Taiwan is a jurisdiction known for its favorable labor laws. The labor law on minimum working conditions is primarily governed by the Labor Standards Act (first promulgated in 1984 and amended from time to time). In Taiwan, “annual leave” in the private sector typically refers to the statutory annual paid leave under Article 38 of the Labor Standards Act.
This piece will offer all the essential details about annual leave in Taiwan.
What is Annual Leave?
Annual leave is one of the numerous statutory benefits that eligible workers can enjoy when employed by a Taiwanese company. Employers are expected to comply with the Labor Standards Act’s leave rules, or risk sanctions. But what exactly is annual leave?
Annual leave is a type of paid leave that lets employees take time off work while continuing to receive wages. Taiwan sets minimum statutory standards for annual paid leave days and for how unused annual paid leave must be handled.
For employees to qualify for annual leave, they’ll need to meet certain requirements. These requirements will affect:
- Who qualifies for a leave
- How much compensation will employees earn during an annual leave
- The acceptable notice period to take an annual leave
- Other conditions affecting annual leaves
Private employers can take a more generous approach to their annual leave policy. They can use this approach as an incentive to attract the best talents.
How Does an Annual Leave Work?
Under the Labor Standards Act, annual paid leave dates are generally arranged by the worker. In practice, employees usually submit leave requests through the company’s internal process (e.g., HR system / form) so the employer can record attendance and plan staffing. However, employers should not treat annual paid leave as something they can unilaterally deny or restrict to only certain dates.
The employer may consult with the worker to adjust annual leave dates only in limited situations—such as urgent business operational needs, or where the worker’s personal factors require a change—so the arrangement should be handled through consultation rather than unilateral decision-making.
Employers must pay wages during annual paid leave. Employers are also expected to keep proper records of annual paid leave taken, and handle any unused annual paid leave according to the statutory settlement (payment) and/or carry-over rules.
In exceptional situations (e.g., an act of God, accident, or unexpected event requiring continuance of work), the Labor Standards Act allows an employer to require workers to suspend leave (including annual paid leave) subject to strict conditions (including double wages for work during the suspended leave, a make-up leave arrangement afterward, and required reporting to the competent authority).
How Many Days Annual Leave in Taiwan?
To qualify for annual paid leave in Taiwan, the worker must have worked continuously for the same employer or business entity for a required period. The following statutory minimums apply:
| No of Working Days | Duration of Leave |
| Serve 6 months to 1 year | 3 days |
| Serve 1 – 2 years | 7 days |
| Serve 2 – 3 years | 10 days |
| Serve 3 – 5 years | 14 days |
| Between 5 – 10 days | 15 days |
| Serve 10+ years | 16 days in the 10th year, then +1 additional day for each year of service over ten years, capped at 30 days |
Important practical note: employers should not treat the “3 days at 6 months” as something that can be deducted from or replaced by the “7 days after 1 year.” These are separate statutory entitlements triggered at different service milestones.
Key compliance points employers often miss
Annual paid leave compliance in Taiwan is not only about the number of days—it also covers how leave is arranged, recorded, notified, and settled. Below are the practical rules employers should build into their HR/payroll process:
- Who arranges annual paid leave dates
- The statutory principle is that annual paid leave dates are arranged by the worker.
- Employers may consult to adjust dates only where there are urgent business needs or the worker has personal factors requiring a change.
- Employees must still follow reasonable internal procedures (e.g., applying through the company system), but employers should not restrict workers to only pre-set dates for annual paid leave.
- Pick and document your “leave year” (and define “year-end”)
- Taiwan allows employers to manage annual paid leave using different “annual periods,” commonly:
- Anniversary-based (counting from the employee’s start date), or
- Calendar-year (January 1 to December 31), or
- Another agreed period (e.g., academic year / accounting year) agreed by employer and employee.
- Whichever method you use, it affects when “year-end” occurs and therefore when unused leave must be settled/paid out.
- Employer notice obligations
- Employers should inform workers of their annual paid leave rights when the worker becomes eligible (and, under relevant rules, this is generally expected to be done within a defined timeframe after eligibility is met).
- Employers must also provide workers with an annual written notice showing the annual paid leave dates taken and, where applicable, the wage amount paid for unused annual paid leave. Written notice can generally be done by paper or electronic means that the worker can access and print.
- Part-time workers are not excluded
- A common misconception is that part-time workers have no annual paid leave. In fact, part-time workers may be entitled, and annual paid leave may need to be pro-rated by working hours depending on their schedule. Where a part-time worker works the same number of workdays per week as full-time staff but with shorter daily hours, employers should still grant the same number of leave days, with wages handled based on the worker’s normal working hours wage.
- Unused leave settlement, carry-over, and deadlines
- If annual paid leave is unused due to year-end or contract termination, the employer must pay wages for the unused days (unless year-end unused days are carried over to the next year by agreement).
- If carried over to the next year by agreement, any remaining carried-over days that are still unused by the end of that next year (or upon termination) must be settled by wage payment.
- Employers should also be aware that wage paid for unused annual paid leave is treated as part of wages for certain payroll/insurance reporting purposes.
- Enforcement risk
- Violations of working-hours-and-leave provisions (including annual paid leave obligations) can result in administrative penalties. Employers should treat annual paid leave as a compliance item—ensure policies are written, records are complete, notices are issued, and settlements are calculated correctly.
Payment of Annual Leave in Taiwan
Employers are expected to record annual paid leave days offered to staff. In some cases, employees do not take all annual paid leave during the applicable “leave year” (which depends on the employer’s chosen annual period), due to business workload or other reasons. Unless the unused days are carried over to the next year by agreement, unused annual paid leave must be settled by wage payment.
If annual paid leave is not used by the end of the leave year, or in the situation of resignation, termination, or layoff, the employer must pay wages for the unused annual paid leave days, subject to statutory settlement timing rules.
For calculating wages for unused annual paid leave, the governing rules generally follow a “daily wages × unused days” approach based on wages for normal working hours. For wages calculated on a monthly basis, the daily wage is generally derived by taking the worker’s normal working-hours wage for the last month before year-end/contract termination and dividing by 30.
Unused annual paid leave can be carried over to the next year only by agreement between employer and employee. If the carried-over days are still unused by the end of the next year (or upon termination), the employer must pay wages for the remaining days. In practice, carried-over days should be tracked clearly and applied first against leave taken in the following year.
Employers should also note that (i) annual paid leave dates and (ii) the wage amount paid for unused annual paid leave must be recorded in the payroll roster, and workers must be notified in writing on a regular annual basis. If a worker claims rights under annual paid leave rules and the employer argues the worker is not entitled, the employer may bear the burden of proof under the Labor Standards Act framework.
How Can We Help?
Dealing with employees while running your business can be plenty of work, especially concerning annual leaves. You’ll have to keep accurate records of employee attendance, the duration of their employment, etc. Also, you’ll be expected to keep track of the expected leave period of each employee, including information on those that had taken leaves in the past. If you decide to do it yourself, there are too many details to track, and you may get overwhelmed. When this happens, it would lead to a further breakdown in your ability to handle your operations. That’s why you need our help.
At Premia TNC, we are a top-rated business consultancy firm. Due to our line of business, we are familiar with everything it takes to successfully run a business, including handling annual leaves. Our experts are trained in working with different scales of companies.
We understand the importance of offering your employees reasonable incentives. That’s why we have developed a process to help you know who should be on leave, the length of their leave, and how much compensation they’re to be paid for the period. We will effectively serve as an extension of your administrative services and use our expertise to keep you in control.
FAQs About Annual Leave in Taiwan
Q: How many days should the employee apply for approval before taking the annual leave?
The Labor Standards Act principle is that employees may arrange annual paid leave dates without needing to provide reasons, and employers should not maliciously refuse. However, employees are generally expected to follow reasonable internal leave application procedures set out in work rules or employment contracts (e.g., submitting the request through HR systems for recording and staffing coordination). Employers should avoid policies that effectively restrict annual paid leave to only certain dates.
Q: What is the minimum unit of annual leave? Can the employee apply for 0.5 day each time?
The law does not mandate a single “minimum unit” for taking annual paid leave (e.g., half-day vs hourly). In practice, it depends on company policy and employer-employee agreement, as long as the arrangement does not undermine statutory rights and proper records are kept. Some companies allow annual paid leave to be taken in smaller units (e.g., hours), especially where attendance systems support that approach.
