萬國法律事務所

Labor Insurance premium rates will increase in 2017. According to Labor Insurance Act, from 1 January 2017, the Labor Insurance premium rate will rise from 10% to 10.5% (including 1% Employment Insurance). This change will affect millions of employees and thousands of employers.

Since 1 January 2009, the Labor Insurance Act was modified and implemented to pin the Labor Insurance premium rate at 7.5%. In 2011, it was increased by 0.5%, and has been increased by 0.5% every year until it is currently 10%. According to the Act, when the rate reaches 10%, future rate increases of 0.5% will be made every two years, and the maximum rate will 13%.

In 2015, the Labor Insurance premium rate was increased to 10% (including 1% Employment Insurance). According to the Labor Insurance Act, if the Labor Insurance Fund surplus can pay its own expenses for the next 20 years, the rate will not require any increases. However, in 2016, the fund surplus was not able to meet this criterion. Moreover, the 10% premium rate was the result of an increase in the last year. Following the rule, in 2017, the Labor Insurance premium rate will rise by 0.5%. However, National Pension reform may affect the change of this premium rate. The effect said reform, however, remains to be seen.

Currently, Labor Insurance premiums are paid by employee, the employer, and the Government at contributions of 20%, 70%, and 10%, respectively. In order to reflect the rise of basic wages, the Bureau of Labor Insurance is drafting amendments to the Act regarding the basic insured salary increase from NT$ 20,008 to NT$ 21,009 (the new basic wage in 2017), to change the second level of insured salary to NT$ 21,900, and to leave the level of the insured salary above NT$ 21,009 unchanged (the highest insured salary remains at NT$ 45,800).

In 2017, corresponding to the increase of the basic wage to NT$ 21,009, for the increase of the Labor Insurance premium rate, an employee would contribute to the Labor Insurance premium in an amount up to NT$ 441. For the highest insured salary of NT$ 45,800, an employee would contribute to the premium an amount from NT$ 916 to NT$ 962. The maximum that an employee will contribute to the Labor Insurance premium will be an additional NT$ 46 in 2017.