Employment Law

Nepal Employment Contract

Employers in Nepal should always provide each employee with a written employment contract. The employment contract should contain any important details such as working hours, rights, wages, etc. They should also be written in Nepali and use the local currency Nepali rupee.

Fixed Term

Indefinite

Working Hours in Nepal

The standard working week in Nepal is six days and 48 hours, with Saturday usually being a day off. Overtime pay is generally 1.5 times the normal wage, and workers must not work more than 24 hours of overtime per week.

Nepal Vacation

Employees in Nepal are entitled to one day of paid leave for every 20 days of work completed. In addition, employees can take up to 13 days of bereavement leave due to the death of a loved one.

Holiday Policy

Sick Leave in Nepal

Nepali employees are entitled to up to 15 days of paid sick leave per year upon providing a medical certificate.

Maternity and Paternity Leave in Nepal

Female employees in Nepal are entitled to 98 days of paid maternity leave. Of these, 60 days are full salary compensation. Male employees are entitled to up to 15 days of paid paternity leave.

Employee Severance Pay and Termination of Contract in Nepal

In Nepal, the notice period for dismissal of an employee is usually 30 days as long as the worker has been with the employer for more than one year. Additionally, severance pay of one month's regular salary is common.

The trial period is six months.

Taxes in Nepal

In Nepal, both employers and employees are required to contribute 10% of their wages to the country’s Provident Fund.

Income tax in Nepal is progressive, with rates ranging from 1% to 36% applicable depending on income level.

The corporate tax rate for most companies in Nepal is 25%.

Health Insurance in Nepal

Nepal has state-funded public healthcare, so employers are not required to provide private health insurance. However, some may choose to do so, especially for employees in senior positions.

Salary and Benefits

Compensation Law in Nepal

As of 2019, the legal minimum wage in Nepal is Rs 13,450 per month.

Welfare Management in Nepal

As a foreign company, organizing the Nepali benefits system for your employees can be a long and difficult process. You should be prepared to spend a lot of time setting up the system and keeping it compliant, which may cause delays in the hiring process.

Remoly can help you significantly simplify this step of your Nepal expansion by providing benefits administration outsourcing. Our team can advise you and handle the set-up of your benefits plan, allowing you to focus on expanding your organization in Nepal.