In 2018, Taiwan’s government made a number of changes to the country’s wage, tax and insurance systems, including the introduction of a higher minimum wage, tax exemptions, and a contribution rate adjustment to the Occupational Accident Labor Protection Act (OALPA).
What is OALPA?
Part of the the wider Labor Insurance Act since January 2010, OALPA is a mandatory insurance scheme which all employers in Taiwan (with more than five employees) must implement.
Occupational Accident Labor Protection Insurance is specifically intended to improve health and safety in the workplace and to lower the number of occupational accidents suffered by workers in high-risk professions - while simultaneously lowering premiums for those professions at lower risk of accidents.
The OALPA offers workers financial benefits for childbirth, hospitalisation, disability, and death - and includes compensation for occupational injuries. Under OALPA, workers who are injured as a result of their work receive financial compensation even if they are not enrolled in a Labor Insurance scheme. OALPA is divided into two types: ‘Business Category Accident Premium’ and ‘On and Off Duty Accident Premium’.
Updates to OALPA in 2019
Article 13 of the Labor Insurance Act states that contribution rates for OALPA are determined by an employee’s monthly salary, or by the ‘Table of Categories for Occupations and Premium Rates Applicable for Occupational Accident Insurance’.
As of 1 January 2019, contribution rates to the Occupational Accident Labor Protection Insurance have been updated. Under the new regime, those rates are as follows:
- On and Off Duty Accident Premium - 0.07%
- Business Category Accident Premium - 0.04% - 0.89%
The On and Off Duty Accident Premium rate remains unchanged in 2019 and is set by Taiwan’s central authority - the Business Category, on the other hand, varies by occupation and risk factor.
For employers with more than 70 employees, Business Category premiums are calculated using the Experience Rate Schedule which is designed to take into account the risks associated with certain workplaces and professions.
The annual calculation of Business Category premiums is based on the three-year period prior to the previous year. Accordingly, the 2019 rates, take into account the rates from 2015, 2016, and 2017. Once set, annual rates must be approved by the Executive Yuan, and referenced by the Legislative Yuan.
To learn more about Taiwan’s latest insurance and tax rates, browse activpayroll’s dedicated Global Insight Guide...