Employer cost calculator Nepal 2026

Enter the basic pay and allowances you agree with a worker, and the calculator adds the contributions the law puts on the employer.

That gives the monthly and yearly cost of the post, which is higher than the salary on the offer letter. With the Fund, the employer adds 20% of basic pay.

How it's calculated

For workers in the Social Security Fund, the employer pays 20% of basic pay on top of the pay. This covers the provident fund match, gratuity and part of the social security schemes.
Outside the Fund, the Labour Act, 2074 still requires the provident fund match of 10% and gratuity of 8.33% of basic pay, so the employer sets aside both directly.
The employer also owes a festival allowance equal to 1 month of basic pay each year. The calculator spreads it over twelve months.

An example

Basic pay of NPR 40,000 and allowances of NPR 10,000 cost NPR 61,333.33 a month with the Fund: NPR 8,000 of contributions plus NPR 3,333.33 of festival allowance.

Frequently asked questions

How much does an employer pay to the Social Security Fund?

Twenty percent of the worker's basic pay, added to the 11% deducted from the worker, according to the Fund's operation procedure.

Are allowances included in the contribution?

No. The Fund and the Labour Act work on basic pay, so allowances raise the cost only by the amount paid.

Does the calculator include health and accident insurance?

No. Section 54 and 55 of the Labour Act also require medical and accident insurance for each worker, and the premium is not counted here.

Key terms

Employer contribution: What the employer pays on top of pay for the worker's retirement and social security.
Festival allowance: One month of basic pay paid once a year.