How Is the Second-Generation NHI Supplementary Premium Calculated?

In Taiwan, beyond income tax to support the national social security system, individuals with certain types of income must also pay a supplementary premium to help fund additional social welfare and healthcare benefits. This article explains how the supplementary premium is calculated, its thresholds and caps, with worked examples.

How the Supplementary Premium Is Calculated

The supplementary premium is calculated differently depending on the income type. Here are the common categories and how each is calculated:

1. Bonuses exceeding 4x the monthly insured salary (cumulative annual amount):

In this case, the portion of the bonus exceeding 4x the monthly insured salary is subject to a 2.11% premium rate. Example:

Suppose someone receives a NT$10,000 bonus in a given month, with a monthly insured salary of NT$2,000. The amount exceeding the 4x threshold is (NT$10,000 − NT$2,000) = NT$8,000, so the supplementary premium is NT$8,000 × 2.11% = NT$168.80.

2. Part-time salary income:

If someone's part-time salary income reaches the minimum wage announced by the central labor authority, a 2.11% premium applies. Assuming the announced minimum wage is NT$30,000 and someone's part-time income is NT$40,000, the supplementary premium is NT$40,000 × 2.11% = NT$844.00.

3. Professional practice income:

Once professional practice income reaches NT$20,000, a 2.11% premium applies. If someone earns NT$25,000 in a single transaction, the supplementary premium is NT$25,000 × 2.11% = NT$527.50.

4. Dividend income:

Dividend income is calculated somewhat differently, depending on the insured party's status and insured amount. Examples:

For those insured as an employer or self-employed business owner, once a single dividend payment exceeds the amount already factored into their insured salary by NT$20,000, a 2.11% premium applies to the excess. For example, if someone insured as an employer receives a NT$25,000 dividend, and NT$10,000 was already factored into their insured amount, the excess is (NT$25,000 − NT$10,000) = NT$15,000, so the supplementary premium is NT$15,000 × 2.11% = NT$316.50.

For those not insured as an employer or self-employed business owner, once a single payment reaches NT$20,000, a 2.11% premium applies.

5. Interest income:

Interest income is also subject to a 2.11% premium, once a single payment reaches NT$20,000 or more. For example, if someone receives NT$25,000 in interest, the supplementary premium is NT$25,000 × 2.11% = NT$527.50.

6. Rental income:

Like interest income, rental income is subject to a 2.11% supplementary premium once a single payment reaches NT$20,000 or more.

Caps and Thresholds on the Supplementary Premium

It's also worth noting that the supplementary premium is subject to certain caps:

• For bonuses exceeding 4x the monthly insured salary (cumulative annual amount), there is no explicit cap.
• For part-time salary income, the cap is a single payment of no more than NT$10 million.
• The cap for professional practice income, dividend income, interest income, and rental income is also a single payment of no more than NT$10 million.

Conclusion

Taiwan's supplementary premium calculation and its caps are a fairly complex topic, and can vary depending on individual circumstances. To ensure your income is calculated correctly, if you need help with calculations or filing, please feel free to contact us — we're happy to help resolve any related questions.