minimum or maximum trial period. 3 months is customary.