How is Overtime compensation being handled in Taiwan?

INTRODUCTION

According to Article 30 of Taiwan's Labor Base Law, workers' normal working hours shall not exceed 8 hours per day and 40 hours per week. Working hours that exceed "normal working hours" are extended working hours (overtime), and the employer must pay for them by law.

The hourly wage of Taiwanese workers = MONTHLY Basic Pay/240 per hour

What is the definition of overtime and overtime pay in Taiwans

In accordance with Article 30 of its Labor Standards Act:

The normal working hours of labourers shall not exceed 8 hours a day and 40 hours a week.

Overtime on Statuary holiday or rest day shall be forbidden unless there's any urgency

Scenarios	If Worked
Scenarios	1st -2nd Hours	3rd - 8th Hours	9th - 10th Hours	11th -12th Hours
Regular Working Day (Monday to Friday)	100% covered by regular pay =0%		134%	167%
Regular leave (e.g. Saturday)	134%	167%	267%
Statutory Day off (Public Holidays)	100% *8 hours = 1 day rate even worked less than 8 hours		134%	167%
Rest Day (e.g. Sunday)	100% *8 hours = 1 day rate, even worked less than 8 hours + 1 compensated day of leaves		134%	167%

Official OT Simulator 月薪制加班費試算系統 (mol.gov.tw)

Personal income tax burden of Overtime Payment in Taiwan

Employees of public and private enterprises shall be exempt from income tax on overtime paid in accordance with the limits set out in Articles 24 and 32 of the Labor Standards Act. For both male and female workers, the employer shall not extend the working hours of the workers, together with the normal working hours, to more than 12 hours a day. Not more than 46 hours per month (54 hours per month and 138 hours per 3 months for those in accordance with the proviso 2 and 3 of Article 32 of the Labor Standards Act).

For the purpose of the employer, employees of government agencies, organizations, public and private enterprises who perform their duties on national holidays, regular holidays, and special holidays shall be exempt from income tax if the amount of overtime paid is within the range of the aforesaid standards, and the overtime hours may not be included in the calculation of the "total extended working hours per month on weekdays".

For example, if an employee has worked overtime for 49 hours in a normal working day in a month, the part of the 46 hours can be tax-free according to the regulations, and the overtime pay for more than 3 hours will be incorporated into the income tax. If he works overtime for 8 hours on national holidays, as long as the overtime pay meets the standards of the Labor Base Law, the 8 hours of overtime pay will still be tax-free.

Reference → “Ministry of Labor“ in Taiwan

In this article...

Taiwan

How is Overtime compensation being handled in Taiwan?