Taiwan’s Ministry of Labor (MOL) has confirmed an increase in the labor insurance premium rate to 12.5% beginning January 2025.
This adjustment, which impacts an estimated 10.51 million workers, raises the current rate from 12% of an insured worker’s monthly salary.
According to Focus Taiwan’s report, the planned rate hike is part of a structured progression introduced alongside the labor pension program in 2009.
As outlined in Article 13 of the Labor Insurance Act, premium rates were initially scheduled to increase from 7.5% to 8% within the program’s first three years. Rates were then to rise by 0.5 percentage points annually before reaching 10%. Following this milestone, biennial increases were mandated to a maximum cap of 13%. The most recent adjustment occurred in 2023, when the rate increased from 11.5% to 12%.
Taiwan’s labor insurance premiums are funded through contributions split between employers, employees, and the government in a 7:2:1 ratio. For instance, for a worker earning NT$28,590 monthly, the 2025 rate means an employer would contribute NT$2,502, while the employee and government would pay NT$715 and NT$358, respectively.
The MOL projects that the higher premium will generate an additional NT$20 billion (US$609.28 million) annually, bolstering the labor insurance fund’s reserves.
The Bureau of Labor Insurance (BLI) has also outlined provisions for workers who leave employment due to occupational injuries or illnesses.
Such workers may apply to continue their labor insurance coverage during treatment, provided they submit applications within five years of leaving their jobs. Coverage can remain active until they qualify for old-age benefits.
To mitigate financial burdens for injured workers, the BLI subsidises 80% of premiums for the first two years of extended participation, with workers covering the remaining 20%. Beyond this period, premiums are evenly split between workers and the Labor Occupational Accident Insurance Fund.
During extended coverage, workers retain eligibility for occupational accident benefits and maintain labor insurance contributions toward future retirement benefits.
The BLI encourages affected workers to seek assistance from its offices or labor organisations to ensure uninterrupted coverage.
The announcements come as Taiwan’s general insurance industry is forecast to grow at a compound annual growth rate (CAGR) of 6.8%, reaching gross written premiums (GWP) of TW$364.2 billion (US$12.2 billion) by 2028, according to data analytics firm GlobalData.
