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Undoubtedly, payroll is a critical process for any organization. The pay cycle in Taiwan refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.

The payroll cycle in Taiwan is generally monthly, and payments are usually paid on the 15th of each month.

Paying a 13th-month salary is customary in Taiwan and is generally paid during the Lunar New Year.

Effective January 1, 2024, the minimum wage will increase from TWD 26,400 to TWD 27,470 per month. The rate of increase is around 4.05%. 

The hourly minimum wage will increase from TWD176 to TWD183. 

The first two hours of overtime work must be compensated at one-third (1/3) more than normal pay, while any additional overtime work must be compensated at two-thirds (2/3) more than normal pay.

Overtime work is limited to four hours a day and 54 hours each month, but not more than 138 hours over three months.

An employee who consents to work on a holiday is entitled to double wages. Employees may choose to receive compensatory leave in lieu of overtime pay.

Employers who wish to have female employees work overtime must have the labor union agree to the overtime provisions.

Companies with at least 30 employees are required to report adjustments to employees' overtime hours to local authorities.

Employers must maintain records of the number insured employees, working conditions and work records for at least five years. 

Employers must maintain an employee card for each employee and keep these cards for at least five years from the date the worker's employment is terminated. The cards must contain information on the employee's name, sex, date of birth, national identification number, address, dependents, dates of employment, position, working hours, salary and periods of leave without pay.

Employers are prohibited from discriminating against any job applicant or employee on the basis of race, class, language, thought, religion, political party, place of origin, place of birth, gender, gender orientation, age, marital status, appearance, facial features, disability, horoscope, blood type or past membership in any labor union.

• Personal details and identification information (e.g., date of birth, nationality, picture, gender, ID card, passport numbers and other national ID numbers as required, immigration status); 
• Physical and electronic address details (e.g., private telephone number, private email and/or postal address and business telephone number); 
• Education and employment information 
• Family information (e.g., marital status, and details of any family or personal relationships) 

There is no standard probation period in Taiwan. Instead, the Act allows employers and employees to negotiate the duration of probation. However, the usual practice is that a three-month trial period is used.

There are 15 public holidays per year.

• Jan 1: International New Year
• Jan. 21 to Jan. 26: Chinese New Year
• Feb. 28: Peace Memorial Day
• Apr. 4: Children's Day
• Apr. 5: Qing Ming Jie
• May 1: Labor Day
• Jun. 3: Dragon Boat Festival
• Sept. 29: Mid-Autumn Festival
• Oct. 10: National Day

Employers must provide 30 days of sick leave per year paid at 50% of normal wages. Employees are entitled to additional monetary benefits from the Bureau of Labor Insurance. Additionally, employees may take additional unpaid leave after having exhausted their original 30 days of sick leave.

Employers must provide pregnant employees with eight weeks of paid maternity leave. Pregnant employees who miscarry are granted four weeks of paid maternity leave. The leave must be paid at full wages for employees who have worked more than six months for the same employer, and at half-wages for employees who have worked for less than six months.

An employee whose spouse is in labor is entitled to 7 days of paid leave.

Personal Leave - Employees may take up to 14 days per year of unpaid personal leave.

* Miscarriage, short-term pregnancy, and sick leave do not reduce the full attendance bonus. 

The termination process is standard in Taiwan based on the Labour Law requirements, unless an employer can provide sufficient cause for dismissal without notice (due to misconduct, etc.)

Notice of termination must be written and sent to the relevant governmental authorities.

• employed more than three months but not more than one year: 10 days of notice;
• employed more than one year but not more than three years: 20 days of notice;
• employed more than three years: 30 days of notice

In Taiwan, severance pay is mandatory when applicable and is determined by the employee’s length of service and the start date of the employment contract.

If the employee’s contract start date is before 2005, the Labour Standards Act requires the calculation of the severance pay to be one month’s salary for each year of employment.

If the employee’s contract start date is after 2005, the Labour Standards Act requires severance pay to be half a month’s salary for each year of employment.

The two main types of visa for Taiwan are:

• Taiwan Visitor Visa (for short stays)
• Taiwan Resident Visa (for long stays)

The Visitor Visa for Taiwan is for short-term stays of up to 90 days. The Taiwanese Visitor Visa is issued for tourism, social visits, business, attending conferences and events, and other approved purposes that do not require taking up paid employment or obtaining an additional permit.

The Taiwan Resident Visa is for foreigners who wish to live in Taiwan for longer than 90 days for a specific purpose, such as working or studying. As such Taiwan Resident Visas are divided into the following:

• Taiwan Work Visa
• Taiwan Student Visa
• Taiwan Family Reunification Visa
• Taiwan Entrepreneur Visa
• Taiwan Working Holidays Visa

Work permits are issued by the Council of Labour Affairs (CLA) upon request from a Taiwanese employer.

Work permits are valid for up to three years, although an employer can apply for an extension on behalf of an employee, which the employer should submit within four months of the expiration date. When an employee changes employers after arriving in Taiwan, the new employer must apply for a new work permit. In addition, the previous employer must apply to have the original work permit canceled with the Council of Labour Affairs.

When the permit is issued in a foreign country, it must be verified by a representative from a local Taipei Economic and Cultural Office or Taiwan representative office in the country that issued it.

There is an approved list of employment for foreign nationals in Taiwan, including school or foreign-language teachers, specialized or technical experts, a director, executive, or manager of a business set up by or invested in by a foreigner.

Income tax declaration requirements for foreigners:

With effect from April 12, 2023

• The residence period is determined through the “Certificate of Entry and Exit Date” for foreigners.

• Foreign employees staying beyond 183 days are obliged to apply progressive rates to their income.

• Withholding rates are only applied when employees have stayed less than 183 days in Taiwan.

• Foreign employees with foreign employers would get an exemption of 90 days.

The employer shall not request that applicants undergo a background check against their will; otherwise, the employer would violate the Employment Service Act and be fined at least T$300,000 but not more than T$1,500,000.