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Ensuring Payroll Compliance in Taiwan: Essential Information for Employers



In Taiwan, employers have the responsibility to adhere to the laws and regulations concerning salaries, ensuring fair, legal, and orderly payment of wages. This contributes to building a positive employer-employee relationship and upholds the reputation and development of businesses.


Here are some key pieces of information regarding ensuring salary compliance:


Compliance with the Labor Standards Act (LSA): The Labor Standards Act is a fundamental labor regulation in Taiwan, encompassing important requirements such as working hours, overtime wages, leave, and benefits. Employers are obligated to understand and comply with these laws and regulations to ensure the legality of wage payments.


Minimum Wage Standards: Taiwan sets minimum wage standards to safeguard the basic livelihood of workers and maintain their purchasing power. For vulnerable workers whose wages are close to the minimum wage threshold, employers must ensure that wages are not below the minimum wage standard, guaranteeing reasonable compensation for employees. In 2023, the monthly minimum wage has been increased to 26,400 NTD, and the hourly wage has been raised to 176 NTD.


Social Insurance Contributions: Taiwan's social insurance system includes labor insurance, health insurance, and labor retirement pensions. Employers are obligated to deduct and timely pay employees' social insurance contributions as required by law, ensuring employees' social security rights.


Income Tax Withholding and Reporting: Employers have the duty to withhold and report employees' income taxes. According to Taiwan's income tax regulations, employers need to deduct employees' income taxes based on applicable tax rates and fulfill reporting obligations in a timely manner, ensuring compliance with tax requirements.


Holiday and Leave Entitlements: According to the Labor Standards Act, employees have specific entitlements to annual leave, sick leave, and other types of leave. Employers are responsible for granting employees the appropriate leave and rest periods as required by law and must not abuse or restrict employees' leave entitlements.


Retention and Reporting of Salary Records: Employers need to properly retain employees' salary records, including wage payment records, tax documents, and relevant reports. These records should be kept for a certain period as required by law and provided to relevant regulatory authorities when necessary.


Maintaining Employer-Employee Relations: Establishing good employer-employee relations is crucial for ensuring salary compliance. Employers have the responsibility to adhere to labor regulations, ensuring fair wage payments, reasonable working hours, and protecting employees' labor rights.


Resources and Professional Consultation: Maintaining salary compliance requires professional knowledge and adequate resources. Employers can seek assistance from external professional organizations or consulting services, such as human resources companies or legal advisors, to receive the necessary support and expert advice.


In summary, ensuring salary compliance is a legal obligation for employers and a key factor in maintaining a positive company image and enhancing employee satisfaction. Employers need to thoroughly understand Taiwan's labor regulatory requirements and collaborate with professionals to ensure legal, fair, and orderly wage payments. This not only contributes to building good employer-employee relationships but also plays a crucial role in the long-term development and success of businesses.


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