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Taiwan Payroll for US Assignees and Foreign Hires: Withholding and Social Insurance
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Taiwan Payroll for US Assignees and Foreign Hires: Withholding and Social Insurance

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A process engineer from the US parent lands in Taoyuan in early February for a two-year assignment, still paid in dollars from Phoenix. In May a Vietnamese engineer arrives from the group's plant in Bac Ninh for a 120-day line transfer, also on his home company's payroll. The subsidiary hires a Malaysian quality manager locally, paid in New Taiwan dollars (an invented example).

Three people, three tax positions. Two facts sort them: days spent in Taiwan in the calendar year, and who pays.

183 days, 90 days and the payer

A person with no domicile in Taiwan is a resident for any tax year, which is the calendar year, in which he or she stays 183 days or more in total (Income Tax Act Article 7). Days come from passport stamps or the immigration agency's entry and exit certificate; the arrival day is left out, the departure day counts, and all trips in the year are added up (Ministry of Finance eTax Portal, counting days of stay).

Source comes next. Article 8, item 3, treats remuneration for services performed in Taiwan as Taiwan-source income. A salary wired from Phoenix is Taiwan income to the extent it pays for work here. The one domestic exception covers a non-resident who stays no more than 90 days in the tax year and is paid by an employer outside Taiwan. Allowances, bonuses and subsidies count as salary too (Article 14).

The Ministry of Finance's guide for foreign individuals sets out three bands:

Days in Taiwan in the yearSalary paid by a Taiwan companyPay from a foreign employer for work in Taiwan
90 or fewerWithheld at non-resident ratesNot taxed
More than 90, fewer than 183Withheld at non-resident ratesEmployee files and pays before leaving
183 or more (resident)Withheld at resident ratesAdded to the May return for the year

Midyear arrivals and departures are covered in Taiwan Income Tax Residence When You Arrive or Leave Midyear.

When the subsidiary runs the payroll

For the Malaysian manager, the subsidiary is the withholding agent. A resident employee chooses between the official withholding table and a flat 5% of the monthly total (Standards of Withholding Rates for Various Incomes, Article 2). Bonuses and other non-monthly pay are withheld at 5% once a single payment reaches the table's threshold, NT$90,501 for 2026, according to the Kaohsiung National Taxation Bureau (January 28, 2026).

Non-residents pay more. Article 3 of the same Standards sets 18% on salary, falling to 6% when the monthly total is no more than 1.5 times the basic wage approved by the Executive Yuan. From January 1, 2026 the basic wage is NT$29,500 a month. The 6% ceiling is therefore NT$44,250 (Kaohsiung National Taxation Bureau, March 26, 2026). The Ministry of Labor calls the same amount the minimum wage, and the Minimum Wage Act applies that term to other laws' basic wage (Minimum Wage Act Article 18).

How can payroll know in February whether someone will reach 183 days? Under the Ministry's tax Q&A 1514, if the employment contract, visa or resident certificate shows an expected stay of 183 days or more in the same tax year, withholding may start at resident rates. If the employee then leaves for good short of 183 days, the tax is recomputed at non-resident rates and the difference collected. If the documents show a shorter stay, or none are provided, non-resident rates apply from the start.

Deadlines come from Income Tax Act Article 92. Tax withheld from residents is paid by the 10th of the following month. Annual withholding statements go to the tax office by the end of January and to employees by February 10. For 2025 income the filing deadline was February 2, 2026, because January 31 fell on a Saturday (Taxation Administration, January 15, 2026). Tax withheld from a non-resident must be paid, and the statement filed, within 10 days of withholding. Work permits are a separate requirement (Employment Service Act Article 43).

When the parent pays from abroad

Pay from a foreign employer for work in Taiwan sits outside the withholding system, so the employee reports it; a resident adds it to the annual return. The Phoenix engineer passes 183 days in 2026 and will file between May 1 and May 31, 2027 (Article 71). A non-resident in the 90-to-183-day band files and pays before departure, or within the filing period if still in Taiwan then, at the withholding rate for the same type of income (Enforcement Rules of the Income Tax Act, Article 60).

Skipping the return is costly. The Central Area National Taxation Bureau warned on May 8, 2026 that unreported taxable income leads to the tax plus a fine of up to three times the tax evaded. A resident who gives up a Taiwan domicile or residence and leaves mid-year must file and pay for that year before departure, unless a resident spouse stays on and files a joint return (Article 71-1, paragraph 2).

Amounts for the 2026 tax year were announced on November 27, 2025. The personal exemption is NT$101,000 and the salary deduction NT$227,000. The standard deduction is NT$136,000, doubled for a married couple. Five brackets run from 5% to 40%, the top rate applying above NT$5,190,000 of net taxable income.

As of October 2026 there is no comprehensive US–Taiwan income tax agreement; the only US entry on the Ministry's list of tax agreements is a 1988 shipping and air transport arrangement. A US tax adviser can confirm the US treatment of the Taiwan tax paid.

The Vietnamese engineer and the tax agreement

Vietnam is different. Article 15(2) of the 1998 Taiwan–Vietnam tax agreement leaves employment income taxable only in Vietnam if three conditions all hold (agreement text, Chinese; English). He must stay in Taiwan no more than 183 days in total in the calendar year concerned. His pay must come from, or on behalf of, an employer that is not a Taiwan resident. And it must not be borne by a permanent establishment or fixed base the employer has in Taiwan.

Relief needs paperwork. Under Article 26 of the treaty-application regulations, the claim is made when filing, with a residence certificate from the Vietnamese tax authority, passport, employment contract or similar documents, plus details of the payer, the amount and that no Taiwan establishment bore the cost. The rest of that agreement is covered in Vietnamese Companies with Taiwan Income.

Labor insurance, labor pension and health insurance

Foreign employees are in labor insurance. Article 6 of the Labor Insurance Act requires coverage for employees aged 15 to 65 of companies with five or more staff, expressly including foreign employees in service. The Ministry of Labor gives the 2026 rate as 12.5%, of which 1% is employment insurance (Ministry of Labor FAQ). The ordinary-accident premium is split 70% employer, 20% employee and 10% government (Article 15).

Employment insurance reaches fewer foreigners. Article 5 of the Employment Insurance Act admits foreigners married to a Taiwan national with household registration who are permitted to reside and work. Since January 1, 2026, foreign professionals with permanent residence are also covered (Act for the Recruitment and Employment of Foreign Professionals, Article 25).

The labor pension changed most this year. Article 7 of the Labor Pension Act covers foreigners married to nationals, permanent residents and a few related cases. From January 1, 2026, Article 24 of the Foreign Professionals Act brings foreign professionals and foreign special professionals doing professional work into the new pension system with or without permanent residence. The employer contributes at least 6% of monthly wages to an individual account at the Bureau of Labor Insurance (Labor Pension Act Article 14). People already employed before the change could keep the old scheme by written notice by June 30, 2026 (Bureau of Labor Insurance, December 29, 2025).

National Health Insurance turns on the resident certificate. Article 9 of the National Health Insurance Act requires a holder of residence documents to enroll if he or she has lived in Taiwan for six months or is employed by a regular employer, so an employee with a resident certificate does not wait six months. Since January 1, 2026, the spouse and minor children of a foreign professional doing professional work also skip the six-month wait (Foreign Professionals Act Article 23). For 2026 the general premium rate is 5.17% and the supplementary rate 2.11% (National Health Insurance Administration, 2026 sheet). Employees bear 30% of the general premium, employers 60% and the government 10% (Article 27). Bonuses above four times the monthly insured amount, counted over the year, carry a 2.11% supplementary premium, deducted on payment (Article 31). Each month the employer also pays 2.11% on the amount by which total salaries exceed employees' total insured amounts (Article 34).

What about assignees who keep their home-country contract and never join the Taiwan payroll? Whether the subsidiary must enroll them depends on who employs them in Taiwan: the secondment contract, who directs the work and who bears the salary. That needs its own review.

If you are deciding which entity should pay an assignee, Hovering International Law Firm can be reached at wei@hoveringlaw.com.tw with the assignment letter and travel plan.

For the Phoenix engineer, the next date is May 2027, when her 2026 return is due with her US-paid salary in it. The Vietnamese engineer's date comes sooner. He files before he flies home, and that filing is where he can claim the agreement if all three conditions hold.

Official sources

Checked: October 6, 2026

Frequently Asked Questions

Our US parent pays an assignee's salary in the United States. Does Taiwan tax it?
Yes, to the extent it pays for work done in Taiwan (Income Tax Act Article 8, item 3). The only domestic exception is pay from a foreign employer to a non-resident who spends no more than 90 days in Taiwan in the tax year. Taiwan withholding does not reach that pay, so the employee reports it: a resident in the May return for the year, and someone staying more than 90 but fewer than 183 days before leaving. As of October 2026 no comprehensive US-Taiwan income tax agreement is in force to reduce this.
What is the 6% withholding band for non-resident employees in 2026?
Salary paid to a non-resident is withheld at 18%. If the monthly total is no more than 1.5 times the basic wage, the rate is 6%. The basic wage is NT$29,500 a month from January 1, 2026, so the 6% band covers monthly pay up to NT$44,250, according to the Kaohsiung National Taxation Bureau.
Do we have to contribute 6% to the labor pension for foreign professionals?
From January 1, 2026, foreign professionals and foreign special professionals doing professional work are covered by the Labor Pension Act's new system whether or not they hold permanent residence, and the employer must contribute at least 6% of monthly wages. Staff employed before the change could keep the old Labor Standards Act pension by telling the employer in writing by June 30, 2026.

This article provides general information and is not legal advice on any individual matter.

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