How does employee profit sharing work in Taiwan ?
Before 2008, Taiwan Corporate Law states that the allocation of bonuses to employees is considered a part of the corporate earnings distribution. Hence, it is an item to be deducted from retained earnings and not an expense item. From January 1, 2008, employee bonuses were estimated based on 25% of net income (excluding the impact of expensing employees’ bonuses and the related income tax effect). Estimated amount of employee bonuses were charged to current income as operating expenses. The Company’s employee profit sharing expense ratio has been adjusted to 20% of pro forma net income, effective in 2010 (down from 25% in 2008-2009), to strike a balance of shareholders’ interest and overall compensation competitiveness for talents. Based on the outcome, the Board determines how the year’s shareholder dividend and employee profit sharing will be appropriated either in form of stocks or cash. If stock bonuses are resolved for distribution to employees, the number of shares distributed is
Related Questions
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