The 25-year-old suffered the injury in only his third match for Town after signing from Peterborough in a £1.5m deal.
New manager Mick McCarthy said on Monday: "Paul Taylor's going to need surgery. He's not going to be available to me for a while. He's going to have surgery on his foot.
"It's a massive blow for him, that's the main thing. He's a lad who is progressing in his career, everybody likes him and he's a good little player and now he can't play.
"My thoughts are for him. Maybe we can do something else. He can't, he's just got to have it operated on and get rehabbed. We'll be fortunate to have him available this season."