Are Dividends Subject to Taiwan's 2nd-Gen NHI Premium?

Stock dividends can be subject to Taiwan's supplementary National Health Insurance premium. The decision does not depend only on whether cash was received. Check insurance status, the eligible amount of a single dividend payment, and whether it reaches the threshold. Under the NHIA's published rules, the rate is 2.11%; for a person not insured as an employer or self-employed person, a single eligible dividend payment of NT$20,000 or more is generally assessed on the full eligible amount.

The supplementary premium and individual income tax are separate systems. Withholding one does not settle the other.

Three questions to ask first

1. What is your NHI insurance status? Employer or self-employed status changes the eligible amount.
2. How much is this single dividend payment? The general threshold applies per payment, not merely to the annual total.
3. Do cash and stock dividends share the same record date? If so, they are treated as one payment for this purpose.

How does the NT$20,000 threshold work?

Not insured as an employer or self-employed person

A single dividend payment of NT$20,000 or more is generally included. Once the lower limit is reached, the calculation applies to the full eligible amount, not only the portion above NT$20,000.

Insured as an employer or self-employed person

The part already included in the insured amount is subtracted first. The remaining amount must reach NT$20,000 before the supplementary premium applies. Formal payer and insurance records are necessary for this calculation.

Specific hardship categories have different exemption conditions. Confirm eligibility with the payer or NHIA instead of relying only on the general threshold.

How is the premium calculated?

Supplementary premium = eligible dividend income × 2.11%

The general per-payment assessment cap for dividend income is NT$10 million. Actual withholding depends on payer records, status, and the NHIA's determination.

Three calculation scenarios

NT$30,000 cash dividend under general status

If no exemption applies, NT$30,000 × 2.11% = NT$633. The calculation is not limited to the NT$10,000 above the threshold.

NT$19,999 single payment under general status

It is generally below the NT$20,000 lower limit, subject to confirmation of the payment and applicable status.

Employer or self-employed insured person

If a NT$120,000 dividend includes NT$90,000 already reflected in the insured amount, the difference is NT$30,000. The illustrative calculation is NT$30,000 × 2.11% = NT$633, subject to formal determination.

Why can stock dividends be charged without a cash payment?

The NHIA explains that stock dividends are dividend income under Taiwan's tax law and dividend income is included in the supplementary premium system.

If cash and stock dividends share the same record date, they are treated as one payment. The payer deducts the stock-dividend premium, calculated using par value, from the cash dividend paid at the same time.

If cash is insufficient, or only stock dividends are distributed, the payer notifies the insured person and the NHIA collects the amount in the following year.

Does splitting a payment automatically avoid the premium?

No such assumption should be made. Corporate resolutions, record dates, payment arrangements, and reporting determine whether something is one payment. Use the payer's formal information.

What should you check?

• Your current NHI insurance status.
• Cash and stock dividend amounts and record dates.
• The eligible amount and withholding statement.
• Whether stock dividends were included at par value.
• Whether a hardship exemption applies.
• Supplementary-premium and income-tax records separately.

Five common misunderstandings

• Only cash dividends are charged—stock dividends can also be included.
• Only the amount above NT$20,000 is charged—the full eligible amount generally applies once the threshold is reached.
• The threshold is based only on the annual total—the general rule is per payment.
• Withholding settles income tax—the systems are separate.
• Everyone uses the same calculation—status and exemptions matter.

For dividend basics, read What Are Dividends?.

Dividend supplementary premium FAQ

Is exactly NT$20,000 included?

For a person under the general non-employer, non-self-employed rule, the NHIA uses “reaches NT$20,000,” so exactly NT$20,000 generally meets the lower limit.

Are dividends from different companies combined?

The general rule is based on each payment, but payer and reporting records control the actual result.

What if there is no cash to withhold from?

The NHIA states that the payer notifies the insured person and the NHIA collects in the following year.

Is stock dividend value based on market price?

The NHIA Q&A states that stock dividends in the same payment are calculated at par value.

Does this replace tax advice?

No. Income tax is separate and should be checked under the applicable year's rules.

References

Taiwan NHIA: Supplementary Premium Formula

Taiwan NHIA: Why Stock Dividends Are Subject to the Supplementary Premium

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Disclaimer: This article is for general information and education only and does not constitute investment, tax, or legal advice. Rules and personal circumstances can change; verify current information with the relevant authority, payer, or qualified professional.