Taiwan Labor Pension 6% Calculator (新制勞工退休金)

Under the new Labor Pension Act, your employer must contribute 6% of your monthly salary to your individual labor-pension account at the Bureau of Labor Funds. Employees can voluntarily contribute 1-6% on top, which is tax-deductible. The account earns the Bureau's investment return and is withdrawable at age 60.

Tax-deductible
Bureau guarantee 2-year deposit rate min
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Employer 6% + Employee voluntary
Employer 6%
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Employee Voluntary
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Annual Contribution
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Annual Tax Savings
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Future Value at 60
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Taiwan New Labor Pension System (新制) — 6% Employer Mandate

Since July 1, 2005, all formal-sector employees are covered by the new defined-contribution Labor Pension. Employers must contribute 6% of monthly insured salary to each worker's individual account. The account is portable — it follows the employee across jobs. Contributions are invested by the Bureau of Labor Funds (BLF), with a government-guaranteed minimum return equal to the 2-year savings rate of the Bank of Taiwan. Insured-salary cap NT$150,000/month. Source: Ministry of Labor (mol.gov.tw).

Employee Voluntary Contribution — Up to 6% Tax-Deductible

Employees can voluntarily contribute 1-6% of monthly salary. Critical benefit: voluntary contributions are deductible from taxable income (similar to a 401(k)). For a 20% marginal-rate worker contributing 6% on NT$60,000 salary, that's NT$43,200/year deductible — about NT$8,640 in tax savings. The matched return + tax shield typically beat private retirement accounts for middle-income earners.

Withdrawal at Age 60 — Lump-Sum or Annuity

At age 60, employees with 15+ years of contributions can choose monthly annuity. Less than 15 years: lump-sum only. The annuity is paid for life (single annuitant or joint) using actuarial conversion. Early withdrawal before 60 not permitted except on death (paid to heirs) or disability. Source: Bureau of Labor Funds (blf.gov.tw).

New vs Old Labor Pension System

Workers hired before July 1, 2005 had the option to stay in the old defined-benefit system (calculated from years of service × average salary) or switch to the new defined-contribution. Most switched because the new system is portable; the old required staying with one employer to vest fully. The two are not combinable for years of service.