Income Tax
The employer is required to deduct withholding tax when salary-related payments are made to the employee.
A resident’s net taxable income is taxed at graduated rates ranging from 5% to 40%. The maximum tax rate is currently 40% on net taxable income earned over TWD 4,980,001. For non-residents subject to tax in Taiwan, the applicable tax rate for salary income is 18% of gross salary income.
Resident withholding tax contributions are to be paid by the 10th of the month following the month salary is paid. The withholding tax statement is to be filed by January 31st of the following year. Non-resident contributions must be paid and filed within 10 days following the salary month. Late filings incur interest surcharges and penalties.
For regular monthly taxable income, withholding tax is deducted based on the statutory withholding tax table. Main factors include monthly income and number of dependents.
- Residents: Graduated rates (5% to 40%)
- Non-residents: Flat 18%
- Monthly withholding tax payments due by the 10th of the following month
- Annual statements due January 31
Supplementary NHI
- Employers pay an additional 2.11% if bonuses exceed 4x monthly insured salary.
Social Security and Insurance
If an entity is newly established, an initial registration for both employer and employee to participate in Social Security Schemes will be required. Subsequent to the initial registration, enrolment or termination of Social Security will be required whenever an employee is newly hired or terminated.
Labour Insurance Benefits:
- Ordinary Insurance: maternity, injury/sickness, disability, old-age, survivor
- Occupational Accident Insurance: injury/sickness, medical care, disability, survivor
Current Premium Rates:
- Labour Insurance (LI): 11%
- Employment Insurance: 1%
- OI rate will increase to 11.5% in 2025
Health Insurance:
- Premium rate: 5.17%
- Supplementary NHI:
- 2.11% applies to bonus income exceeding 4× insured monthly cap
Pension Contributions:
- Old System (before July 1, 2005): employer contributes 2%–15%
New System (after July 1, 2005): 6%+ under Labour Pension Act
