SSF Calculation in Nepal: What It Is and How It Works

SSF Calculation in Nepal: What It Is and
How It Works
SSF calculation in Nepal confuses a lot of employers, especially those who are dealing with it
for the first time. You hear "31%", you see numbers being deducted from salaries, and then
there are deadlines and portals and benefit schemes. It can feel like a lot.
The reality is that, after you grasp the concept, SSF isn't that complicated. You need to have it
explained to you in simple terms.
This article does that very thing. By the finish, you will be able to understand what SSF is, how it
works with the numbers, what you should do every month and what you would need to do if
anything went wrong.
What is SSF?
SSF stands for Social Security Fund. It is known as सामािजक सुरा कोष (Samajik Suraksha
Kosh) in Nepali.
Like a monthly payment both you (the employer) and your employee pay for together, so that
your employee will be financially protected when they need it the most! Whether it's a medical
emergency, workplace accident, retirement or a family event — SSF is there to support them.
The government of Nepal has introduced SSF through the Contribution Based Social Security
Act, 2074 (2017).
It replaced the old Employee Provident Fund (EPF) and gratuity system and brought everything
under one roof.To make SSF calculations easier and error-free, many businesses now rely on
an automated payroll system that handles deductions and compliance automatically.
Who Needs to Register for SSF?
If you run a registered business in Nepal and you have employees — you must register for
SSF. There are no exceptions based on company size or industry.
It does not matter if you have 1 employee or 500. The law applies equally.
The following must register:
● Private limited and public limited companies
● Sole proprietorships and partnerships
● NGOs and INGOs

● Cooperatives, banks, and microfinance institutions
● Foreign companies operating in Nepal
It is your job as the employer to register your employees — they cannot do it themselves.
Managing this properly becomes much easier with an employee management system that
keeps all employee records, joining dates, and compliance data in one place.
A quick note for FY 2082/83: Starting this fiscal year, even newly appointed government
employees fall under SSF instead of the old pension and gratuity system. Now SSF is
truly set as the benchmark for Nepal's formal workforce.
What is actually SSF Calculation in Nepal?
In Nepal, the calculation of SSF is as simple as:
The SSF will take 31% of your employee's basic salary each month.
That 31% does not come from one pocket — it is shared between the employee and the
employer.
Who
Pays
How Much
Made Up Of
Employee
11%
Provident Fund (10%) + Social Security Tax (1%)
Employer
20%
Provident Fund (10%) + Gratuity (8.33%) + Additional (1.67%)
Total
31%
All four SSF benefit schemes
The employee's 11% is deducted from their salary. The employer's 20% is an additional cost
that the company bears on top of the salary.
One rule you must always follow: SSF is calculated on basic salary only. Allowances,
bonuses, travel expenses, and other salary components do not count. Only the basic salary
figure goes into the calculation.
Let's Calculate It With a Real Example
Say your employee's basic salary is NPR 50,000 per month.
Here is exactly what happens:
Employee pays 11%: NPR 50,000 × 11% = NPR 5,500 You deduct this from their salary before
paying them.

Employer pays 20%: NPR 50,000 × 20% = NPR 10,000 You pay this separately, on top of their
salary.
Total going to SSF every month: NPR 5,500 + NPR 10,000 = NPR 15,500
Now you might wonder — where does the employer's NPR 10,000 actually go? The SSF splits it
across four benefit schemes like this:
Scheme
What It Covers
Rate
Medical, Health & Maternity
Hospital bills, OPD, maternity care
1%
Accident & Disability
Workplace injury, disability support
1.4%
Dependent Family / Life
Insurance
Lump sum to family if employee passes
away
0.27%
Old Age Protection
Pension and retirement fund
Remaining
amount
The bulk of the employer's contribution goes into Old Age Protection — this is what builds the
employee's retirement savings over the years.
That is SSF calculation in Nepal in its simplest form. A percentage of basic salary, split between
two parties, deposited monthly.
Hajir HRM calculates all of this automatically. Whether you have 5 employees or 500, Hajir HRM
works out the 11% and 20% for each person, keeps allowances out of the calculation, and
generates payslips with the correct deductions every month.
What Do You Need to Do Every Month?
Once you understand the calculation, the monthly process is straightforward.
Step 1: Run payroll and calculate each employee's 31% based on their basic salary.
Step 2: Deduct the 11% from the employee's salary.
Step 3: Deposit the full 31% — employee share plus employer share — to the SSF. You can
pay through:
● ConnectIPS
● eSewa
● Khalti
● FonePay
● Partner banks and online banking services

Step 4: Log in to the SSF portal at ssf.gov.np and upload your payment voucher or
confirmation slip. Your contribution is not complete until you do this step.
Step 5: You can check your contribution status anytime by sending "SSF" to 41042 via SMS.
The deadline: All of this must be done within 15 days from the end of each month. So if you
are paying contributions for Baisakh, the deadline is the 15th of Jestha.
What Happens If You Miss the Deadline?
Life gets busy. But with SSF, missing a deadline has real consequences — so it is worth
knowing upfront.
Late payment: The SSF will recover the unpaid amount along with 10% interest.
Non-registration of employees: If you hired someone and did not register them within 3
months, the SSF can require you to immediately enroll them, pay all back contributions with
10% interest, or compensate the employee for every benefit they missed out on.
Misappropriation (this means you deducted the 11% from your employee's salary but did not
deposit it to SSF): This is treated seriously. The employer can face a fine up to NPR 1,00,000
or imprisonment up to 1 year — or both.
These are not meant to scare you. They are just the rules. And if you stay on top of your
monthly process, none of this applies to you.
SSF vs PF vs CIT — What Is the Difference?
If you have worked in Nepal for a while, you have probably come across all three names —
SSF, PF, and CIT. They all involve deductions from your salary, and they all relate to saving for
the future. But they are very different from each other.
Here is a simple way to understand all three:
SSF (Social Security Fund) is your complete protection package. It covers you today —
medical bills, accidents, maternity — and also builds your retirement. It is mandatory for all
private-sector employers.
PF (Provident Fund / EPF) is a straightforward retirement savings account. Both you and your
employer contribute, the money earns interest, and you get it back when you leave the job or
retire. It was the main retirement tool before SSF came in.
CIT (Citizen Investment Trust / Nagarik Lagani Kosh) is a voluntary government-backed
investment and savings scheme. You choose how much to contribute, it earns interest, and it

gives you a significant tax deduction benefit. Think of it as an optional top-up to your retirement
savings.
SSF
PF (EPF)
CIT
Full name
Social Security Fund
Employees
Provident Fund
Citizen Investment
Trust
Mandatory?
Yes — all private
employers
No longer
mandatory if under
SSF
No — fully voluntary
Who
contributes?
Employee + Employer
Employee +
Employer
Employee (employer
optional)
Total
contribution
31% (11% + 20%) of
basic salary
20% (10% + 10%)
of basic salary
You decide the
amount
Medical
coverage
Yes
No
No
Accident
protection
Yes
No
No
Maternity benefit
Yes
No
No
Retirement /
Pension
Yes
Yes (lump sum)
Yes (lump sum +
interest)
When can you
withdraw?
At retirement (60+) or on
leaving job
When leaving job or
retiring
Flexible — based on
scheme rules
Tax benefit
1% SST waived +
deductible up to NPR
5,00,000
Reduces taxable
income
Deductible up to NPR
3,00,000 annually
Interest rate
(2082/83)
Returns managed by
SSF board
5.25% (4.25% base
+ 1% bonus)
8–12% historically
So which one applies to your business?
If you run a registered private company in Nepal, SSF is your primary legal obligation — you
cannot skip it. Once you contribute to SSF, you do not need a separate PF or gratuity
arrangement — SSF already covers both.
PF through EPF still applies mainly to government employees and companies that were
registered before SSF became mandatory. If your employees had EPF balances before moving