How income tax works in Taiwan
Taiwan taxes residents staying 183 days or more on worldwide income. Shorter stayers pay only on Taiwan-source income at flat withholding rates with no deductions.
Net income runs five brackets in 2026: 5% to TWD 610,000, 12% to TWD 1.38 million, 20% to TWD 2.77 million, 30% to TWD 5.19 million and 40% above. Exemptions, standard or itemized deductions, and special salary, rent, disability and care deductions come off first.
A 20% alternative minimum applies to broad income above TWD 7.5 million including overseas earnings over TWD 1 million. Taxpayers pay whichever of regular tax and minimum tax is higher.
Income tax brackets in Taiwan
| Bracket | Rate | Notes |
|---|---|---|
| Up to TWD 610,000 | 5% | After exemptions and deductions |
| TWD 610,001 to TWD 1,380,000 | 12% | Net taxable income |
| TWD 1,380,001 to TWD 2,770,000 | 20% | Net taxable income |
| TWD 2,770,001 to TWD 5,190,000 | 30% | Net taxable income |
| TWD 5,190,001 and above | 40% | Top marginal rate |
Tax rates at a glance
- Entry rate
- 5%To TWD 610,000
- Second rate
- 12%
- Middle rate
- 20%
- Upper rate
- 30%
- Top rate
- 40%
- Standard deduction
- TWD 136,000
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
EmployeesExpatsContractorsHigh earnersCross-border workers
Watch out for
- Bracket thresholds apply to net income after all deductions. Comparing gross salary with the bands overstates the real bracket by hundreds of thousands.
- The 183-day line is all-or-nothing for deductions. A 182-day assignee pays flat rates on gross pay with zero relief.
- Overseas income enters through the minimum tax, not the regular return. Residents with foreign earnings above TWD 1 million must compute both taxes.
- Rent relief excludes high earners and dividend-rate electors. The TWD 180,000 special deduction vanishes at 20% marginal and above.
Frequently asked questions
Do expats pay income tax in Taiwan?
Yes, on Taiwan income from day one, and on worldwide income after 183 days of presence. Short stayers face flat withholding with no deductions.
What is the top income tax rate in Taiwan?
The top bracket is 40% above TWD 5.19 million of net income, with a 20% alternative minimum on broad income above TWD 7.5 million.
How much is tax-free in Taiwan?
A single earner shields TWD 101,000 of exemption plus TWD 136,000 standard deduction plus TWD 227,000 salary deduction before any 5% applies.
Are bonuses taxed differently from salary?
No. Salary, bonuses and most labour income pool into consolidated net income at the same five brackets.