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8. Why there is overdue penalty for the pension already paid? How does the overdue penalty for Labor Pension calculated? Is there any upper limit?

According to the regulations in Labor Pension Act, If an employer fails to contribute within the time limit and does not pay even after the deadline, a penalty at 3% of the overdue contribution shall be imposed on a daily basis for the period from the date immediately following the date of expiration of the time limit till the date immediately preceding the settlement date. The upper limit of the overdue penalty is the same amount of the overdue contribution.

  1. Calculation method for overdue penalty: Employer’s Payable Contribution Amount ×3%× Overdue Days.
  2. Using the NT$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 beginning 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 16, the amount of overdue penalty is: NT$10,000 ×3%×15 days= NT$4,500.
  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 NT$10,200. The Bureau of Labor Insurance still should use the overdue pension payable of NT$10,000 as the amount of overdue penalty: NT$10,000 × 3% ×34 days ≒ NT$10,000(Overdue Penalty Payable)


Last Update:2019-08-06