Employer of record in Taiwan: costs, rules and how to hire
Picture this: you've agreed terms with a product manager in Taipei on a Friday. By the following Wednesday, an Employer of Record (EOR) can have that person on a compliant payroll, with social contributions flowing to the right authorities and a contract that reflects Taiwan's Labour Standards Act. That three-to-five-day window is genuinely achievable here, and it contrasts sharply with the three-to-six months you'd spend incorporating a local entity before your first hire could legally start work.
Taiwan's minimum wage sits at TWD 29,500 per month, and on top of that base, employers carry a social contribution rate of 14.6 percent. There is no statutory thirteenth-month salary obligation, which simplifies annual cost forecasting compared with many Asian markets. What does complicate the picture is Taiwan's 16 public holidays, more than most countries we track, which affects project scheduling and leave accrual from day one.
The Labour Standards Act governs almost every aspect of the employment relationship, from probation through to termination grounds, and it is not a permissive framework. Foreign employers who arrive expecting broad managerial discretion over dismissal tend to find the reality quite different. Understanding that constraint early shapes how you structure contracts, set probation terms, and plan for workforce changes.
How should you hire in Taiwan?
| Employer of Record (EOR) | Your own legal entity | Independent contractor | |
|---|---|---|---|
| Time to first hire | Days | Months | Immediate |
| Upfront cost | None | Incorporation, registrations, local counsel | None |
| Ongoing cost | From $179–$699/employee/month | Payroll, accounting, filings, benefits administration | Contractor invoices only |
| Best when | You want 1–5 hires fast, without a local entity or in-house payroll expertise. | You are building a long-term team (roughly 10+ employees) and want full control. | Genuinely project-based, independent work. Misclassifying an employee as a contractor carries real penalties. |
- Time to first hire
- Days
- Upfront cost
- None
- Ongoing cost
- From $179–$699/employee/month
- Best when
- You want 1–5 hires fast, without a local entity or in-house payroll expertise.
- Time to first hire
- Months
- Upfront cost
- Incorporation, registrations, local counsel
- Ongoing cost
- Payroll, accounting, filings, benefits administration
- Best when
- You are building a long-term team (roughly 10+ employees) and want full control.
- Time to first hire
- Immediate
- Upfront cost
- None
- Ongoing cost
- Contractor invoices only
- Best when
- Genuinely project-based, independent work. Misclassifying an employee as a contractor carries real penalties.
Rule of thumb: an EOR wins on speed and simplicity for the first handful of hires; once a team in Taiwan passes roughly ten people, running your own entity usually starts to win. Treat that as a risk-adjusted rule of thumb rather than a calculation. Registration and accounting are the cheap part; the costs that decide it are payroll software, local employment-law advice, pension administration and the statutory sick-pay and termination exposure you take on directly once you are the employer.
EOR pricing in Taiwan: providers covering Taiwan publish base fees from $179 to $699 per employee per month, before statutory employer costs. How EOR pricing works.
The break-even question here is straightforward to frame, even if the answer depends on your headcount. An EOR charges a monthly fee per employee and handles payroll, contributions, and compliance from day one. Setting up a Taiwan entity costs several months of management time, legal fees, and registered-capital requirements, before a single payslip goes out. For most foreign employers testing the Taiwan market with one to five people, the entity overhead does not pay off quickly. The comparison table on this page shows current EOR pricing from the providers active here; the market is crowded, so fees are competitive, and it is worth running the numbers against your projected headcount and timeline.
Legal risk is the second consideration, and in Taiwan it carries real weight. The Labour Standards Act does not permit at-will termination. After probation, an employer may only dismiss on specific statutory grounds, must give notice tied to tenure, and must be able to show that no reasonable alternative to dismissal existed. Severance is calculated at half a month's salary per year of service. An EOR absorbs the compliance burden of getting all of this right, including the dual-system complexity where employer-initiated dismissals and employee resignations due to employer fault are treated differently. In my experience, that liability exposure alone justifies the EOR route for employers who are not yet certain about their long-term Taiwan commitment. A wholly owned entity makes more sense once you have enough headcount that the monthly EOR fees clearly exceed entity running costs, and once your HR team has the local knowledge to manage terminations correctly.
Contractor arrangements deserve a mention, though the risk here is less about a single rule and more about the cumulative weight of Taiwan's employment protections. If the working relationship looks like employment, courts and labor inspectors will treat it as employment, and the consequences include back-contributions and potential penalties. For any ongoing, substantive role, a properly structured employment contract through an EOR is the cleaner path.
Taiwan employment facts at a glance
Each row shows the year of the most recent citable source for that figure. Where a year looks old, that is the newest comprehensive source available, and we keep the sourced figure rather than substitute an unsourced newer one. Statutes may have changed since.
Termination and severance in Taiwan
Taiwan operates under a dual severance system with different calculations for employer-initiated dismissals versus employee resignations due to employer fault. Employers must provide statutory notice periods and severance pay based on tenure, with additional protections requiring just cause for dismissal after probation.
Source: Employ Borderless research · 2024. Statutory minimums; collective agreements and contracts can set higher terms. During the probation period (up to 90 days) shorter or no notice may apply.
What catches employers out in Taiwan
Taiwan's employment framework has several features that regularly surprise foreign employers. Each of the following points has caught out multinationals that assumed their standard global policies would transfer without modification.
18% withholding tax on non-resident employees
Foreign employees who spend fewer than 183 days in Taiwan during a tax year are classified as non-residents, and their Taiwan-sourced salary is subject to a flat 18% withholding tax rather than the progressive resident rates. This is an employer-side payroll obligation, not just an employee filing matter, and it affects cash-flow planning for any short-term assignment or delayed-start hire. Employers who budget using standard progressive rates can find themselves significantly under-withholding in the first half of a tax year.
Unusually broad anti-discrimination grounds
Article 5 of Taiwan's Employment Service Act prohibits discrimination on one of the longest lists of protected characteristics in any jurisdiction we cover. Beyond the categories most global policies address, it explicitly includes astrological sign and blood type. Application forms, pre-employment medical checks, or casual screening questions touching on these characteristics can constitute unlawful discrimination. Standard global HR templates almost never mention these grounds, and localising them for Taiwan is not optional.
Strict just-cause termination regime
Taiwan does not recognise employment at will. Dismissal after probation must be grounded in one of the specific statutory reasons set out in Articles 11 and 12 of the Labour Standards Act, and an employer must also demonstrate that no other reasonable means of maintaining employment existed. The notice periods tied to tenure (10, 20, or 30 days depending on length of service) are mandatory, not negotiable. Foreign employers accustomed to severance-only termination regimes find this framework significantly more restrictive than expected.
Non-compete agreements require local adaptation
Taiwanese law caps enforceable non-competition clauses at two years and requires that they be proportionate in scope and accompanied by dedicated compensation paid to the employee. Multinational employers who import standard global templates with three-year or longer restrictions, broad geographic reach, and no separate non-compete payment will find those clauses either unenforceable or legally challenged. This needs to be addressed at the contract-drafting stage, not after a dispute arises.
Work permits and Alien Resident Certificates for foreign nationals
Foreign nationals must hold a Ministry of Labor employment permit before starting work in Taiwan. Each permit for foreign professionals is generally valid for up to three years per application, with renewals available, but the permit must be in place before day one. For stays beyond the short-term visa threshold, an Alien Resident Certificate is also required. Employers who rely on short-term visas or assume the employee can sort out their own status while working risk disrupting the assignment entirely if the paperwork is not sequenced correctly.
Your next step
40 EOR providers can employ for you in Taiwan. Compare them independently, or tell us about your hire and get a shortlist matched to your situation.
Common questions about hiring in Taiwan
Is there a thirteenth-month salary requirement in Taiwan?
What is the minimum wage in Taiwan?
How much do employer social contributions add to payroll costs?
How long is the probation period in Taiwan?
What notice and severance apply when terminating an employee in Taiwan?
How quickly can I hire someone in Taiwan through an EOR?
How many public holidays does Taiwan have?
Can I use a PEO in Taiwan?
Not in the US sense of the word. A PEO (professional employer organization) is a co-employment model under US law and needs your own local entity; Taiwan has no equivalent. When a provider offers a "PEO in Taiwan", it is in practice an employer of record: the provider is the legal employer and you direct the work. That is the route this guide describes. EOR vs PEO explains where the two models differ.