Yes, participation in the Social Security Fund (SSF) is compulsory for employees and employers in Nepal’s formal private sector and public enterprises. Employers must register their staff and contribute a total of 31% of the employee’s basic salary11% from the employee’s salaryand20% from the employer. For self-employed individuals, informal sector workers, and government employees covered by other benefit schemes, joining the SSF is optional.
Yes, even if an employer has only a few employees, participation in the Social Security Fund (SSF) is still required. The law does not make exceptions based on the size of the business. Once someone is formally employed, the employer must register with the SSF and start making regular contributions for each employee.
Employees must be enrolled in the Social Security Fund (SSF) by their employer, not by themselves. Once an employee is hired, the employer is legally required to register them in the SSF system within three months of their joining date. The responsibility for enrollment lies entirely with the employer, and employees are not allowed to self-enroll.
Yes, employers in Nepal are required to enroll part-time employees in the Social Security Fund (SSF) just like full-time staff. There are no exemptions based on hours worked or employment status part-time, contract, and temporary workers all must be included. Once a person is formally employed, the employer must register them in the SSF and begin monthly contributions.
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There is no government or SSF registration fee for employers or employees in Nepal. Enrolling in the Social Security Fund (SSF) is completely free.
In practice, it’s the employer’s responsibility to register both themselves and their employees in the Social Security Fund (SSF). If the employer fails to do so, the SSF can take action by asking them to immediately complete the registration, pay all outstanding contributions with 10% interest, or, if an employee leaves the job, compensate them with the amount they would have received from SSF benefits. This means any delay or negligence in enrollment or contribution directly puts the employer at risk, not the employee.
Here is the applicable contribution rate to the Social Security Fund (SSF):
| For | Contribution Heading | Contribution Rate |
|---|---|---|
| Employee | Provident fund Social Security Tax Total | 10% 1% 11% |
| Employer | Provident fund Gratuity Additional contribution Total | 10% 8.33% 1.67% 20% |
Total monthly contribution at SSF 31%
No, employers and employees are not required to make separate arrangements for provident fund, gratuity, or medical insurance if they are contributing to the Social Security Fund (SSF). The SSF contributions already cover these benefits, including pension (provident fund), gratuity, medical, maternity, accident, disability, and other social security benefits. Therefore, making additional separate provisions is not mandatory under the current SSF system.
Yes, employers can provide additional benefits beyond what the Social Security Fund (SSF) offers. .
Yes, employees are required to contribute toward the social security tax as part of their overall contribution to the Social Security Fund (SSF).
Employers are required to deposit the total monthly contributions 31% of an employee’s basic salary into the Social Security Fund (SSF) within 15 days after the end of each month. This means contributions for the month of Baisakh (Nepali month) should be deposited by 15th of Jestha, and so on. Failure to meet this deadline results in a 10% interest charge on the overdue amount. However, if the employer can demonstrate that the delay was due to circumstances beyond their control, they may apply for a partial or full waiver of the interest.
Employers in Nepal can deposit Social Security Fund (SSF) contributions through several methods: by bank deposit to Nepal Bank Limited (Account Name: Social Security Fund, Account No: 002116067200012000002), via Connect IPS, or through digital wallets like Khalti, eSewa, and FonePay.
If an employer fails to contribute to the Social Security Fund, the SSF may require immediate payment with 10% interest, impose fines or legal action.
The Social Security Fund (SSF) in Nepal offers four main benefit schemes:
A. Medical and maternity protection,
B. Accident and disability coverage,
C. Dependent family support, and
D. Old age protection, including pension and retirement benefits.
These schemes ensure social and financial security for workers and their families.
The Retirement and Pension Fund in the Social Security Fund provides monthly pension or lump-sum payments to employees after retirement, ensuring financial security in old age.
Contributors can withdraw from the Retirement Fund when they leave their job or reach the age of 60. Upon withdrawal, they may receive the total accumulated amount as a lump sum. Foreign nationals can withdraw their Retirement Fund any time after employment ends. Withdrawal requires submitting necessary documents to the Social Security Fund.
Contributors can withdraw funds from the Pension Fund only after reaching the age of 60. To receive a monthly pension, they must have contributed for at least 15 years (180 months). If they reach 60 without completing 15 years of contributions, they can choose to either take a lump sum payment of their accumulated amount or opt for a monthly pension calculated over 160 months. Withdrawal before age 60 is not allowed.
The monthly pension amount in Nepal’s Social Security Fund is calculated by dividing the total accumulated contributions and returns in the Pension Fund by 160, which provides a lifetime monthly pension. Contributors who reach age 60 but have not completed 15 years of contributions can choose either a lump sum withdrawal or receive a monthly pension based on this calculation.
If a contributor passes away before reaching 60, the Pension Fund balance is paid to their nominated family members or legal heirs as a lump sum. This ensures financial support for the contributor’s dependents in the event of untimely death.
If a contributor passes away after reaching 60, the remaining Pension Fund balance is paid to their nominated family members or legal heirs as a lump sum, ensuring continued financial support for the family.
Employees enrolled in the Social Security Fund on or before 31 Ashadh 2078 (15 July 2021) can allocate their full 28.33% contribution to the Retirement Benefit Scheme, allowing withdrawal upon job termination or at age 60. If they opt into the Pension Scheme by submitting a request, upon turning 60, they can choose either a lump sum payment or a monthly pension calculated by dividing the total accumulated amount by 160. These provisions offer flexibility based on the employee’s choice.
Employees enrolled in the Social Security Fund after 31 Ashadh 2078 (15 July 2021) are subject to updated rules: their monthly contributions are automatically split between the Retirement Fund (gratuity) and Pension Fund, with no option to choose. They cannot withdraw any portion of the Pension Fund until they reach age 60. Upon leaving employment before age 60, they are only eligible to withdraw the Retirement Fund portion (8.33% of salary), while the Pension portion remains inaccessible until retirement.
Yes, contributors to Nepal’s Social Security Fund can obtain loans under specific conditions. After contributing for at least 36 months, they may be eligible for loans such as home, education, social function, or special-purpose loans. The maximum loan amount is based on salary and contribution history, with limits such as up to 15 years’ salary, salary until age 60, or a fixed ceiling. Additionally, contributors can borrow up to 80% of their Retirement Fund balance after three years of contributions. Applications can be made through the SSF portal or app, and certain loans may require collateral.
Yes, employees can transfer their existing loans from the Citizen Investment Trust (CIT) or Employee Provident Fund (EPF) to the Social Security Fund (SSF). If an employee shifts from these approved retirement schemes to SSF, they are allowed to transfer the outstanding loan amount directly into the SSF without having to wait for the usual 3-year contribution period. This makes the transition smoother for employees who already have loans and want to continue repayment under the SSF system.
yes, employers are required to transfer any existing provident fund and gratuity amounts held in other approved retirement schemes or maintained in-house to the Social Security Fund (SSF). Provident fund balances must be transferred within six months, and gratuity amounts within two years after enrolling with the SSF. Employers are not allowed to keep separate retirement funds outside the SSF once registered, ensuring all benefits are managed under a unified system.
Upon employment termination, employees can withdraw their Retirement Fund balance, but the Pension Fund remains locked until age 60. If they later join another SSF-enrolled employer, contributions continue from where they left off.