Before your first employee starts, put the job in a written employment contract, register your business with the Social Security Fund (SSF) and enrol the employee, and pay at least the minimum wage — Rs 19,550 a month since Shrawan 1, 2082. Then run a salary sheet every month that shows basic pay, allowances, SSF and salary TDS.
Use the free income tax calculator to see the yearly tax on a salary before you make an offer.
Do I need a written employment contract?
Yes. The Labour Act, 2074 (Section 11) says no employer may employ a person without an employment contract, and the contract must set out the remuneration, the benefits, the conditions of employment and other prescribed matters. Only casual employment — work for seven days or less in a month — can be agreed without a written contract.
A signed appointment letter works if it contains these terms. Cover:
- the job title, the type of employment (regular, work-based, time-based or part-time) and the start date;
- the basic salary and each allowance shown separately — SSF, gratuity and leave pay are all worked out on basic salary;
- working hours and the weekly day off;
- leave, notice and the probation period, if any.
The Act allows a probation period of up to six months (Section 13). If the contract is not ended during probation, the employment simply continues.
What is the minimum wage in Nepal?
From Shrawan 1, 2082 (17 July 2025) the minimum remuneration is Rs 19,550 a month, published by the Ministry of Labour, Employment and Social Security in the Nepal Gazette. It applies to all sectors except tea estates, which have their own rate.
| Minimum remuneration | Basic | Dearness allowance | Total |
|---|---|---|---|
| Monthly | Rs 12,170 | Rs 7,380 | Rs 19,550 |
| Daily | Rs 470 | Rs 284 | Rs 754 |
| Hourly | Rs 63 | Rs 38 | Rs 101 |
Part-time workers get at least Rs 107 an hour. The Labour Act (Section 106) has the minimum wage reviewed every two years, so check for a new notice before each Shrawan.
How do I register with the SSF?
Under Sections 52 and 53 of the Labour Act, the provident fund and the gratuity for every employee are deposited with the Social Security Fund in the employee's name from the day they start work. In practice:
The monthly SSF contribution is 11% from the employee and 20% from the employer, both on basic salary. The rates, the tax effect and worked examples are in salary TDS and SSF for FY 2083/84. An employee who contributes to the SSF also does not pay the 1% social security tax.
What goes on a monthly salary sheet?
A salary sheet is one row per employee per month. For a first employee on Rs 25,000 (basic Rs 16,000 + allowance Rs 9,000), the columns look like this:
| Column | Example |
|---|---|
| Basic salary | Rs 16,000 |
| Allowances | Rs 9,000 |
| Gross pay | Rs 25,000 |
| Employee SSF (11% of basic) | Rs 1,760 |
| Salary TDS | from the tax calculation |
| Net pay to the bank | gross − SSF − TDS |
| Employer SSF (20% of basic, on top) | Rs 3,200 |
Keep the sheet with the bank transfer record. The Labour Act (Section 35) says the gap between salary payments may not be more than one month.
When do I deduct salary TDS?
Every month. The employer deducts tax from salary and deposits it with the Inland Revenue Department within 25 days after the month ends. How much to deduct for FY 2083/84 — including how SSF membership lowers it — is worked through in salary TDS and SSF in Nepal. If you don't have a PAN yet, see PAN number in Nepal.
How KhataIN helps
In KhataIN Business you add the employee once, then prepare each month's salary sheet; it suggests SSF and TDS and produces the bank transfer sheet. See features and pricing.
Frequently asked questions
Is an appointment letter the same as an employment contract?
It can be. The Labour Act requires an employment contract that states the remuneration, benefits and conditions of employment. An appointment letter signed by both sides that contains those terms serves the purpose; a short letter that only names the job and start date does not.
Can I pay less than the minimum wage during probation?
No. The minimum remuneration of Rs 19,550 a month (basic Rs 12,170 plus dearness allowance Rs 7,380) applies to every worker covered by the notice from the first day. Probation only changes how easily the contract can be ended, not the minimum pay.
Do I have to join the SSF for just one employee?
The Labour Act requires the provident fund and gratuity for each worker to be deposited with the Social Security Fund in that worker's name, with no minimum number of employees. Register the business with the SSF and enrol the employee when they start.
Sources
- Nepal Law Commission, Labour Act, 2017 (2074) — Sections 10–13, 35, 52, 53 and 106.
- Ministry of Labour, Employment and Social Security, minimum remuneration notice published in the Nepal Gazette on 21 July 2025 (summary by Pradhan & Associates).
- Social Security Fund, ssf.gov.np — employer and contributor registration.
Last checked: 13 November 2026 (Kartik 27, 2083). Labour rules and the minimum wage change — confirm with the Department of Labour and Occupational Safety or a labour law professional.