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How Should Company Founders/Directors Enroll in Labor Insurance, National Health Insurance (NHI), and Labor Pension?
A comprehensive guide to insurance regulations for company directors based on headcount and entity structure.
🏥 1. National Health Insurance (NHI) Regulations (NHI Insuring Entity)
Mandatory CoverageOnce a company is established and registered, the company itself becomes a statutory Insuring Entity:
- Insurance Status: The company founder/director cannot enroll as an “employed staff member” and must enroll under the status of “Boss/Director” within their own company.
- Dependent Coverage: If the director has dependents who need to be covered under NHI, they must also be enrolled under the director through this company.
- Insured Amount: The insured payroll bracket for the director cannot be lower than the highest insured payroll bracket of any other employee in the company.
🛡️ 2. Labor Insurance Rules (Depending on Headcount)
Mandatory vs. Voluntary DifferencesWhether a company director can enroll in Labor Insurance depends on whether the company hires employees (specifically, crossing the mandatory threshold of 5 or more employees):
- Fewer than 5 Employees:
• According to the Bureau of Labor Insurance, companies with fewer than 5 employees are not mandated to set up a Labor Insurance unit.
• If the company does not set up a Labor Insurance unit for its employees, the director cannot independently enroll in Labor Insurance through their own company (they must enroll via a professional union instead).
• If the company voluntarily sets up a Labor Insurance unit and enrolls employees, the director may join them. - 5 or More Employees (Including 5):
• By law, this is a mandatory insuring entity, and the company must process Labor Insurance for its employees.
• The director can (and must, in their capacity as an employer) enroll in Labor Insurance within their own company.
💰 3. Labor Pension Guidelines (New Pension Scheme Contributions)
Voluntary Contribution RulesThe new labor pension system (6% pension contribution) offers more flexibility regarding company directors:
- Status Distinction: The primary beneficiaries protected under the Labor Pension Act are “employed workers.”
- Director Contribution Regulations:
• As an employer, the director is not legally mandated to have the company contribute the 6% labor pension for themselves.
• However, if the director participates in Labor Insurance, they may voluntarily contribute to their pension within the range of 0% to 6% in accordance with the Labor Pension Act.
💡 Taiwan Tax Pro Friendly Tip:
Social insurance (Labor and Health Insurance) enrollment procedures and payroll tier determinations often vary due to changes in headcount or business entity structure (e.g., Limited Company vs. Limited Partnership vs. Sole Proprietorship). We recommend partnering with a professional bookkeeping firm to handle the setup of your social insurance units and director enrollment smoothly after company registration is complete!
Social insurance (Labor and Health Insurance) enrollment procedures and payroll tier determinations often vary due to changes in headcount or business entity structure (e.g., Limited Company vs. Limited Partnership vs. Sole Proprietorship). We recommend partnering with a professional bookkeeping firm to handle the setup of your social insurance units and director enrollment smoothly after company registration is complete!