Running a business in Nepal means staying on top of several HR and labour law obligations. Whether you are just setting up or auditing your existing HR, this checklist covers what you need to have in place.
1. Employment Contracts and Documentation
- ✓ Every employee has a signed employment contract
- ✓ Appointment letters issued to all staff
- ✓ Employment type correctly classified (regular, part-time, casual, work-based, time-based)
- ✓ Probation period terms clearly documented
- ✓ Employee personal files maintained with updated records
2. Payroll and Tax Compliance
- ✓ Monthly salaries processed on time
- ✓ TDS calculated correctly and deposited to IRD
- ✓ Payslips generated and distributed each month
- ✓ Annual tax reconciliation completed
3. Social Security Fund (SSF)
- ✓ Employer registered with SSF
- ✓ All eligible employees enrolled in SSF
- ✓ Monthly contributions calculated on correct contribution base
- ✓ Contributions deposited within 25 days after month-end
- ✓ SSF records reconciled regularly
4. Leave Management
- ✓ Home leave policy in place (1 day per 20 days worked)
- ✓ Sick leave tracked (12 days per year)
- ✓ Maternity leave policy documented (14 weeks, 60 days paid)
- ✓ Paternity leave policy in place (15 days paid)
- ✓ Leave records maintained per employee
5. Working Hours and Overtime
- ✓ Working hours capped at 8 hours/day and 48 hours/week
- ✓ Overtime tracked and approved formally
- ✓ Overtime paid at 1.5x basic remuneration
- ✓ Attendance records maintained
6. Internal Committees (Headcount-Based)
- ✓ Labour Relation Committee formed (required at 10+ employees)
- ✓ Safety and Health Committee formed (required at 20+ employees)
- ✓ Committee meetings held and documented
7. Grievance and Dispute Process
- ✓ Written grievance procedure published and accessible to employees
- ✓ Response timeline defined (15 days per Labour Act expectation)
- ✓ Grievance cases logged and tracked
8. HR Policies and Handbook
- ✓ Employee handbook or bye-laws drafted
- ✓ Working hour, leave, and overtime policies localized to Nepal law
- ✓ Handbook registered with the relevant Office if required
- ✓ Policies communicated to all employees
9. Foreign Employees (If Applicable)
- ✓ Work permits obtained before employment starts
- ✓ Nepali citizen advertisement requirement fulfilled prior to foreign hire
- ✓ Work permit renewals tracked
10. Outsourcing and Labour Suppliers (If Applicable)
- ✓ Labour suppliers verified as licensed
- ✓ Supplier worker counts included in headcount thresholds
- ✓ Main employer obligations documented and monitored
Not Sure Where You Stand?
An HR compliance audit can identify gaps before they become disputes, penalties, or audit findings.
If you are setting up HR from scratch, start with the basics first.
Frequently Asked Questions
What happens if a business is not SSF compliant in Nepal? Late or missing SSF contributions attract interest charges and can lead to enforcement actions including asset freezes. Enrolling employees and depositing contributions on time is one of the most important compliance obligations for employers in Nepal.
Is an employment contract mandatory in Nepal? Yes. Nepal’s Labour Act prohibits employing a person without an employment contract, with only narrow exceptions for casual employment. Contracts must include remuneration, benefits, role scope, and probation terms at minimum.
When does a business need a Labour Relation Committee? Any enterprise with 10 or more employees is required to form a Labour Relation Committee. Its primary role is to handle grievances and improve the working environment.
Do small businesses need to follow the same HR compliance rules? Most Labour Act obligations apply regardless of company size, though some — like internal committees — are triggered at specific headcount thresholds. Small businesses are still required to have contracts, process payroll correctly, and enroll employees in SSF.
Can I outsource HR compliance management in Nepal? Yes. Many businesses outsource payroll, SSF management, documentation, and HR advisory to avoid managing compliance internally.