SSF in Nepal: How the 31% Contribution Works (Employer Guide for 2083/84)

How Nepal's Social Security Fund contribution works: 11% employee + 20% employer = 31% of basic salary, what it replaces, the tax benefit, monthly deadlines and common mistakes.

This guide is for employers in Nepal registered with, or joining, the Social Security Fund (सामाजिक सुरक्षा कोष) under the Contribution Based Social Security Act 2074.

SSF is the part of payroll Nepali employers ask about most: what to deduct, what the company pays, by when, and how it changes tax. Here's the short version.

The 31% split

Contributions are calculated on basic salary, not gross salary.

Example: an employee's basic salary is Rs 40,000.

• Employee share: Rs 4,400, deducted from their pay
• Employer share: Rs 8,000, paid by the company
• Deposited to SSF: Rs 12,400 for the month

What the employer's 20% replaces

For employers that join SSF, the employer contribution is generally treated as replacing the separate provident fund (10%) and gratuity (8.33%) contributions that used to be paid outside SSF. Check your employment contracts and any older PF or gratuity balances with your accountant when you switch.

The tax benefit

1. No 1% social security tax. SSF contributors are exempt from the first (1%) tax band. Under the FY 2083/84 slabs that band covers the first Rs 10 lakh of income, so many employees pay noticeably less tax. See the FY 2083/84 slab guide.
2. Contributions reduce taxable income. The full 31% counts as a retirement contribution and is deductible, together with any CIT or PF, up to the lower of Rs 5 lakh a year or one-third of income.

The employer's 20% is first added to the employee's income and then deducted. Payroll that forgets the first step under-reports income, and payroll that forgets the second over-deducts TDS.

Monthly steps for the employer

1. Register the company with SSF and enrol each employee. Each employee gets an SSF number.
2. Run payroll: deduct 11% of basic from each enrolled employee.
3. Deposit 31% of basic for every enrolled employee through the SSF system.
4. Do it on time. The commonly cited deadline is within 15 days after the end of each month. Some recent sources mention a longer window, so check the current SSF guidance.
5. Keep records of the deposit receipt per month and per employee.

Common mistakes

• Calculating on gross pay instead of basic. This over-deducts from employees.
• Still charging enrolled employees the 1% social security tax. It's waived for SSF contributors.
• Leaving the employer's 20% out of taxable income before deducting it. TDS ends up wrong.
• Missing employees' SSF numbers. Deposits can't be matched to the right person.
• Not prorating for joiners and leavers. SSF follows the basic salary actually paid for the month.
• Mixing up deadlines. SSF is due within about 15 days; salary TDS is due within 25 days. They're separate deposits. See the TDS guide.

How TeamKro handles SSF

TeamKro calculates the 11% and 20% on basic for every enrolled employee, removes the 1% social security tax for them, and includes the contributions correctly in the year's TDS. Its compliance calendar shows each month's SSF, TDS and CIT deposit with its due date in both BS and AD, and flags employees with no SSF number before the deposit is due. Book a demo.

FAQ

Is SSF mandatory?
The Contribution Based Social Security Act 2074 requires employers to register and contribute for their workers. Enforcement and timelines have changed over the years, so confirm the current position for your sector with SSF.

Is SSF calculated on basic or gross salary?
On basic salary.

Can an employee in SSF also contribute to CIT?
Yes. The combined retirement deduction for tax is capped at the lower of Rs 5 lakh or one-third of income.

Last checked 31 October 2026. Rates and deadlines come from the Contribution Based Social Security Act 2074 and current SSF guidance; confirm with the Social Security Fund (ssf.gov.np) or your accountant. General information, not legal or tax advice.

Sources: Social Security Fund Nepal · Pioneer Law: Social security system in Nepal · Lockton: Nepal mandatory social security contribution