Cross-country comparisons haveidentified several enabling conditions required to ensurethe sustainability of payroll tax-based systems. These are:(i) a large formal labour market; (ii) a growing economy;(iii) an administrative capacity for collection; and (iv)good regulatory and oversight structures. Politicalwillingness is another important factor. The brief belowdiscusses in detail the technical enabling conditions in thecontext to introduce and expand social health insurance inPapua New Guinea (PNG). Successful introduction of socialhealth insurance (SHI) financing in PNG will, in part,depend on the feasibility of expanding coverage to theentire population, including the informal sector. A secondimportant factor is how an increase in contribution rateswill affect labour and capital markets. Expanding SHIcoverage to the informal sector will be challenging inalmost all contexts. The population in the formal sector isrelatively easy to enrol and collect contributions from dueto the availability of employment earnings records. Thepopulation in the informal sector is typically notaffiliated with any organisation from which to enrol andcollect premiums. They are also poorer and less able toafford premiums.