Taiwan runs a multi-layer statutory payroll system that separates Labour Insurance, occupational accident coverage, pension contributions, and National Health Insurance into four distinct employer obligations, each with its own insured salary caps, contribution rates, and administrative deadlines. The 2026 calendar year brings a meaningful change for foreign employers: the new Labour Pension system now covers all foreign professionals, closing an exemption that previously let non-Taiwanese employees opt out entirely. If you’re hiring in Taiwan, this guide gives you the exact numbers you need to budget and comply.
Labour insurance
Labour Insurance (LI) is Taiwan’s core social insurance program, covering employees for ordinary injuries, occupational diseases, maternity, disability, and death. Contributions are calculated on the employee’s insured salary, which is bracketed into government-set grades rather than applied to the exact payroll figure.
The total LI rate in 2026 is 12.5%, which includes a 1% employment insurance component. The split across parties is: employer 8.75% (70% of the total), employee 2.5% (20%), and the government 1.25% (10%). The minimum insured salary is NT$29,500/month, matching the statutory minimum wage. The cap on insured salary is NT$45,800/month, meaning any wages above that threshold don’t attract additional LI contributions.
As the hiring entity, you withhold the employee’s 2.5% from their pay and remit the combined employer-plus-employee share to the Bureau of Labour Insurance each month.
Occupational accident insurance
Occupational Accident Insurance (OAI) is a fully employer-paid obligation. The employee pays nothing, and there’s no government co-contribution.
The rate ranges from 0.11% to 0.93% of the employee’s insured salary, depending on the industry risk classification assigned to your registered business activity. Lower-risk sectors such as professional services sit toward the bottom of the range. Higher-risk categories such as construction or manufacturing attract rates closer to the ceiling.
OAI covers employees for work-related injuries, occupational diseases, and associated medical or disability costs. You’ll need to confirm your industry code with the Bureau of Labour Insurance to apply the correct rate from day one of employment.
Labour pension contributions
Taiwan’s Labour Pension system operates under two frameworks: the Old System (applicable to employees who enrolled before July 2005 and chose to stay) and the New System introduced in 2005. For most employers hiring today, the New System is the operative one.
Under the New System, you must contribute a minimum of 6% of each employee’s monthly wages into their individual pension account, held at the Bureau of Labour Insurance. The contribution ceiling is NT$150,000/month in wages, so employers with highly-paid staff aren’t required to contribute on salary above that figure. Employees can also make voluntary additional contributions of up to 6% from their own pay.
From January 1, 2026, the New System extends to all foreign professionals working in Taiwan. Foreign employees who were already on payroll before that date and wish to remain outside the system must formally opt out by June 30, 2026. After that deadline, all workers regardless of nationality are covered, and the 6% employer contribution becomes mandatory across the board.
National health insurance (nhi)
National Health Insurance gives employees and their dependents access to Taiwan’s universal healthcare system. Like LI, NHI contributions are calculated on a bracketed insured salary rather than the exact gross wage.
The total NHI rate in 2026 is 5.17%. Employers pay 60% of that total, which works out to approximately 3.102% of the insured salary. Employees pay 30% (approximately 1.551%), and the government covers the remaining 10%. You remit the combined employer-plus-employee share to the National Health Insurance Administration.
There’s also a supplemental premium of 2.11% that applies to certain income categories falling outside standard payroll, including bonuses, professional fees, and part-time income above defined thresholds. If you pay a bonus that triggers this threshold, you’re responsible for withholding and remitting the supplemental premium on that payment.
Income tax withholding
As the employer, you’re responsible for withholding individual income tax from employee salaries on each payroll run and remitting it to the National Taxation Bureau. Taiwan runs a five-bracket progressive system based on net taxable income.
The 2026 withholding brackets are:
| Net taxable income (NT$) | Tax rate |
|---|---|
| 0 – 610,000 | 5% |
| 610,001 – 1,380,000 | 12% |
| 1,380,001 – 2,770,000 | 20% |
| 2,770,001 – 5,190,000 | 30% |
| 5,190,001 and above | 40% |
Taiwan requires payroll to be processed twice per month, so you’ll withhold and remit on a semi-monthly basis. Employees file their own annual income tax return each May to reconcile the amounts withheld against their actual annual liability, but the employer’s obligation is to withhold at the correct rate throughout the year.
Non-resident employees are subject to different withholding rules under Taiwan’s Income Tax Act. If you’re hiring someone who doesn’t meet the 183-day residency threshold, confirm the applicable rate before your first payroll run.
Total employer cost: worked example at nt$50,000/month
This example uses a monthly wage of NT$50,000 and an Occupational Accident Insurance rate of 0.21%, which is representative of a professional services or technology employer. LI and NHI contributions are capped at their respective insured salary ceilings where applicable.
For Labour Insurance, the insured salary caps at NT$45,800. The employer’s LI contribution is 8.75% of NT$45,800 = NT$4,008.
For Occupational Accident Insurance, applying 0.21% to the insured salary of NT$45,800 gives NT$96.
For Labour Pension, there’s no cap in play at NT$50,000 (the ceiling is NT$150,000). The employer contributes 6% of NT$50,000 = NT$3,000.
For NHI, the insured salary at NT$50,000 falls within the standard bracket. Applying the employer’s 3.102% share gives approximately NT$1,551.
| Contribution | Basis | Employer rate | Employer cost (NT$) |
|---|---|---|---|
| Labour Insurance | NT$45,800 (capped) | 8.75% | 4,008 |
| Occupational Accident Insurance | NT$45,800 (capped) | 0.21% | 96 |
| Labour Pension | NT$50,000 | 6.00% | 3,000 |
| National Health Insurance | NT$50,000 | ~3.102% | 1,551 |
| Total employer on-cost | 8,655 |
The total employer on-cost is NT$8,655 on a NT$50,000 base salary, representing approximately 17.3% above the gross wage. Budget this figure into any cost-per-hire or total compensation modelling for Taiwan headcount.
How an EOR simplifies taiwan employer tax compliance
Taiwan’s payroll obligations span four separate government agencies, involve bracketed salary grades that don’t map directly to gross wages, and in 2026 include a new pension coverage rule for foreign employees with a June 30 opt-out deadline. An Employer of Record (EOR) manages all of this on your behalf: registering with the relevant bureaus, calculating contributions across each scheme, processing semi-monthly payroll, and handling remittances and filings so nothing falls through. For companies that want to hire in Taiwan without setting up a local entity, EOR services remove the compliance risk entirely. Book a demo to see how RemotePass handles Taiwan employer tax compliance end to end.
