Taiwan Pension Guide

Labor Pension — 勞工退休金

• Employer contribution — 6% (mandatory): The employer must contribute at least 6% of the employee's monthly salary to the employee's individual account at the "Bureau of Labor Funds" (the "勞動基金運用局"). The contribution ceiling is TWD 150,000 per month. The employer may contribute more under the collective bargaining agreement (the "團體協約").
• Employee contribution — up to 6% (voluntary): The employee may voluntarily contribute up to 6% of the monthly salary. The voluntary contribution is tax-deductible up to TWD 108,000 per year. The employee may change the contribution rate twice per year.
• Pension payout — lump sum or annuity: The employee receives the entire account balance (the "退休金") at the retirement age of 60. The payout options include: (a) the lump-sum withdrawal of the full account balance, (b) the monthly annuity purchased from the insurance company, (c) the combination of the lump-sum and the annuity.
• Portability: The Labor Pension account is portable — it continues regardless of the job changes. The account follows the employee from employer to employer without the need for the transfer or the consolidation.

For example: an employee earning TWD 100,000/month for 30 years with the employer contributing 6% (TWD 6,000/month) at the 3% annual return accumulates approximately TWD 3.4 million in the account balance.

National Pension — 國民年金

• Coverage: The National Pension (the "國民年金保險" — the "National Pension Insurance") covers the individuals aged 25 to 65 who are NOT covered by the Labor Insurance, the Employment Insurance, or the other social insurance programs. The coverage includes: the students, the homemakers, the unemployed, and the self-employed professionals not enrolled in the Labor Insurance.
• Monthly premium — TWD 1,306 (2026): The National Pension premium for 2026 is TWD 1,306 per month (the "投保金額" × the "保險費率" — TWD 19,761 × 10.5% = TWD 2,075, with the government subsidy of 60% for the standard premium, reducing the individual share to TWD 1,306). The government subsidises 40% to 100% for the low-income households.
• Pension benefits: The National Pension provides: (a) the "old-age pension" (the "老年年金") — the monthly payment from the age of 65, calculated as (the "total insured years" × the "monthly premium amount" × 0.65%) + the "guaranteed minimum" of TWD 4,136 per month (for 2026), (b) the "disability pension", (c) the "survivor pension".
• Penalty for non-payment: The non-payment of the National Pension premium results in the late payment penalty of 0.1% per day (up to the maximum of 10%). The unpaid premiums may be deducted from the future pension payments.

Private Retirement Options

• Individual annuities — 個人年金保險: The Taiwanese insurance companies offer the "individual annuity" products (the "即期年金" — the "immediate annuity" and the "遞延年金" — the "deferred annuity"). The premiums are invested in the insurance company's general account or the separate account. The annuity payments may be fixed or variable.
• Investment-linked insurance — 投資型保險: The "investment-linked insurance" (the "變額保險" — the "variable insurance") combines the life insurance protection with the investment in the underlying funds (the "bonds, the stocks, the ETFs"). The policyholder bears the investment risk. The tax treatment: the investment gains within the policy are tax-deferred.
• Tax-advantaged limits: The tax deduction for the private pension contributions is limited to TWD 24,000 per year under the "deduction for the insurance premiums" (the "保險費扣除額"). The additional contributions to the "Labor Pension voluntary account" have the separate limit of TWD 108,000 per year.