Business Entities Shall Deduct the Amount of Employees’ Voluntary Paid Pensions for 2024 from the Total Reported Salary Income
It is the time of year for reporting the 2024 Withholding and Non-Withholding Tax Statements. The Bureau of Labor Insurance (BLI) reminded all business entities to deduct workers’ personal voluntary paid pensions made in 2024 from their total reported salary income when reporting, to prevent employees from overpaying taxes.
As the BLI explained, to encourage employees to make voluntary paid pensions, in accordance with Article 14, Paragraph 3 of the Labor Pension Act, workers might voluntarily contribute up to 6% of their monthly wage to the labor pension, which would not be included in the income tax withheld from their annual salary. Therefore, when preparing the Withholding and Non-Withholding Tax Statements, business entities should report the amount of workers’ voluntary paid pensions during the year in the field for “Voluntary Contribution According to the Labor Pension Act,” and the voluntary contributions should be deducted from the “Total Payment Amount” field.
The BLI provided the following example. Assuming that the total monthly wage of a worker during year 2024 was NT$45,000 (with the monthly contribution wage level set at NT$45,800 for labor pension) and they were entitled to a year-end-bonus equal to two months’ wages, the total income from salary of the worker for the year 2024 would be NT$630,000 (NT$45,000 x 14 months). If the voluntary monthly contribution rate of the worker was 6% in 2024, the amount reported in the “Voluntary Contribution According to the Labor Pension Act” field on the 2024 Tax Statement would be NT$32,976 (NT$45,800 x 6% x 12 months). The “Total Payment Amount” field, therefore, should reflect NT$597,024 (NT$630,000 - NT$32,976).
The BLI also reminded all workers who made personal voluntary paid pensions in 2024 that, when filing their tax returns in 2025, they must check and reconfirm that the voluntary paid pension has been deducted in full from their total personal salary income for the year. If the deduction was not made or was incorrect, the worker should promptly inform the business entity to apply for correction at the local branches or offices of the National Taxation Bureau, thereby protecting their rights and interests.