Employment contract in Taiwan: Template, Key Clauses and Local Law (2026)

The short answer An employment contract in Taiwan is governed by the Labor Standards Act (LSA). Indefinite-term employment is the default; fixed-term contracts are only allowed for genuinely temporary, short-term, seasonal or specific project work. The standard working time is 8 hours a day and 40 hours a week. Employer-initiated termination requires statutory grounds, advance notice that scales with length of service, and, in most cases, statutory severance. Enrolment in labour insurance, national health insurance and the labour pension is mandatory. ## Indefinite or fixed-term? Taiwan's default rule Under Article 9 of the Labor Standards Act, an employment contract for continuing work must be an indefinite-term (non-fixed) contract. Fixed-term contracts are permitted only for temporary, short-term, seasonal or specific (project) work. If a fixed-term contract is used for work that is really continuous, or is repeatedly renewed, it can be deemed an indefinite contract. Start from an indefinite-term contract unless the work genuinely fits one of the fixed-term categories. ## The local law that governs employment in Taiwan The Labor Standards Act is the core statute, setting minimum terms on hours, rest, leave, termination and severance. Alongside it sit the Labor Pension Act (the retirement pension system), the Labor Insurance and Employment Insurance schemes, the National Health Insurance system, the Act of Gender Equality in Employment, and the Occupational Safety and Health Act. These minimums cannot be contracted below. ## Key clauses, with local-law notes Parties and job details. Identify the employer and employee, the job title, duties and workplace. Contract type. State whether the contract is indefinite or, if justified, fixed-term, and the category relied on. Wages. State the wage, components and pay date. Wages must meet the statutory basic wage, which is reviewed periodically; confirm the current figure. Working hours and overtime. The standard is 8 hours a day and 40 hours a week. Overtime is subject to statutory limits and premium pay, and the employer must keep accurate attendance records. Rest and leave. Provide regular and mandatory rest days each week, national holidays, and annual paid leave, which increases with length of service. Probation. The LSA does not regulate probation; a probation period, often around three months, can be agreed, but statutory protections still apply during it. Termination and notice. Employer-initiated termination needs statutory grounds under Articles 11 or 12. For no-fault terminations under Article 11, advance notice under Article 16 scales with service: 10 days for 3 months up to 1 year, 20 days for 1 up to 3 years, and 30 days for 3 years or more, or pay in lieu. Severance. Under the current Labor Pension Act system, statutory severance on employer-initiated termination is half a month of average wages for each year of service, capped at 6 months of average wages. Employees who started before the 2005 pension reform may fall under the older LSA formula of one month per year; confirm which system applies. Social insurance and pension. Enrol the employee in labour insurance, employment insurance, national health insurance and make labour pension contributions. Confidentiality, IP and non-compete. Add confidentiality and IP assignment. Post-employment non-compete clauses are enforceable only if they meet the LSA's conditions, including a legitimate interest, reasonable scope and duration (not exceeding two years), and reasonable compensation to the employee. ## A simple template outline 1. Parties and start date

2. Job title, duties and workplace
3. Contract type (indefinite or fixed-term with category)
4. Wages, components and pay date
5. Working hours, rest days and overtime
6. Annual leave and national holidays
7. Probation (if any)
8. Labour and health insurance and pension enrolment
9. Confidentiality, intellectual property and any non-compete
10. Termination grounds, notice and severance
11. Governing law and dispute resolution Provide the contract in Chinese, or bilingually, so the employee understands the terms. ## Common mistakes and red flags - Using a fixed-term contract for continuing work, which can be deemed indefinite.

• Missing or short termination notice under Article 16 for the employee's length of service.
• Miscalculating severance by using the wrong pension system (old LSA versus the current Labor Pension Act).
• Not keeping accurate attendance and overtime records, which the LSA requires.
• A post-employment non-compete with no compensation, no legitimate interest or a term over two years, which will not be enforceable.
• Failing to enrol the employee in the mandatory insurance and pension schemes. ## Insurance, pension and record-keeping Taiwanese employers must enrol employees in labour insurance and employment insurance, in the National Health Insurance system, and must make monthly contributions to the employee's individual labour pension account under the Labor Pension Act. These are mandatory and should be factored into the cost of hiring. The Labor Standards Act also requires employers to keep attendance records showing working hours, which are important evidence if an overtime or working-time dispute arises. Wage statements should itemise base pay, overtime and any allowances. ## Language, execution and dispute resolution Provide the contract in Chinese, or as a bilingual document, so the employee understands the terms. Electronic contracts and signatures are generally recognised. Employment disputes in Taiwan are often handled first through labour mediation at the local labour authority, with the specialised labour courts available for claims that are not resolved. A clear written contract, accurate attendance records and correct insurance enrolment are the employer's strongest position in any of these routes. ## Keeping it all in one workspace Step back and drafting a contract like this is really several jobs at once: getting the local-law clauses right, keeping your own standard positions consistent, tracking versions as the document is negotiated, and remembering the dates and obligations it creates. When those jobs are spread across a template file, an inbox and someone's memory, things slip, not through carelessness but because the work is scattered. That is the single-workspace idea behind Adira: draft, understand, edit, track and govern a contract in one place, with each clause flagged favourable, neutral or unfavourable to your company and a built-in record of versions and key dates. Adira is India-first today. Support for other jurisdictions, including those in Asia, is on its roadmap rather than at Indian depth now, so for a Taiwanese contract you would still rely on local counsel for the governing-law detail. The point is the direction: a contract you can see end to end, in one place, is easier to get right and to keep right. ## A note on legal advice This article is general information, not legal advice, and English translations of Taiwanese statutes are unofficial, with the local-language text controlling. Employment, data and trade-secret rules change, so confirm the current position and have a qualified Taiwanese lawyer review any contract you intend to sign.