.png)
Nepal has a high SSF contribution (employer 20% + employee 11% = 31% total), progressive income tax, mandatory gratuity within SSF, and festival bonuses (Dashain and Tihar). Growing Kathmandu tech sector. Rippling handles SSF, IRD, and Nepal Labour Act compliance.
Nepal is a South Asian lower-middle-income economy with a growing technology outsourcing sector in Kathmandu. Nepal has a young, educated, English-proficient workforce with competitive salaries for USD-paying employers. Nepal's technology industry (ICAN members) serves global markets in IT outsourcing, software development, and digital services. Nepal uses the Nepalese rupee (NPR), pegged to the Indian rupee.
| Contribution | Rate | Notes |
|---|---|---|
| SSF (employer) | 20% | Covers pension (10%), medical (7%), accident (1%), gratuity (2%) |
.svg)
| Contribution | Rate | Notes |
|---|---|---|
| SSF (employee) | 11% | Pension, medical, accident, gratuity branches |
| Income tax (PIT) | 1–36% | Progressive; withheld monthly by employer |
| Annual Income (NPR) | Rate |
|---|---|
| Up to 600,000 | 1% |
| 600,001–800,000 | 10% |
| 800,001–1,100,000 | 20% |
| 1,100,001–2,000,000 | 30% |
| Above 2,000,000 | 36% |
Basic exemption: NPR 500,000 (single); NPR 600,000 (couple). Monthly PIT withholding by employer; remitted to IRD.
Notice: 1 month. Severance (retrenchment): 1 month's basic salary per year of service. Gratuity is included within SSF contributions. Department of Labour notification required for collective dismissals.
Nepal's SSF (Social Security Fund, Samajik Suraksha Kosh) replaced the old Employees' Provident Fund (EPF) and Employees' Gratuity Fund (EGF) for most employers. Employer total contribution: 20% (pension 10%, medical 7%, accident 1%, gratuity 2%). Employee: 11%. Total SSF contribution: 31% of gross. This is a significant on-cost; budget carefully.
Nepal's minimum wage for unskilled workers is NPR 15,000/month (2024). Skilled workers and specific sectors have higher minimums set by the Minimum Wages Fixation Committee. Nepal reviews minimum wages periodically. The NPR is pegged to the Indian Rupee (INR) at 1.6 NPR/INR.
Nepal has a growing IT services and software development sector in Kathmandu, particularly in IT outsourcing, fintech, and digital solutions. Nepal's tech talent is well-educated, English-proficient, and cost-competitive for USD-paying employers. Major markets served include India, the US, UK, and Australia. Nepal's IT industry association (ICAN) has over 600 member companies.
Nepal mandates festival allowances (Dashain and Tihar bonuses), which are cultural expectations equivalent to 1 month's basic salary each. These are not strictly codified as statutory payments in the Labour Act for all employers, but are near-universal market practice and may be required under collective agreements. Budget 2 additional months of basic salary per year for festival allowances.
