Should You Pay Taiwan’s National Pension? No Fine for Skipping, but 10 Years of Arrears Costs You Forever | 4.8-Year Payback

Data as of: 2026-11-01. Monthly insured amount NT$21,103 and premium rate 10.5% per the Ministry of Health and Welfare’s 2026 notice; Formula A add-on NT$4,049 per the Bureau of Labor Insurance (since January 2024). The Legislative Yuan is reviewing a higher add-on; the final reading will decide.

I made three shorts on this topic, with 370,000 Facebook plays combined. The three match the three most common ideas people have about the National Pension:

• Not knowing they’re enrolled
• Thinking nothing happens if they don’t pay
• Thinking the NT$1,329 would do better in an ETF

The conclusion in three sentences:

• You may already be enrolled. If you’re 25–65 without Labor, Farmer, Government Employee or Military insurance, the Bureau of Labor Insurance enrolls you automatically.
• The National Pension is a good deal. The premiums you pay yourself come back in 4.8 years once you start claiming at 65, however many years you paid.
• The costliest part of not paying isn’t a fine. Arrears older than 10 years can’t be paid off, and you permanently lose the Formula A NT$4,049.

Where I stand: I’ve been in the National Pension myself, and I paid the premiums during that time. Should you pay? Yes. The National Pension isn’t about investing; it’s about coverage years.

1. You may be enrolled without knowing it

National Pension Act Article 7: people aged 25 to 65 with household registration in Taiwan, not covered by Labor, Farmer, Government Employee or Military insurance are enrolled automatically by the Bureau of Labor Insurance. No application needed.

The most common cases:

• Stay-at-home parents
• People between jobs
• A two-month gap when changing jobs
• Freelancers not in an occupational union
• New business owners

The bill comes every two months: NT$2,658 per bill for a regular enrollee in 2026 (NT$1,329 a month). Many people think it’s a scam and throw it away.

You aren’t paying the full premium

The full premium is NT$2,216 a month (21,103 × 10.5%). You pay 60%; the government pays 40%, NT$887 a month.

What you get is five kinds of protection:

2. Why it’s a good deal: 4.8-year payback, regardless of years paid

The National Pension old-age pension has two formulas, and the Bureau pays whichever is higher:

• Formula A: monthly insured amount × years × 0.65% + 4,049
• Formula B: monthly insured amount × years × 1.3%

Start with Formula B. Each year you pay adds 1.3% of the monthly insured amount to your monthly pension after 65.

How much do you pay yourself each year? The rate is 10.5% and you pay 60%, which is 6.3% of the monthly insured amount.

6.3 ÷ 1.3 = 4.85 years.

Both sides scale with the insured amount and the years, so whether you pay 5 years or 40, your own money comes back in 4.8 years. Start at 65, break even before 70, and every month after that is extra.

Short contributors do even better, because Formula A adds NT$4,049. With 15 years: Formula A pays NT$6,107 a month vs NT$4,115 for Formula B, and your own premiums come back in 3.3 years. Formula B only beats Formula A at roughly 29.5 years or more.

The NT$4,049 comes from the government budget, not the National Pension fund (National Pension Act Article 30).

Wouldn’t an ETF be better?

This part is my own calculation using assumptions — take it as a concept.

Invest NT$1,329 a month for 40 years at an assumed 4% real annual return, and at 65 you’d have about NT$1.57 million (in today’s money). At a 4% withdrawal rate, that’s about NT$5,200 a month.

Pay the National Pension for 40 years and Formula B pays about NT$10,974 a month, adjusted for inflation, for life, with disability and survivor protection on top.

The gap comes from two things: the government pays 40% for you, and an annuity insures you against living too long. Your own savings can run out; an annuity doesn’t.

3. What happens if you don’t pay? The real penalty is losing the “pick the higher” option

No fine for you, but three consequences

1. Your spouse is jointly liable. If unpaid after a deadline, the spouse can be fined NT$3,000–15,000 (National Pension Act Articles 15 and 50).
2. Late payments carry interest.
3. Arrears older than 10 years can’t be paid off, and those years never count (National Pension Act Article 17).

Also, if something happens while you’re in arrears and you claim a benefit, the Bureau can withhold payment until the arrears are cleared (Article 16).

Number 3 is the costliest

The Bureau of Labor Insurance rules are clear: people with arrears older than 10 years that can no longer be paid can’t choose Formula A.

For someone with 15 years:

Over 20 years, that’s NT$478,000 less.

So the costliest part of not paying isn’t those years of premiums; it’s losing the right to pick the higher formula. If the Legislative Yuan raises the add-on, the gap only grows — on the same condition: you have no arrears older than 10 years.

What to do now

1. Check for arrears. Use the Bureau of Labor Insurance online service (or call the Bureau) to check whether you or your family have unpaid National Pension premiums.
2. Pay off anything within 10 years. If you can’t pay at once, apply for installments; low-income, lower-middle-income and disabled enrollees get premium subsidies.
3. Don’t throw the bill away. Gaps between jobs, time off to raise kids — those bills are your coverage years.

There’s only one thing never to do: let arrears pass 10 years.

FAQ

The videos

The full math in one long video:

Three one-minute shorts:

Further reading

Lazy conclusion

懶大

金融科技新創 CEO | 獨立財務顧問

1. Automatic enrollment: aged 25–65 without Labor, Farmer, Government Employee or Military insurance means you’re in the National Pension — don’t throw away the NT$2,658 bill
2. The government pays 40%: the full premium is NT$2,216; you pay NT$1,329
3. 4.8-year payback: Formula B, 6.3% paid ÷ 1.3% received, however many years you pay
4. 10 years of arrears is the costliest: Formula A is gone for good; with 15 years that’s NT$1,992 less a month, NT$478,000 over 20 years
5. What to do: check arrears, pay off anything within 10 years, and apply for installments or subsidies if you can’t afford it

The National Pension isn’t about investing; it’s about coverage years.

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Sources

• National Pension Act Articles 7, 12, 15, 16, 17, 30, 47, 49, 50 (Laws & Regulations Database D0050152)
• Ministry of Health and Welfare: 2026 National Pension monthly insured amount NT$21,103 (mohw.gov.tw/cp-16-84487-1.html)
• Bureau of Labor Insurance: National Pension premium rate 10.5% (bli.gov.tw/0108795.html)
• Bureau of Labor Insurance: old-age pension Formulas A and B and cases where Formula A can’t be chosen (bli.gov.tw/0014336.html)
• Actuarial figures: November 2024 reports in the Commercial Times and others citing the Bureau’s actuarial report
• Math: Formula B payback = 6.3% ÷ 1.3% = 4.85 years; 15-year Formula A 21,103 × 15 × 0.65% + 4,049 = 6,107; Formula B 21,103 × 15 × 1.3% = 4,115 (ignoring inflation adjustments)

This post explains the rules and runs example numbers. It is not individual benefit advice. Check your own coverage years and amounts with the Bureau of Labor Insurance.