For service years under the new labor pension system (勞退新制), severance pay follows Article 12 of the Labor Pension Act (勞工退休金條例): “0.5 month of average wage for each full year of service, prorated for any period under 1 year, up to a maximum of 6 months.” Service years that are still under the old system receive 1 month of average wage for each full year under Article 17 of the Labor Standards Act. When an employer lays off an employee under Article 11 of the Labor Standards Act (business closure, losses, scaling down of operations, inability to do the job, and so on), it must give 10, 20 or 30 days' notice depending on years of service, and if it gives no notice it must pay wages for the notice period. During the notice period the employee may take up to 2 days of job-search leave per week, with wages paid as usual. Severance pay must be paid within 30 days after the contract is terminated, and the employer must also report the layoff to the local competent authority and the public employment service agency 10 days before the employee leaves.
Note: This article is compiled from the Labor Standards Act (amended July 31, 2024), the Labor Pension Act (amended May 15, 2019), the Employment Service Act (就業服務法; amended January 20, 2025) and the Employment Insurance Act (就業保險法; amended January 12, 2022) as shown in the National Laws and Regulations Database. The database's consolidation cutoff date is October 22, 2026. How “average wage” is actually determined (which payments count as regular wages, how leftover partial days are converted) is often disputed, and the Ministry of Labor's interpretations, labor dispute mediation or court rulings prevail. All amounts in the examples in this article are hypothetical.
Which kinds of separation qualify for severance pay
| Reason for termination | Severance pay? | Provision |
|---|
| Employer terminates with notice: closure or transfer of the business; losses or scaling down of operations; suspension of work for 1 month or more because of force majeure; change in the nature of the business with no suitable job to reassign the worker to; the worker is truly unable to do the job | Yes, and notice is required | Labor Standards Act Articles 11, 16 and 17 |
| During a period when work is suspended for reasons such as an occupational injury or maternity leave, the employer cannot continue the business because of force majeure such as a natural disaster, and the competent authority has approved | Yes, and notice is required | Labor Standards Act Article 13, proviso |
| Worker terminates without notice because the employer broke the law (for example, did not pay wages as agreed, violated labor laws, or used violence) | Yes (Article 14, paragraph 4 applies Article 17 by reference) | Labor Standards Act Article 14 |
| Reorganization or transfer of the business, where the old and new employers have not agreed to retain the worker | Yes | Labor Standards Act Article 20 |
| Worker commits a serious violation and the employer dismisses without notice | No | Labor Standards Act Articles 12 and 18 |
| Worker resigns voluntarily, or leaves when a fixed-term contract expires | No | Labor Standards Act Articles 15 and 18 |
“Involuntary separation” (非自願離職), as defined in Article 11, paragraph 3 of the Employment Insurance Act, covers an insured employer that closes a factory, relocates, suspends business, dissolves or is declared bankrupt, or a worker who leaves under Article 11, the proviso to Article 13, Article 14 or Article 20 of the Labor Standards Act. This corresponds to the “severance pay: yes” situations in the table above. People who also meet other conditions, such as the required years of insurance coverage, can apply for unemployment benefits.
How severance is calculated under the new and old systems
| Item | Service years under the new labor pension system | Service years under the old Labor Standards Act system |
|---|
| Legal basis | Labor Pension Act Article 12 | Labor Standards Act Articles 17 and 84-2 |
| Per full year | 0.5 month of average wage | 1 month of average wage |
| Under 1 year | Paid pro rata | Remaining months paid pro rata; a fraction of less than 1 month counts as 1 month |
| Cap | Up to 6 months of average wage | The provision sets no cap |
| Payment deadline | Within 30 days after the labor contract is terminated | Within 30 days of termination of the labor contract |
For workers who chose the new labor pension system but have earlier old-system service years, Article 11 of the Labor Pension Act provides that the old-system years are retained. When the contract is terminated under Article 11, the proviso to Article 13, Article 14, Article 20 or similar provisions of the Labor Standards Act, the employer must pay severance for the retained years under the old-system standard, using the average wage at the time the contract ends, and also within 30 days. For the differences between the old and new systems of Labor Insurance and the labor pension, see Labor Insurance old-age benefits and the new labor pension system.
This article's calculation example (assuming an average monthly wage of NT$40,000 and all service years under the new system):
| Service years under the new system | Base | Severance pay |
|---|
| 1 year | 0.5 month | NT$20,000 |
| 3 years 4 months | (3 + 4/12) × 0.5 ≈ 1.67 months | About NT$66,667 |
| 5 years | 2.5 months | NT$100,000 |
| 12 years or more | Reaches the cap of 6 months | NT$240,000 |
How average wage is determined
Article 2, item 4 of the Labor Standards Act defines average wage as “the total wages received during the six months before the day on which the event giving rise to the calculation occurred, divided by the total number of days in that period”; for someone who has worked less than 6 months, it is the total wages received during the period worked divided by the total days of that period. “Wages” in item 3 include wages, salary, and bonuses, allowances and any other regular payments under any name, paid by the hour, day, month or piece. Which payments count as regular is often disputed in individual cases, and the Ministry of Labor's interpretations, mediation or court rulings prevail. Article 2 of the Enforcement Rules of the Labor Standards Act (勞動基準法施行細則) further provides that the following days or periods are not counted in the average wage: the day on which the event giving rise to the calculation occurred; periods of medical treatment for an occupational injury; periods in which maternity-leave wages are paid at half; periods in which the employer could not continue the business because of force majeure such as a natural disaster, so that workers could not work; reduced wages from ordinary sick or injury leave taken under the Regulations for Leave-Taking of Workers (勞工請假規則), or from menstrual leave, maternity leave, family care leave or rest to protect a pregnancy taken under the gender equality in employment law (性平法); and periods of unpaid leave (留職停薪).
The following is this article's own suggestion: when you receive a layoff notice, first keep your pay slips and attendance records for the last 6 months and work out your average wage yourself; if your figure differs from the company's, you can apply for labor dispute mediation.
Notice period, pay for the notice period and job-search leave
An employer that terminates the contract under Article 11 or the proviso to Article 13 must give notice under Article 16, paragraph 1 of the Labor Standards Act:
| Period of continuous work | Minimum notice |
|---|
| 3 months or more but less than 1 year | 10 days before |
| 1 year or more but less than 3 years | 20 days before |
| 3 years or more | 30 days before |
- Job-search leave (謀職假): Article 16, paragraph 2: after receiving notice, a worker may take leave during working hours to go out and look for other work, not exceeding 2 days' worth of working hours per week, and wages are paid as usual during the leave.
- Pay for the notice period: Article 16, paragraph 3: if the employer terminates the contract without giving notice within the required period, it must pay wages for the notice period.
- Certificate of service: Article 19: when the contract is terminated and the worker asks for a certificate of service, the employer or its agent may not refuse.
- Wages and annual leave: Article 9 of the Enforcement Rules: the employer must settle wages immediately when the contract is terminated; unused annual leave must be paid out as wages, and for how it is calculated see how unused annual leave is converted to pay.
Employer deadlines and penalties
| Obligation | Deadline or content | Penalty for violation |
|---|
| Paying severance (old system) | Within 30 days of termination of the contract | Labor Standards Act Article 78, paragraph 1: NT$300,000 to NT$1,500,000, with a time limit set for payment; if it is still unpaid when the time limit expires, a penalty is imposed again for each occurrence |
| Paying severance (new system) | Within 30 days after termination of the contract | Labor Pension Act Article 45-1: NT$300,000 to NT$1,500,000, with a time limit set for payment; if it is still unpaid when the time limit expires, a penalty is imposed again for each occurrence |
| Notice, job-search leave and certificate of service | Under Article 16 and Article 19 | Labor Standards Act Article 79, paragraph 3: NT$20,000 to NT$300,000 |
| Layoff report | List the employees and report to the local competent authority and the public employment service agency 10 days before they leave; for force majeure such as a natural disaster, within 3 days from the date they leave | Employment Service Act Article 68, paragraph 1: NT$30,000 to NT$150,000 |
How to get an involuntary separation certificate
Applying for unemployment benefits requires a separation certificate. Article 25, paragraphs 3 and 4 of the Employment Insurance Act provide that the separation certificate is issued by the insured employer or by the municipal or county (city) competent authority, and must state the applicant's name, the insured employer's name and the reason for separation; when obtaining it is difficult, with the consent of a public employment service agency, a written statement of the reasons may be submitted instead.
The Taipei Employment Service Office (臺北市就業服務處) lists the situations in which a certificate can be applied for from the local competent authority: the employer reported the layoff under Article 33 of the Employment Service Act when laying off; a factory closure or business shutdown, or an employer who cannot be located, verified as true; a labor dispute with the former employer over the reason for separation that was mediated and is on record; and other situations the local competent authority has verified. Article 23 of the Employment Insurance Act also provides that people who have a labor dispute with the former employer over the reason for separation can still claim unemployment benefits, but if the outcome of the dispute is finally found not to meet the requirements, they must return the benefits within 15 days.
For connecting Labor Insurance and National Health Insurance (NHI) coverage after leaving a job (transferring out, transferring in at the district office (區公所), or joining as a dependent), see what to do about NHI after you resign.
Taipei and New Taipei complaint and mediation contacts
| Area | Agency | Phone |
|---|
| Taipei City | Taipei City Government Department of Labor (臺北市政府勞動局; 5th floor, No. 1, Shifu Road (市府路), Xinyi District (信義區)) | 02-2720-8889; 1999 (dial directly only from within Taipei City) |
| New Taipei City | New Taipei City Government Labor Affairs Bureau (新北市政府勞工局), Labor Relations Division (勞資關係科) | Main line (02)2960-3456; service desk consultation line 02-2965-3900; lawyer consultation lines 02-2964-6476, 02-2964-6357 |
| Nationwide | Ministry of Labor | Toll-free consultation line 1955 |
FAQ
Can I get severance pay if I resign myself?
Generally no. Article 18 of the Labor Standards Act provides that a worker who resigns under Article 15, or leaves when a fixed-term contract expires, may not claim pay for the notice period or severance pay. But if the employer is in one of the situations in Article 14, such as not paying wages as agreed or violating labor laws, and the worker terminates the contract without notice, the worker can claim severance pay under Article 14, paragraph 4, which applies Article 17 by reference.
What is the maximum severance pay under the new system?
Article 12 of the Labor Pension Act sets a maximum of 6 months of average wage, which means the cap is reached at 12 years of new-system service. Old-system service years are calculated at 1 month for each full year under Article 17 of the Labor Standards Act and are paid separately.
What if the company tells me on the same day that I am laid off, with no notice?
Under Article 16, paragraph 3 of the Labor Standards Act, an employer that does not give notice within the required period must pay wages for the notice period: 10 days for 3 months or more but less than 1 year of service, 20 days for 1 year or more but less than 3 years, and 30 days for 3 years or more. Violating Article 16 can be fined NT$20,000 to NT$300,000.
What is the latest that severance pay must be paid?
Article 17, paragraph 2 of the Labor Standards Act and Article 12, paragraph 2 of the Labor Pension Act both provide that it must be paid within 30 days after the contract is terminated. If it is late, you can file a complaint with the Taipei City Government Department of Labor or the New Taipei City Government Labor Affairs Bureau; the employer can be fined NT$300,000 to NT$1,500,000 and ordered to pay within a time limit.
Must job-search leave be paid?
Yes. Article 16, paragraph 2 of the Labor Standards Act provides that after receiving layoff notice, a worker may take leave to go out and look for other work, not exceeding 2 days' worth of working hours per week, and wages are paid as usual during the leave.
Last updated: 2026-11-03
Compiled by the SOSfix editors from public information, for general reference only; for your specific case, contact the Taipei City Government Department of Labor, the New Taipei City Government Labor Affairs Bureau or the Ministry of Labor 1955 line.
Sources
- National Laws and Regulations Database (全國法規資料庫): Labor Standards Act (amended July 31, 2024; consolidated through October 22, 2026; verified 2026-11-02) (in Chinese): Article 2 definitions of wages and average wage; Articles 11 to 20 grounds for termination, notice periods, job-search leave, pay for the notice period, severance calculation and the 30-day deadline, situations in which severance cannot be claimed, and the certificate of service; Articles 78 and 79 penalties; Article 84-2 old-system service years.
- National Laws and Regulations Database: Labor Pension Act (amended May 15, 2019; verified 2026-11-02) (in Chinese): Article 11 retention of old-system service years; Article 12 new-system severance of 0.5 month, pro rata, capped at 6 months, paid within 30 days; Article 45-1 fines.
- National Laws and Regulations Database: Enforcement Rules of the Labor Standards Act (amended March 27, 2024; verified 2026-11-02) (in Chinese): Article 2 days and periods not counted when calculating average wage; Article 9 wages must be settled immediately when the contract is terminated.
- National Laws and Regulations Database: Employment Service Act (amended January 20, 2025; verified 2026-11-02) (in Chinese): Article 33 layoff report 10 days before and within 3 days; Article 68, paragraph 1 fines of NT$30,000 to NT$150,000.
- National Laws and Regulations Database: Employment Insurance Act (amended January 12, 2022; verified 2026-11-02) (in Chinese): Article 11, paragraph 3 definition of involuntary separation; Article 23 people with a labor dispute can still claim benefits; Article 25 separation certificate documents.
- Taipei Employment Service Office (臺北市就業服務處): unemployment benefits (data updated September 16, 2022; verified 2026-11-02) (in Chinese): the four situations in which a separation certificate can be applied for from the local competent authority.
- Taipei City Government Department of Labor (臺北市政府勞動局): contact information in the footer of the official website (verified 2026-11-02) (in Chinese): address, main number 02-2720-8889 and 1999.
- New Taipei City Government (新北市政府): Labor Affairs Bureau contact information (verified 2026-11-02) (in Chinese): main line, the Labor Relations Division service desk consultation line, and the lawyer consultation lines.
- Ministry of Labor press release: new flexible parental-leave care rules take effect January 1, 2026 (published 2025-09-04; verified 2026-11-02) (in Chinese): the Ministry of Labor toll-free consultation line 1955.
