HR and Payroll in Nepal 2026 — SSF 31%, Minimum Wage Rs 19,550 and Labour Act 2074 Guide | MICS Blog

HR and Payroll in Nepal 2026 — What Every Employer Should Know

Nepal's employment rules changed a lot in the last decade. The Labour Act 2074 (2017) replaced the old 2048 Act, and the contribution-based Social Security Fund (SSF) now sits at the centre of payroll. Many small Nepali businesses — hotels in Pokhara, trading firms in Birgunj and Biratnagar, schools and clinics in Kathmandu — still run HR on Excel and paper registers. This guide puts the numbers an HR person needs in one place.

> Figures below are from published notices and law-firm summaries as of late 2025. Always confirm against the Government of Nepal gazette and the Department of Labour before you pay.

1. Minimum wage from Shrawan 2082

The tripartite agreement raised the minimum monthly wage from Rs 17,300 to Rs 19,550, effective 1 Shrawan 2082 (July 2025):

| Part | Monthly | Daily |

|---|---|---|

| Basic wage | Rs 12,170 | Rs 470 |

| Dearness allowance | Rs 7,380 | Rs 284 |

| Total | Rs 19,550 | Rs 754 |

Part-time workers: at least Rs 107 an hour. That is an increase of about 13% over the previous rate.

2. Social Security Fund — the 31% split

Under the Contribution Based Social Security Act 2074, the total contribution is 31% of basic salary:

Employee: 11% (10% provident fund + 1% social security tax)
Employer: 20% (10% provident fund, 8.33% gratuity, 1.67% other schemes)

Common mistakes we see: calculating SSF on gross instead of basic, forgetting new joiners in the month they join, and paying late. A payroll system should compute this every month from the basic salary on record, not from a fixed number someone typed once.

3. Working hours and overtime

8 hours a day, 48 hours a week
Overtime at most 4 hours a day and 24 hours a week, and only with the worker's consent

An attendance system has to know each worker's schedule to flag overtime correctly — a flat "9 to 6" for everyone does not work for hotels and factories that run shifts.

4. Leave

Summaries of the Act and Rules 2075 commonly give:

Home leave: 1 day for every 20 days worked (about 18 days a year), carried forward up to 90 days; the excess is paid on leaving
Sick leave: published guides say 12 or 15 days a year — check the current Rules for your sector
Public holidays, maternity and paternity leave as per the Act

Because Nepal follows the Bikram Sambat calendar for most official dates, staff and HR think in Shrawan, Bhadra, Ashwin — while bank and software systems use AD dates. Leave balances, festival dates and payroll months must line up across both.

5. Festival allowance (Dashain bonus)

Section 37 of the Act requires one month's basic salary once a year as festival allowance, pro-rated for employees with less than a year of service. Most firms pay it before Dashain. Plan the cash flow — for a 30-person firm this is a full extra month of basic salary in Ashwin.

6. Identity documents — no Aadhaar in Nepal

Indian HR software often assumes Aadhaar and PAN. In Nepal the documents are different: the citizenship certificate (nagarikta), the National ID (NID), and the Nepal PAN from the Inland Revenue Department. An HR system for Nepal must ask for these, not leave Indian fields half-empty.

Indian firms with Nepali staff

Many firms in Bihar, UP, Uttarakhand, Bengal and Delhi employ Nepali citizens in India. Two points HR often gets wrong:

Under EPF rules, Nepali and Bhutanese citizens working in India are not "international workers" — they are covered like Indian employees.
An EPFO circular of 29 November 2024 lets Nepali and Bhutanese members who have no Aadhaar and live outside India settle claims with alternate ID such as the citizenship certificate.

So the profile must accept a citizenship certificate in place of Aadhaar — otherwise HR ends up typing fake numbers just to save the form.

What HRPM does today for Nepal

HRPM is our HR system built in India. Today it already:

Picks identity documents by country — Nepal staff are asked for citizenship certificate, NID and PAN, never Aadhaar
Lets each firm set its own working hours, shifts, leave and attendance rules instead of fixed defaults
Records GPS and phone punches, with punch reminders on the HRPM Android app
Works in English and Hindi

Nepal SSF payroll and the Bikram Sambat calendar view are on our roadmap — Nepal is our next country. If you run a firm in Nepal and want to shape it, talk to us.

Sources

Minimum wage 2082: The Himalayan Times, Pradhan & Associates
SSF split: Pioneer Law
Labour Act 2074 summary: NBSM, Remofirst
EPF for Nepal / Bhutan nationals: Deloitte tax alert

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HRPM is built by MICS in India for Indian and South Asian firms. Free demo: +91 9355273535 | admin@mics.asia | https://hrpm.mics.asia