Taiwan’s Labour Standards Act (LSA) sets out a comprehensive framework of statutory leave entitlements and employer obligations that apply to all workers in Taiwan, regardless of their employer’s country of incorporation. If you’re hiring in Taiwan, you need to understand these rules before your first employee starts. This guide covers every major leave category, National Health Insurance contributions, and the bonus practices that shape competitive compensation in the Taiwanese market.
Annual leave (special leave)
Under the LSA, paid annual leave, referred to as “special leave,” accrues in brackets tied to continuous service with the same employer. The entitlement increases as tenure grows.
| Service length | Annual leave days |
|---|---|
| 6 months to less than 1 year | 3 days |
| 1 year to less than 2 years | 7 days |
| 2 years to less than 3 years | 10 days |
| 3 years to less than 5 years | 14 days |
| 5 years to less than 10 years | 15 days |
| 10 or more years | 16 days, plus 1 additional day per year of service beyond 10 (capped at 30 days total) |
Employees schedule annual leave at a time of their choosing, though employers can discuss timing with staff to avoid operational disruption. Any unused leave at the end of the leave year must be paid out in full. Leave can be carried over by mutual agreement, but if it remains unused at the end of the extended period, it must be paid out at that point too.
Public holidays
Taiwan observes 16 public holidays per year under the central government’s official calendar. This count includes national holidays and any adjusted working days designated by the government for the year.
If an employee works on a public holiday, you must pay double wages for that day. Compensatory leave in lieu of double pay isn’t an option unless both parties agree in writing. Voting days declared for national elections are treated as paid holidays, and employees can’t be required to work on those days.
Sick leave
Employees are entitled to 30 days of ordinary sick leave per year, paid at 50% of regular wages. This is distinct from injury or illness arising from work, which falls under occupational sick leave rules and is paid at full wages for the duration of the recovery.
2026 Proportional bonus rule
A rule change taking effect in 2026 limits how employers can handle full attendance bonuses when an employee takes sick leave. Previously, some employers deducted the entire monthly attendance bonus if an employee missed even one day to illness. Under the updated rule, deductions must be proportional: if an employee takes one sick day, you can only reduce the attendance bonus by a proportional share, not cancel it entirely.
Ten-day protection
Employees can’t face adverse treatment, including dismissal or demotion, for taking up to 10 sick days per year. This protection applies regardless of whether those days fall within the first 30 sick-leave days entitlement.
Maternity leave
Pregnant employees are entitled to 56 days (8 weeks) of maternity leave. Pay during this leave depends on length of service: employees who have worked for you for more than 6 months receive full pay; those with less than 6 months of service receive half pay.
Maternity leave can start before the birth. The split between prenatal and postnatal leave is flexible, though at least 42 days must be taken after delivery. Employers can’t terminate an employee during pregnancy or maternity leave.
Paternity and parental leave
Paternity leave
Fathers are entitled to 5 days of paid paternity leave, to be taken within 30 days of the child’s birth. This applies to all employees regardless of service length.
Parental leave
Either parent can take unpaid parental leave of up to 2 years per child, available once the employee has been with you for at least 6 months. The leave can be taken in one continuous block or in two separate periods.
Employees on parental leave may be eligible for a government wage subsidy of 60% of their insured salary under the Labour Insurance program, for up to 6 months, provided they’ve been insured under Labour Insurance for at least 1 year before the leave begins. This subsidy comes from the government, not the employer.
Other statutory leave
Menstrual leave
Female employees are entitled to 1 day of menstrual leave per month. This leave is paid at half wages and is separate from the ordinary sick leave entitlement. Critically, taking menstrual leave can’t trigger a deduction from a full attendance bonus.
Wedding leave
Employees getting married are entitled to 8 days of paid wedding leave at full wages. The leave must be taken within 3 months of being granted and can start as early as 10 days before the marriage registration date. It can’t be carried over or converted to pay in lieu.
Funeral leave
Employees are entitled to paid bereavement leave at full wages, with the duration depending on the relationship to the deceased.
- 8 days: parent or spouse
- 6 days: grandparent, child’s spouse, or child
- 3 days: sibling, spouse’s parent, or spouse’s grandparent
Funeral leave must be taken within a reasonable time around the bereavement and isn’t transferable.
National health insurance as an employer benefit
Taiwan operates a universal National Health Insurance (NHI) scheme that covers all employees and their dependents, regardless of nationality. Enrollment is mandatory for all employees working in Taiwan.
The contribution is split between employer, employee, and the government. Employers contribute approximately 3.1% of the employee’s insured salary; employees contribute 1.551%. The NHI covers outpatient visits, inpatient care, prescriptions, dental, and a range of specialist services. For your employees, this represents comprehensive healthcare access at a low personal cost, which is a genuine retention-relevant benefit rather than a bureaucratic formality.
Year-end bonus and supplemental benefits
Statutory profit-sharing bonus
LSA Article 29 requires employers to share profits with employees when the business turns a profit. The amount isn’t fixed by law; it’s tied to the employer’s actual financial performance in the year. This means the bonus is discretionary in size but legally required if profits exist, and it can’t simply be withheld as a matter of policy.
13Th month bonus
Separately from the statutory requirement, a 13th month payment before Lunar New Year is a deeply embedded cultural practice in Taiwan. Most employers in all sectors provide it, and candidates factor it into their total compensation expectations. Skipping it puts you at a competitive disadvantage when hiring.
Supplemental benefits
In the technology and professional services sectors, supplemental benefits are common recruiting tools. Private health insurance top-ups that extend NHI coverage (covering international care, higher-tier hospital rooms, or dental) are widely offered. Stock options and equity grants are standard in the tech sector and expected at senior levels. Meal allowances, transport subsidies, and flexible work arrangements are also common.
How an EOR manages benefits in taiwan
Managing Taiwan’s leave entitlements, NHI contributions, and bonus obligations accurately requires a local compliance infrastructure that most foreign companies don’t have in place when they start hiring. An Employer of Record (EOR) employs workers on your behalf in Taiwan, handling payroll, statutory contributions, and leave administration so you stay compliant without needing a local entity. RemotePass operates across Taiwan and the wider Asia-Pacific region, giving you the EOR services needed to hire quickly and compliantly. Book a demo to find out how RemotePass structures compliant, competitive benefits packages for employees in Taiwan.
