Nepal Social Contributions Guide (SSF)

Contribution Rates

• Employee contribution — 11%: Deducted from the employee's basic pay. Split as: 9% towards the pension scheme and 2% towards the health insurance scheme. The employer deducts this from salary and remits it to the SSF along with the employer's share.
• Employer contribution — 20%: Paid by the employer on top of the employee's basic pay. Split as: 15% towards pension and 5% towards health insurance. This is a direct cost to the employer and is deductible for corporate tax purposes.
• Combined total — 31%: The total contribution per employee is 31% of basic pay (24% pension + 7% health). For an employee with basic pay of NPR 100,000, the monthly SSF contribution is NPR 31,000.
• SSF on net profit — 3%: In addition to the payroll-based contributions, employers must contribute 3% of net profit to the SSF annually (see our Corporate Tax Guide →).

Contribution Cap and Base

• Monthly cap: Contributions are calculated on basic pay up to approximately NPR 240,000 per month. Any basic pay above this cap is not subject to SSF contributions. The cap is periodically revised by the SSF board.
• Definition of basic pay: Basic pay includes the base salary as defined in the employment contract. Allowances (house rent, transport, medical, etc.) are generally excluded from the SSF contribution base, though the IRD and SSF may scrutinise excessive allowances.
• Over-time and bonuses: Overtime pay, festival bonuses, and annual bonuses are not considered part of basic pay for SSF purposes. They are, however, subject to income tax withholding.

Coverage and Benefits

• Pension scheme: Provides old-age pension to employees upon reaching retirement age (60 years). The pension amount depends on total contributions, years of service, and the investment returns earned by the SSF. Employees who contributed for at least 15 years are eligible for a monthly pension.
• Health insurance: Covers medical expenses for the employee and their immediate family (spouse and up to two children). Coverage includes hospitalisation, illness, and maternity care. The scheme is managed by the SSF in coordination with approved healthcare providers.
• Accident and disability: Provides lump-sum and periodic payments for work-related accidents and permanent disability. Funeral grants are also available.
• Maternity benefit: Female employees receive paid maternity leave (60 days) covered by the SSF. The benefit is calculated based on the employee's basic pay.
• Unemployment benefit: A limited unemployment benefit is available for contributors who lose their employment, subject to eligibility conditions.

Phased Implementation

• 2019 launch: The SSF scheme was launched in 2019 (2076 BS) and initially applied to large enterprises in the formal sector. Registration and contribution collection began on a voluntary basis before becoming mandatory.
• Mandatory rollout: As of 2026, SSF registration and contributions are mandatory for all employers with employees in the formal sector. The IRD and Department of Labour jointly enforce compliance.
• Transition from provident fund: Many employers previously operated private provident funds. The SSF is replacing these, though some employers maintain both arrangements during the transition period. The government aims for universal coverage of all formal-sector workers.

For retirement planning and pension benefits, see our Pension Guide →. For IT sector-specific SSF considerations, see our IT Sector Guide →.