Taiwan Labor Insurance Rate to Reach 13% in 2027 as Pension Deficit Grows

January Increase Will Affect More Than 10 Million Workers

Taiwan's combined labor and employment insurance contribution rate is scheduled to rise from 12.5% to 13% on January 1, 2027, bringing the rate to its current statutory ceiling. More than 10 million insured workers and roughly 626,000 businesses face higher contributions as the labor insurance system struggles with growing pension expenses.

The headline rate includes two parts: ordinary labor insurance will rise to 12%, while employment insurance will remain at 1%. For a worker at the maximum monthly insured salary of NT$45,800, the increase is expected to add about NT$46 to monthly deductions, or NT$552 over a year.

Employers will carry the largest share of the increase. Under the contribution arrangement for ordinary employees, businesses pay 70% of premiums, workers pay 20% and the government pays 10%. A small increase in the rate therefore adds substantially more to an employer's bill than to an individual worker's deduction.

The adjustment comes as the labor insurance fund's annual deficit is projected to exceed NT$110 billion in 2027, potentially marking an 11th consecutive year in which expenditure exceeds revenue. An aging population and the continuing cost of monthly old-age pensions are increasing pressure on the fund.

What the 13% Rate Means for a Paycheck

Labor insurance contributions are calculated using an insured salary classification table. This assigns workers to salary brackets, so the amount used for insurance calculations can differ from their actual monthly earnings. The maximum insured monthly salary for labor and employment insurance is NT$45,800.

The change from 12.5% to 13% is an increase of 0.5 percentage points. For ordinary employees, the worker's extra monthly payment is calculated by multiplying the insured salary by 0.005, then by the worker's 20% share.

At an insured salary of NT$36,511, that calculation produces an additional worker contribution of about NT$36.51 a month, or NT$438.14 annually. The employer's corresponding increase is approximately NT$127.79 a month per worker. Actual deductions depend on the applicable salary bracket and the official contribution tables.

A second estimate uses an average insured salary of NT$36,658 and puts the worker's additional payment at roughly NT$36.8 a month, or NT$442 annually, and the employer's increase at NT$128.8 a month. For household budgeting, both estimates point to an average worker contribution increase of about NT$37 each month.

Businesses Face Billions in Added Costs

Nearly 626,000 businesses are expected to face an estimated NT$13.147 billion in additional annual costs. Another calculation, based on 8.627 million employees in industry and services, puts the annual employer increase at about NT$13.33 billion.

The estimates use different workforce totals and average insured salaries. Their shared message is that businesses collectively face more than NT$13 billion in extra annual contributions, with the amount for each company depending on its workforce and insured salary levels.

For a business with 10 employees insured at NT$36,511 each, the estimated employer increase of NT$127.79 per person would add about NT$1,278 a month, or NT$15,335 a year. That calculation covers the rate adjustment alone. Changes in employee numbers or insured salary brackets would also affect the final bill.

Lai Cheng-yi, honorary chairman of the General Chamber of Commerce, said the increase would place greater pressure on businesses. He described average public contribution rates for labor and health insurance as relatively low, while urging the government to consider how much businesses can afford when adjusting them.

Employers are also preparing for a possible minimum wage increase in 2027. Any such adjustment would be another consideration in payroll planning, alongside the scheduled insurance rate change.

Why the Extra Revenue Will Not Close the Gap

The rate increase is expected to generate approximately NT$23.021 billion in additional annual labor insurance revenue. Against a projected annual deficit exceeding NT$110 billion, that amount is equivalent to less than 21% of the projected gap.

The comparison shows why the premium adjustment and government financial support are both central to the fund's finances. The increase brings in more money from contributions, while the cost of benefits, particularly monthly old-age pensions, continues to weigh on spending.

The government has provided NT$517 billion in budget subsidies over the seven years preceding the planned increase and has budgeted another NT$130 billion for 2027. Together, those amounts total NT$647 billion, with the latest allocation representing planned support.

Government budget subsidies are separate from the government's regular 10% contribution share for ordinary employees. The regular share helps pay premiums as they fall due. Budget subsidies transfer additional public money to support the insurance fund.

The projected NT$110 billion deficit describes an annual imbalance between revenue and expenditure. Workers and employers therefore face two connected developments: a higher contribution rate in January and continued reliance on public funding to support benefit payments.

A Scheduled Increase Reaches the Legal Ceiling

The 2027 adjustment follows the rate increase mechanism established when Taiwan introduced its labor insurance pension system in 2009. The combined rate, including employment insurance, began at 7.5%.

From the third year of that system, the schedule called for increases of 0.5 percentage points annually. After the rate reached 10%, the interval changed to once every two years. The combined rate reached 12.5% in 2025 and is scheduled to reach 13% in 2027.

• 2009: The labor insurance pension system began with a combined contribution rate of 7.5%.
• 2025: The combined rate rose to 12.5%.
• September 2026: Rate change notices were printed on the reverse of September premium bills.
• October 25, 2026: Mailing of those notices was completed.
• January 1, 2027: The combined rate is scheduled to rise to 13%, including 1% for employment insurance.

The ordinary labor insurance rate will then stand at 12%, its ceiling under the current Labor Insurance Act. Raising that ceiling would require a legal change. Further increases would therefore involve a legislative decision, alongside debate about pension spending and government support.

How Many Workers and Employers Are Covered?

Figures for the end of August 2026 put the system at approximately 628,000 insured units and 10.4985 million insured people. Premiums assessed for that month exceeded NT$44.5 billion. The broader estimate accompanying the rate increase refers to more than 10.51 million workers and nearly 626,000 businesses.

These counts describe slightly different snapshots and categories of participation. An insured unit is an organization registered to handle insurance contributions, while a business count focuses on employers. For workers, the practical result is a change in payroll deductions across a system covering more than 10 million people.

The 70%, 20% and 10% contribution split applies to ordinary employees under the arrangement described for the increase. Workers insured through other categories should consult the contribution table for their category when checking their payment.

Which Benefits Does Labor Insurance Provide?

Labor insurance covers eligible workers, including eligible foreign and migrant workers. Its benefits include payments for ordinary injury or sickness, disability, old age and death. Pension payments are one part of a wider social insurance system that also supports workers and families when earnings are interrupted.

For qualifying ordinary injury or sickness, benefits can equal 50% of the average monthly insured salary for up to six months. An additional six months may be available when the relevant conditions are met. Eligibility rules determine whether a worker receives payment and for how long.

Old-age benefits can take the form of monthly pensions or lump sums for eligible workers. Disability and survivor benefits also provide support to qualifying insured people and their families.

Occupational injuries and diseases are handled separately under the Labor Occupational Accident Insurance and Protection Act. Qualifying compensation can equal 70% of the average monthly insured salary, subject to statutory limits and conditions. Workers seeking benefits need to distinguish an ordinary illness or injury from one connected to their work because the applicable insurance rules differ.

What Workers and Payroll Teams Should Check

The Bureau of Labor Insurance has notified insured units through premium bills, and organizations using its electronic services can download the relevant circular. Payroll teams need to apply the new rate from January 1, 2027, using each employee's insured salary bracket.

The bureau said it would update contribution tables for different insured categories and its online premium calculator after amendments to the insured salary classification table are announced. No publication date for those updates was specified.

Workers can check the insured salary shown in their insurance records against the relevant contribution table when it becomes available. Employers need to budget for their larger share of the increase and check whether any salary classification changes also affect their payroll calculations.

Key Points

• The combined labor and employment insurance rate is scheduled to rise from 12.5% to 13% on January 1, 2027.
• Ordinary labor insurance will account for 12%; employment insurance will remain at 1%.
• Average workers face roughly NT$37 more in monthly contributions. The increase at the maximum insured salary is about NT$46.
• Employers pay 70% of premiums for ordinary employees and face more than NT$13 billion in estimated additional annual costs.
• The increase is expected to generate NT$23.021 billion annually, while the fund's projected annual deficit exceeds NT$110 billion.
• The government has budgeted NT$130 billion in additional support for 2027.
• The rate reaches the current legal ceiling, making further increases dependent on a change in the law.