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 सामाजिक सुरक्षा 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 employeesyou 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 onbasic 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 isNPR 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 intoOld 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.
- Run payroll and calculate each employee’s 31% based on their basic salary.
- Deduct the 11% from the employee’s salary.
- Deposit the full 31% — employee share plus employer share — to the SSF. You can pay through:ConnectIPS, eSewa, Khalti, FonePay or Partner banks and online banking services
- Log in to the SSF portal atssf.gov.np and upload your payment voucher or confirmation slip. Your contribution is not complete until you do this step.
- You can check your contribution status anytime by sending“SSF” to41042 via SMS.
The deadline: All of this must be donewithin 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 with10% 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 afine up to NPR 1,00,000 orimprisonment 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.
Difference Between SSF, PF, and CIT
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 to SSF, those balances must be transferred provident fund within 6 months and gratuity within 2 years of SSF registration.
CIT is something employees can choose on their own or you can offer it as an added workplace perk. Many companies in Nepal allow CIT deductions through payroll as a goodwill benefit, even though it is not required.
The simplest way to think about it:SSF is your legal must-do. CIT is your optional extra. PF is the old system being phased out.
Hajir HRM handles all three. Whether your employees are on SSF, have existing PF balances, or contribute to CIT, Hajir HRM tracks every deduction accurately and reflects it correctly on every payslip. No manual calculations, no missed contributions.
What Benefits Does an Employee Actually Get?
It is easy to think of SSF as just a deduction. But it is worth reminding your employees what they actually get in return.
Medical benefits: After 3 months of contributions, employees can claim up to NPR 100,000 per year for hospitalized treatment and NPR 25,000 for outpatient treatment at any SSF-empanelled hospital across Nepal.
Maternity benefits: After 12 months of contributions, SSF covers pregnancy-related expenses — including tests, hospitalization, and childbirth costs.
Accident coverage: This kicks in from the very first contribution.When an employee receives an injury at work (or on the way to or from work) SSF pays for the employee’s medical expenses, and offers disability benefits.
Life insurance for the family:When an employee dies, his or her spouse gets a lifetime monthly pension of 60% of the employee’s last basic salary. They get 40% as their children’s education is provided until they are 18 years old (2 children) through an employee lifecycle management software.
Old age pension:Employees contributing to the Social Security Fund (SSF) become eligible for a monthly lifetime pension after reaching the age of 60 and completing at least 15 years (180 months) of contributions. The pension amount is calculated based on total contributions and accumulated investment returns.
Loans: At the end of 36 months of regular contributions, employees have the option to apply for a home loan (up to NPR of 75,00,000), education loan (up to NPR of 35,00,000) and social function loan (up to NPR of 5,00,000).
These are real, tangible benefits — not just deductions on a payslip.
A Note on Tax Benefits
Here is something many employees do not know:SSF contributors do not pay the 1% Social Security Tax on their income. Since SSF contributions already fulfil the social security obligation, this tax is automatically waived.
On top of that, SSF contributions are tax-deductible up toNPR 5,00,000 or one-third of employment income — whichever is lower. This directly lowers the employee’s taxable income and reduces their annual tax bill.
Now You Know — So What Is Next?
SSF calculation in Nepal is really just one rule:31% of basic salary, every month, on time. Once that clicks, the rest falls into place.
The tricky part for most businesses is not understanding SSF — it is keeping up with it month after month without errors. Different employees, different basic salaries, different joining dates, and a deadline that comes around every single month.
That is where having the right payroll system makes all the difference. Hajir HRM was built specifically for Nepali businesses — it handles SSF, PF, CIT, and every other payroll compliance requirement automatically, so nothing slips through.
Over1,600 organisations across Nepal already use Hajir HRM to stay compliant and save hours every payroll cycle.
Want to see it in action? Book a Free Demo with Hajir HRM →
FAQ's
The total rate is 31% of the employee's basic salary with 11% coming from the employee and 20% coming from the employer.
Yes. There are no size thresholds for the law. If only one employee, you're still required to register and pay.
No later than 15 days after the end of every month. The contribution for Baisakh has to be done by 15th of Jestha, and so forth.
Basic salary only. Allowances, bonuses and other components are not part of the SSF.
Interest on the delinquent amount at the rate of 10% per annum. Misappropriation of employee deductions may receive a fine of up to NPR 1,00,000 or, imprisonment of up to 1 year.
No. Provident fund and gratuity are already covered by No. SSF. No separate arrangement is necessary after enrollment in SSF.
SSF is compulsory and provides protection in the event of medical, accident, maternity and pension accidents. The old retirement system was called PF (EPF) and is being replaced by SSF. CIT is a voluntary government sponsored saving and investment scheme which provides significant tax deduction benefits. Today most workers are employed in the private sector and are covered by SSF plus the optional CIT.
