20. How is the overdue penalty for Labor Pension contributions calculated? If the contributions become overdue again, how will the Bureau of Labor Insurance handle the matter?
- If a contributing unit fails to make the labor pension contributions (including Mandatory and Voluntary Pension Contributions) within the prescribed time limit and fails to make payment even after the expiration of the payment deadline, it shall be required to pay a late payment charge at three percent of the amount of the stipulated contribution, compounded on a daily basis, for the period from the day following the date of expiration date of the time limit until the day preceding the settlement date; however, the amount of the original stipulated such charge shall not exceed the amount of contribution. The Calculation method is listed as follows:
(1)Calculation method for overdue penalty: Employer’s Payable Contribution Amount (Voluntary Pension Contribution Amount) × 3％ × number of Overdue Days.
(2) Using the 10,000 Pension Contribution Payable for July as example, it should be paid in full by September 30. If the amount is not paid in full, the Bureau of Labor Insurance will mail out a letter for collection at the mid of October and ask the collectible unit to pay before October 31. If the collectible unit still has not paid by October 31, the Bureau of Labor Insurance will impose a 3% overdue penalty on a daily basis. If the collectible unit pays off the pension in full on November 18, the amount of overdue penalty is: 10,000 dollars ×3％×17 days＝5,100 dollars.
(3) Using the previous example, the overdue penalty for the 10,000 unpaid contributions for July will reach the same amount of the unpaid contribution on December 4. However, if using the overdue days of 34 days to calculate the overdue penalty, the amount is 10,200 dollars. The Bureau of Labor Insurance will still use the overdue pension payable of 10,000 dollars as the amount of overdue penalty.
- The Bureau will mail time limited payment notice to collect overdue penalty. If the insured unit fails to pay off contribution and overdue penalty within 30 days after being notified, the case will be transferred to Administrative Enforcement Agency for compulsory execution.
Note: The employer Mandatory contribution and the personal Voluntary contribution are billed through separate payment notices; therefore, official notices specifying the prescribed payment deadlines and the calculation of late payment charges will be issued separately to the employer, and the late payment charges will be calculated separately for each type of contribution.