How to Calculate SSF Contribution in Nepal (With a Worked Example)

SSF contribution is calculated on basic salary, not gross salary — that one distinction is where most manual SSF calculations go wrong. Here's the exact method, worked through on a real number.

The formula

SSF contribution = Basic salary × 31%, split as:

• Employee: 11% — 10% pension fund + 1% social security tax, deducted from the employee's basic salary
• Employer: 20% — 10% pension fund + 8.33% gratuity + 1.67% additional contribution, paid by the business on top of salary

Worked example

Take an employee with a basic salary of NPR 40,000/month:

• Employee contribution: NPR 40,000 × 11% = NPR 4,400, deducted from the employee's pay
• Employer contribution: NPR 40,000 × 20% = NPR 8,000, paid by the employer separately
• Total deposited to the employee's SSF account: NPR 4,400 + NPR 8,000 = NPR 12,400/month

The employee sees NPR 4,400 deducted on their payslip; the NPR 8,000 employer share never touches their gross pay, but it is real cost to the business and needs to be budgeted as such.

Common calculation mistakes

• Using gross salary instead of basic salary — SSF is calculated on basic pay only, not allowances or gross
• Forgetting the employer share is a real cost — 20% on top of basic salary should be part of true cost-to-company, not treated as a pass-through
• Filing employee and employer portions separately — both go in together on the same monthly SSF filing

Why this is worth automating

Once basic salary is set correctly in the system, the 11%/20% split, the monthly filing figures, and the running contribution history calculate themselves on every payroll cycle — no separate spreadsheet formula to maintain per employee. This is the exact calculation Hajir Khata runs automatically on every payroll run.

Contribution rates and filing rules are set by the Social Security Fund and can be updated by the government — always confirm current rates against the latest SSF notice before relying on any figure for compliance purposes.