Is Your Company Calculating Employee Payroll Correctly?

Employee payroll is a constant challenge for businesses. In this article, we answer some common questions about payroll, covering labor insurance, leave, and salary calculations.

Dispatched Workers and Labor Insurance

First, let's clarify a question about dispatched worker hours and labor insurance:

A dispatched worker in a logistics department works 8 hours a day at an hourly wage of NT$176, working out to a monthly salary of about NT$30,000. But when checking labor insurance records, the minimum insured bracket shows NT$11,000 — is this correct?

The answer: yes, part-time employees' labor insurance brackets are indeed calculated based on their working hours, and NT$11,000 is the minimum insured bracket for part-time employees. If the employee's actual monthly salary is higher than this amount, they should be insured at the actual salary bracket.

Another scenario: if a part-time employee's monthly salary is around NT$30,000, how should the company insure them correctly?

While NT$25,250 is the highest bracket for part-time employees, if a part-time employee's actual monthly salary reaches around NT$30,000, the company should make sure they're insured at the actual salary bracket. When enrolling, the relevant form should clearly note the employee as "part-time," with the actual monthly salary entered in the "Labor Insurance Monthly Insured Salary" field.

(Note: From January 2024, the minimum monthly wage will change from NT$26,400 to NT$27,470; the hourly minimum wage will similarly rise from NT$176 to NT$183. Source: Executive Yuan press release, 2023/9/14)

Part-time vs. Full-time Hours

Before understanding labor insurance enrollment issues, let's clarify the distinction between part-time and full-time employees:

Under the Ministry of Labor's definition, a part-time employee is one whose working hours are shorter than the company's standard full-time hours. In other words, if the company's full-time hours run from 9 a.m. to 4 p.m., but an employee works shorter hours — say, only 6 hours a day — they can be considered part-time.

Salary Calculation Questions

Next, let's address some payroll calculation questions:

Regarding monthly salary calculation: if an employee actually worked 30 days in a given month, how should the monthly salary be calculated? Generally, whether or not the company set up a special salary calculation arrangement with the employee doesn't significantly affect the outcome. Most companies apply Civil Code Article 123, spreading the monthly salary evenly across each month's 30 days regardless of whether it's a "big" or "small" month. So the formula is: total monthly salary ÷ 30 days = daily wage, then multiplied by the number of actual working days to get that month's salary.

Regarding half-pay for sick leave: this is based on the employee's actual salary composition. Companies typically calculate sick leave pay based on the salary the employee would normally receive, including base pay, overtime pay, rest-day overtime pay, and supervisory allowances. Under the Labor Leave Regulations, for ordinary sick leave within 30 days per year, pay is halved. But if the labor insurance ordinary injury/sickness benefit the employee receives is less than half their wage, the company must make up the difference.

Special Leave and Resignation

Finally, let's discuss special (annual) leave and resignation-related questions:

Special leave is governed by Labor Standards Act Article 38, under which employees become entitled to special leave after working for the same employer or business for a certain period. The number of days is generally based on the employee's length of service. Even if an employee resigns during the year, they still retain the right to special leave calculated based on their length of service. Any unused special leave days must be calculated and paid out upon resignation based on the actual circumstances.

Finally, if you have specific questions about payroll or the Labor Standards Act, feel free to contact our firm's dedicated staff — better safe than making a calculation error!