Payroll
/
Nepal
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Available in +150 countries
Employer costs, taxes, minimum wage and leave rules for hiring here, plus the faster route: hire a contractor with Ontop, no local entity needed.
2026
Currency
NPR Rs (Nepalese Rupee)
Employer contributions
20% employer SSF (if registered) or 10% gratuity fund
Minimum wage
NPR 17,300/month (2026)
Payment frequency
Monthly
Shrawan 1 - Ashad end (mid-July to mid-July, Bikram Sambat fiscal year)
Capital
Kathmandu
Timezone
NPT (GMT+5:45)
Employee or contractor
If the work is project-based or you need to move fast, a contractor gets you the same talent with a fraction of the paperwork.
Employee
~NPR 60,000 total
/month
For a gross salary of
NPR 50,000 gross/month
Setup
Local entity or employer of record, plus tax and social security registration
Employer contributions
20% employer SSF (if registered) or 10% gratuity fund
Mandatory extras
Festival Allowance (Dashain Bonus)
Monthly admin
Monthly payroll - PAYE by end of month - SSF contributions - annual mid-July reconciliation
Contractor with Ontop
No local entity
$49
/contractor/month
The agreed rate, plus Ontop from $49 per contractor per month.
Sign a contract, yours or an Ontop template. No local registration on your side.
No employer contributions: the contractor handles their own taxes and social security.
One payment per invoice, in one payroll run.
Paid into their Ontop Global Account in USD.
See the full side-by-side comparison
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A contractor's rate usually covers their own taxes, so compare total cost, not just gross pay. Run your numbers in the contractor vs employee calculator.
Hiring here: the full breakdown
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Payroll guide
Employer costs come on top of gross pay. Use these figures to budget a hire and to compare it with a contractor rate.
Total monthly cost
~NPR 60,000 total
Example gross salary
NPR 50,000 gross/month
~NPR 36,000 net
Net pay to the employee
Tax and employee contributions
Withheld from gross pay
~NPR 10,000 SSF employer
Employer contributions on that salary
Employer contributions
20% employer SSF (if registered) or 10% gratuity fund
Employee contributions
11% employee SSF + income tax (PAYE)
Total cost above gross
~10% above gross
Figures are estimates for planning. Rates change with each budget and can vary by sector, so confirm them before you make an offer.
What people earn here, from the legal floor to the main cities, plus the extra pay most employers budget for.
National average
~NPR 40,000
Per month
Kathmandu
NPR 50,000 - 150,000
~40%
Pokhara
NPR 35,000 - 100,000
~10%
Monthly gross. National average salary per year:
~NPR 480,000
Minimum wage
NPR 17,300/month (2026)
Paid:
Monthly
Extra pay
Festival Allowance (Dashain Bonus)
1 month salary - mandatory - before Dashain festival
October (Dashain)
Collective agreements can set sector minimums above the national one. Check whether one applies to the role before you set the salary. Next step: estimate the full cost of an employee.
Who collects what, how often, and what happens when a payment is late.
Income tax brackets
1% up to NPR 500,000 / 10% / 20% / 30% / 36%
Tax year:
Shrawan 1 - Ashad end (mid-July to mid-July, Bikram Sambat fiscal year)
Filing calendar
Monthly by end of month
Social security payments
Ashad end (mid-July) - annual PAYE reconciliation
Income tax
By mid-July
Employee tax certificate
Annual Salary Certificate
Mid-July (Ashad end)
Annual return
Annual Income Tax Return
Late payment penalties
Late SSF: 10% surcharge; late PAYE: 10-50% penalty
Who collects what
Inland Revenue Department (IRD Nepal)
PAYE income tax
Social Security Fund (SSF)
Social security
Department of Labour and Occupational Safety
Labor law enforcement
The time off and paid leave every employee is entitled to by law. Budget for it when you compare an employee with a contractor.
Annual leave
Annual Leave
18 days/year (Hami - Home leave 12 + sick 6)
Public holidays
~35+ public holidays (Bikram Sambat calendar based)
Sick leave
Sick Leave
6 days/year full pay from employer
Maternity leave
14 weeks (98 days) maternity
Full pay employer for 60 days; SSF pays remainder (if registered)
The contracts you can use, and what ending an employment relationship costs.
Permanent
Permanent Employment Contract (Niyamit Kar-Samjhauta)
Fixed term
Fixed-Term Contract
Independent contractor
Service Contract
Collective agreements
Collective Bargaining Agreement
Ending employment
Gratuity / Severance
How it is calculated
Per Labour Act 2017: gratuity from SSF; severance 1 month per year
Calling someone a contractor does not make them one. If the role works like employment in practice, local authorities can reclassify it, with back contributions and penalties.
The errors that most often trigger back payments and penalties here, and what to do instead.
SSF Enrollment Avoidance
Risk Level: HIGH
Nepal's Social Security Fund (mandatory since 2020) requires 31% total contributions (20% employer + 11% employee). Many employers remain in the old gratuity-only system to avoid the higher contribution rate. SSF conducts employer registration drives with penalties for non-enrolled companies.
Festival Allowance Non-Payment
Risk Level: HIGH
The Dashain bonus (1 month salary before the Dashain festival) is mandatory under the Labour Act 2017 for all employees who have worked at least 1 year. Many foreign employers are unfamiliar with this obligation. The Department of Labour imposes back-payment orders.
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FAQ
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Ontop works with contractors, not employees. As Contractor of Record, Ontop handles contracts, compliance documents and payments for contractors in 150+ countries. To employ someone, you need a local entity or an employer of record. Ontop doesn't act as your employer of record.
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Employers pay contributions on top of gross salary. The cost table on this page shows the rates that apply here and a worked monthly example. A contractor with Ontop costs the agreed rate plus Ontop from $49 per contractor per month.
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Many countries require an extra month or an annual bonus for employees. The salaries section on this page shows the one that applies here and when it is usually paid. Contractors are paid what you agree in the contract.
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Employers withhold income tax and the employee's social security share every pay run, then pay them to the local authorities. The taxes section on this page lists the brackets, rates and filing deadlines that apply here.
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Yes. The contractor vs employee calculator compares the full cost of an employee, employer contributions included, with a contractor rate plus Ontop's monthly fee.
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When the work is project-based, you need to start fast or you don't have a local entity. If the person will work fixed hours, under your direction and only for you, local law may treat them as an employee, so hire them as one.
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Misclassifying employees as contractors, missing tax and social security deadlines, and ignoring collective agreements that set higher wage floors. The mistakes section on this page covers the ones that come up most often here.
Compare employer costs, taxes and contractor rules in nearby countries:
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.