How are employee and employer contributions calculated?
Short answer:
31% of the basic salary is deposited into SSF — 11% is deducted from the worker's salary (Provident Fund 10% + Social Security Tax 1%) and the employer adds 20% (Provident Fund 10% + Gratuity 8.33% + other 1.67%). Allowances, bonuses, and overtime are not subject to contribution.
✨ Highlights
- ✔31% = worker 11% (PF 10% + social security tax 1%) + employer 20%.
- ✔The worker's real new burden is only 1% — 10% already went to the PF.
- ✔No contribution on allowances, bonus, or overtime — only basic salary.
- ✔Example: Rs. 30,000 salary → Rs. 9,300 monthly contribution.
Table of contents
- How does the 31% add up?
- Example: basic salary Rs. 30,000
- Deposit deadline and late penalty
How does the 31% add up?
| Source | Rate | Breakdown |
|---|---|---|
| From the worker (deducted) | 11% | Provident Fund 10% + Social Security Tax 1% |
| From the employer (added) | 20% | Provident Fund 10% + Gratuity 8.33% + other 1.67% |
| Total | 31% | of the basic salary |
💡 Of the worker's 11%, 10% was already going to the Provident Fund before SSF — the only new burden is 1%. The employer's 20% is not deducted from the salary.
[Example]Example: basic salary Rs. 30,000
| Item | Calculation | Amount (Rs.) |
|---|---|---|
| Worker's contribution (11%) | 30,000 × 0.11 | 3,300 |
| Employer's contribution (20%) | 30,000 × 0.20 | 6,000 |
| Total monthly contribution | 30,000 × 0.31 | 9,300 |
| Annual total | 9,300 × 12 | 111,600 |
The worker's take-home salary decreases by Rs. 3,300; the Rs. 6,000 is added by the employer on top of the salary. All of it ultimately comes back to the worker as benefits and savings.
[Caution]Deposit deadline and late penalty
- Contributions must be deposited within 25 days of the end of each Nepali month (Act section 4, 2082 amendment)
- If late, 10% interest applies on the outstanding amount
- The basic salary cannot be lower than the government-set minimum wage
📺 Related videos
Related FAQs
📜 Official sources
- सामाजिक सुरक्षा योजना सञ्चालन कार्यविधि, २०७५ (५औँ संशोधनसहित) (मूल २०७५।०८।०६; ५औँ संशोधन २०८१।०९।१०, लागू २०८२।०१।०१)
- श्रम ऐन, २०७४ (२०७४।०५।१९)
- योगदानमा आधारित सामाजिक सुरक्षा ऐन, २०७४ (२०७४।०४।२९ (संशोधन २०७५, २०८२))
For legal purposes always consult the original documents and latest amendments. Rates and limits can change through amendments.
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