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Human Resources, Insurance, and Pension
How to find Employees and get average salaries surveys
One of the most critical aspects of developing a successful business is building a good team. Most companies in Taiwan use online human resource banks. Below are the most famous HR websites in Taiwan:
https://www.reeracoen.tw/ (specialized in Japanese-speaking workers)
You can also find the average Salaries surveys at the most prominent Human Resource Bank, www.104.com.
The minimum monthly wage
According to the Labor Standards Act (勞動基準法), the minimum monthly wage of a Taiwanese is NT$23,000.
The Minimum Salary for a foreign worker?
Foreigners employed in specialized and technical works whose monthly salary shall not be lower than the average monthly salary published by the central competent authority. Currently, the amount of the salary standard is NTD 47, 971.
Leave - Sick, Maternity, Vacation, Absence, Holidays
Employers now must give employees a regular day and a rest day off every week (7 days). There are currently 12 annual public holidays, a result of moving to a 40 hours workweek from the previous 48 hours workweek.
Maternity leave is assessed on the total time worked for a company. An employee seeking maternity leave gets full pay for eight weeks before and after childbirth, if she has worked for more than six months for the company. Less than six months of work time gets half-pay. Fathers get five days paid off around childbirth time.
Annual Leaves and used annual leaves
Annual leave is tied to the number of years served by a Taiwan employee. It moves up incrementally:
3 days for employees who have worked less than a year but more than 6 months.
7 days for employees who have worked for 1 year but not exceed 2 years.
10 days for employees who have worked for 2 years but not exceed 3 years.
15 days for employees who have worked for 3 years but not exceed 5 years.
15 days and add 1 more day for each year for an employee who has worked for 10 years. The maximum annual leaves are 30 days.
Any unused annual leave shall be settled must be settled using the employee's daily rate before the next calendar year.
Labor Insurance and Retirement Benefits Programs
All employers in Taiwan are mandatory to insured all their employees participated in 1. National Health Insurance Program, 2. Labor Insurance Program and 3. Retirement Benefits (Labor Pension).
1. National Health premium ratio for employees of private companies is currently: Employer 60% Employee 30% Government 10% and the latest rate is currently fixed at 4.69% of the insured monthly salary.
The formulas used to calculate National Health premium are as follows:
The insured (employee): Salary x insurance premium rate 4.69% x 30% x(1 + number of dependents)
Insurance unit(employer)t: Salary x insurance premium rate 4.69% x 60% x 1.61
2. Labor Insurance premium ratio for employees of private companies is currently: Employer 70% Employee 20% Government 10% and the latest rate is presently fixed at 10.5% of the insured monthly salary.
3. Labor Pension ratio for employees of private companies is currently: Employer 100% and the latest rate is currently fixed at 6% of the insured monthly salary. In addition to the mandatory employers' contribution, workers may contribute voluntarily additional sums, a maximum 6% of their monthly wages to their pension accounts.
Q: We have hired an employee in Taiwan and designated them as the director of our Taiwan company. What changes can they expect in their insurance fees and benefits?
Ans: The relationship between a Taiwan company and its director is not considered employer and employee, which means the director is not considered an employee and will not be covered under the Employment Insurance Act. This means, being the director, you will lose the company's contribution to their pension, which is typically 6% of their salary. However, as you still work for the company, you still have coverage of labor insurance.
First, he will lose his pension contributed by the company, which equals 6% of his salary.
Second, his personal contribution to the National Health Insurance fee and Labor Insurance fee will increase from 2% of his salary to 9% of his salary.
If David, a Taiwan employee, gets TWD 100,000 per month before promoted the director. One day, he gets promoted to be the director of the company and has 10,000 salaries raised per month. Is it a real raise for him?
Before David promoted to be director, his personal contribution to health insurance and labor insurance is about 2%, of his salary. The company’s contribution is about 18% of his monthly salary, which is 18,000.
After he becomes the director, his personal contribution becomes from 2,000 to 9,000 and he also lost his pension contribution from the company, equal to 6,000. So basically, David needs to pay an extra 7,000 (9,000-2,000) and also lost 6,000 pensions contributed from the company. The total monthly loss is 15,000, even though he has 10,000 salaries raised per month. For David, it may not be a good deal for David. Some companies raise their salary by more than 15% to compensate for the loss due to Taiwan's insurance and pension system.
Q: I am an American who set up a company in Taiwan. I am also the manager of the company. What kind of insurance plan and pension plan should I insure myself?
1. Health Insurance: Compulsory
2. Labor Insurance:
(A) Labor insurance is a benefit for employees. If there are no other employees, the employer cannot insure himself in the labor insurance plan.
(B) if there is more than one employee, the employer opts to insure the labor insurance for himself.
3. Labor Pension: The pension plan does not for the employer.
Q: Can the representative office of a foreign company insure health insurance, labor insurance, and pension for its employees in Taiwan?
Ans: Yes. A foreign company’s representative office may voluntarily insure its employees to participate in labor insurance, health insurance, and labor pension.
Insurance Calculation Examples:
Example: David works at company ABC and makes NT$34,800 per month. His wife is a full-time housewife and they have no kids. The amounts of the National Health Insurance Program, Labor Insurance Program and Retirement Benefits (Labor Pension) that each party be responsible is as the below table.
David should get NT$33,090 after deducting NT$1710 (NT$979 for National Health Insurance and NT$731 for Labor Insurance).
The total expense of ABC company is NT$41,023, which NT$ 34,800 is for David's monthly salary and NT$6,223 is the total cost for National Health Insurance Program, Labor Insurance Program, and Retirement Benefits )
The government pays 528 for David's National Health Insurance and Labor Insurance.