Employer contribution of LI, NHI, and LRF in Taiwan

Ivy Chuang 💜
4 min readMay 25, 2022

Aside from monthly salaries, employers in Taiwan need to contribute to LI, NHI, and LRF of their employees according to the regulations.

You may have noticed deductions from your monthly gross salary as stated on your payslip during your time as an employee before starting a company. Now that you are an employer, there are some monthly contributions that you have to make towards Employee Provident Fund and Social Security Contribution for your employees’ benefits as required by the laws in Taiwan, namely LI, NHI, and LRF.

Or if you are hiring a Taiwanese talent from abroad, what kind of social insurance do you need to pay for them? Social insurance in Taiwan is calculated by salary intervals so it does not have a fixed percentage for the numbers. Let’s take a look at what is the cost for hiring a Taiwanese talent from the following highlights.

1. Labour Insurance (LI) contribution

On July 11th of 1958, the Legislative Yuan enacted the Labour Insurance Act as a guarantee for workers’ life and the improvement for social safety. It encompasses five insurances, including injury, disability, conception, death, and old age. The former four items can help release citizens’ burdens; as for the old-age insurance, the elder citizens are allowed to apply for a one-time or monthly premium in regard to insurance coverage as a guarantee at the later stage of their life.

The labour insurance in Taiwan is usually calculated on a daily basis and is not retrospective. The calculation of working days is 30 days with leaves included and 31 days for certain months are also regarded as 30 working days. Both employers and employees have to pay for labour insurance and the premium varies with industries and salary intervals.

The percentage for the premium: 20% by employees, 70% by employers, and 10% by the government. Please refer to BUREAU OF LABOUR INSURANCE for the method of calculation.

2. National Health Insurance (NHI) contribution

National Health Insurance (NHI) was implemented on the 1st of March in 1995 by providing medical care services, the so-called “NHI” or “Health Care”, which is a mandatory welfare policy implemented for Taiwanese citizens.

Both employers and employees have to pay for labour insurance and the premium varies with industries and salary intervals. The percentage for the premium: 30% by employees, 60% by employers, and 10% by the government. Please refer to NATIONAL HEALTH INSURANCE ADMINISTRATION for the method of calculation.

3. Labour Retirement Funds (LRF) contribution

Labour Retirement Funds (LRF) was executed on the 1st of November in 1986 according to the Labour Standards Act issued by the Ministry of the Interior. This insurance is considered as The Old Fund, referring to the amount of pension the employers guarantee the employees in terms of “Labour Standards Act”. On the other hand, Labour Pension Act is the system built for “individual labor pension accounts” which means that employers pay no less than 6% of the monthly salary of each employee as their pension saved to the accounts. Meanwhile, employees themselves are also allowed to pay for another 6% of the salary as the pension at their own will.

The calculation for labour retirement funds is simpler as the 6% deductions from the salary are in accordance with the Monthly Contribution Classification of Labor Pension. This is a mandatory cost for the employers and employees are free to pay for it.


The above three highlights are the main scope of insurance that employers need to take on for hiring a Taiwanese employee. Since Taiwan’s social insurance and labour act are more rigid and complicated than other countries, the cost may vary depending on the salary interval of employees; in addition, the extra bonus will increase the cost of tax for employers as well. So, if you would like to know more about the salary calculation of Taiwanese employees and Taiwan labour act, you are more than welcome to ask me any question on LinkedIn. :)

Author : Ïvy / Translator : Claire

Extends reading:
Expanding Team Overseas? Here’s How EOR Service Providers Can Expedite Your Growth
Hiring Overseas: What Business Owners Should Know Before Setting Up Foreign Entities



Ivy Chuang 💜

Remote BD: Helps you to deal with remote talents payroll, EOR, and PEO in 150+ countries, Chat with me :) https://meetings.hubspot.com/ichuang