Employer of Record in Nepal: 14 Providers Compared (2026)

Employing someone in Nepal: key facts

Nepal’s fiscal year starts in mid-July and all amounts are in NPR. We read the Labour Act 2074 in full from the FAOLEX copy of the English text; later amendments weren’t checked, except the Social Security Fund changes reported by Pioneer Law.

Minimum wage

One national rate, revised every two years under Labour Act s.106(1).

• Daily NPR 754 (470 + 284), hourly NPR 101 (63 + 38), part-time hourly NPR 107. It replaced NPR 17,300 from the 2023-08-17 notice.
• The Pradhan table prints the allowance as NPR 7,370, which doesn’t add up to 19,550; Pioneer Law and Radio Nepal give 7,380, so we use that. We didn’t open the Gazette itself.
• The next revision is due around mid-2027; no 2026 revision found.

Employer contributions

Employers and employees contribute to the Social Security Fund (SSF) under the Contribution-Based Social Security Act 2074. Enrolment of the employer and each employee is compulsory.

• Total employer cost: 20% of basic salary. No other employer payroll tax found. Total contributions are 31%.
• Deposit. The employer deducts the employee share and deposits all of it within 25 days after month end, extended from 15 days by the Act to Amend Some Nepal Acts 2025 (Pioneer Law, checked 2026-10-27).
• Replaces Labour Act duties. Section 57 says SSF contributions replace the Labour Act’s own provident fund, gratuity, medical and accident insurance duties.
• Not confirmed. The 31% total and the 20% / 11% split come from Pioneer Law and summaries; we couldn’t open ssf.gov.np or read the Act’s section on rates. Whether “basic salary” includes the dearness allowance is also not confirmed.

Working hours and overtime

• Standard hours: 8 a day and 48 a week; half an hour of rest after 5 hours of continuous work, counted as working time (s.28).
• Overtime: up to 4 hours a day and 24 a week (s.30), paid at 1.5 times basic remuneration (s.31); managerial staff may instead receive contractual benefits.
• A worker can’t be compelled to work beyond standard hours except to avoid danger to life, safety or health, or serious loss (s.29).

Source: Labour Act, checked 2026-10-27.

Annual leave and public holidays

• Home leave: 1 day for every 20 days worked, about 18 days a year (derived), accumulating up to 90 days (s.43, s.49).
• Sick leave: 12 paid days a year, accumulating up to 45 days (s.44, s.49). Accumulated leave is paid out at the last basic remuneration on leaving.
• Public holidays: 13 paid days including May Day, and 14 for female workers (s.41). The employer or sector regulator sets the dates; we didn’t collect the Government’s 2083 calendar.
• Other leave: maternity 14 weeks, of which 60 days on full pay; care leave of 15 days paid; mourning leave 13 days paid (s.45-48).
• Leave other than sick, mourning and maternity is a facility, not a right: the employer may refuse or reschedule it for stated work reasons (s.51).

Source: Labour Act, checked 2026-10-27.

Probation

Up to 6 months by contract. The employer may end the contract if the work is unsatisfactory during probation; after it, the employment relationship is deemed valid (s.13, Labour Act, checked 2026-10-27).

Notice and severance

Notice is required from both sides, except for dismissal for misconduct (s.144). Without notice the employer pays remuneration for the notice period.

• Reason required. Termination needs “proper and sufficient reason” (s.139). Grounds in the Act include resignation, unsatisfactory performance for 3 or more consecutive years after formal evaluation, incapacity on a doctor’s recommendation, retrenchment and misconduct.
• No general severance on dismissal. On retrenchment the lump sum is one month’s basic remuneration per year of service, proportionate for part years, with 30 days’ notice to the Labour Office (s.145). It doesn’t apply to an employer with 10 or fewer workers.
• Gratuity of 8.33% of basic salary accrues in the SSF in the worker’s name and is paid out on leaving, subject to SSF rules.
• Final settlement: all dues within 15 days of termination (s.148).

Source: Labour Act, checked 2026-10-27.

13th salary and bonuses

• Festival allowance: one month’s basic remuneration a year (s.37), paid at the worker’s main festival on written request, otherwise at Dashain; proportionate under one year of service. It is mandatory, so it works as a 13th salary of basic pay.
• Annual increment: at least half a day’s basic pay after each completed year of service (s.36).

Source: Labour Act, checked 2026-10-27.

Mandatory benefits

• SSF coverage: provident fund, gratuity, medical and maternity, accident and disability, and dependent family cover.
• Outside SSF: annual medical insurance of at least NPR 100,000 per worker (premium shared) and accident insurance of at least NPR 700,000 paid by the employer (s.54-55). Section 57 removes these duties to the extent SSF contributions are made; we didn’t test whether an SSF-enrolled employer must buy them as well.

Source: Labour Act, checked 2026-10-27.

Work permits

• Who needs one: any foreign national working in Nepal needs a Department of Labour work permit (s.22-23) and a non-tourist working visa from the Department of Immigration. A Nepali citizen hired through an EOR needs neither.
• Who applies: the employer. The general route requires showing that no Nepali skilled worker is available; a direct-recording route covers up to 3 employees of enterprises with foreign investment or aid, and technicians for up to 3 months (s.24).
• Fee and time: NPR 15,000 for up to 6 months and NPR 20,000 above; valid up to 3 years, up to 5 for highly skilled; processing 30 to 45 days. These come from a law-firm guide, not the Labour Rules (Bhandari Law, checked 2026-10-27).
• Penalty: a fine of up to NPR 200,000 for employing a foreigner without a permit, plus NPR 5,000 per person per month if it continues (s.163).
• No source we read says whether a foreign employer without a Nepali entity, or an EOR, can sponsor.

Currency and payroll

• Currency: NPR. 1 USD = 154.78 NPR, the midpoint of the Nepal Rastra Bank rates published for 2026-10-12 (Sharesansar, checked 2026-10-27).
• Pay frequency: as the contract sets it; the interval between pay dates may not exceed one month (s.35). In practice monthly. A worker employed for under one month is paid within 3 days of finishing (Labour Act, checked 2026-10-27).

Is Employer of Record legal in Nepal?

Grey area. Nepal has no statute, regulator guidance or case on employer-of-record arrangements. A Nepali law firm writes that EOR “is not expressly addressed by Nepal’s Labour Act” and that legality “remains uncertain” because courts and regulators haven’t tested it. The nearest regulated model is labour supply (outsourcing) under Labour Act ss.58-67. Foreign companies can have an EOR employ staff, but control over the work, income-generating activity in Nepal and the lack of a local entity raise registration, permanent-establishment and misclassification questions (Pioneer Law, checked 2026-10-27).

• Labour supply (s.58). Employers may take labour through a supplier only for works on a list the Ministry publishes in the Nepal Gazette, and only for work other than the “core work” of the business. Pay and benefits can’t fall below the Act’s floor.
• Licence (s.59). A company that supplies labour needs a licence from the Labour Office or Department, with a deposit or bank guarantee; one company may not supply labour for more than two works or services. Pioneer Law adds that outsourcing licences are renewed annually.
• Employment disputes (s.12). The Labour Office decides whether an employment relationship exists; if the employer doesn’t produce the evidence it orders, the relationship is deemed established.
• Legal employer duties. A written contract (s.11), at least the minimum remuneration (s.106), the termination rules (s.139-148) and SSF enrolment with its contributions.
• What we didn’t find. No EOR licence, no cap on term, and no rule on an EOR for a foreign company with no Nepali entity. Pioneer Law, a law-firm opinion and not a regulator statement, says there is no risk if the work can be characterised purely as exporting services to the foreign company.

Risks for you as the client:

• Deemed employer. Where a main employer takes labour through a supplier with no licence, or contrary to the Act, the labour is deemed the main employer’s own (s.66). A person who supplies labour without a licence, and one who hires through such a supplier, face a fine of up to NPR 200,000 (s.163). Whether an EOR is a labour supplier is not settled by any source we found (Labour Act, checked 2026-10-27).
• Registration and tax. Pioneer Law says activities of EOR-hired staff that generate income for the foreign company could trigger corporate registration under the Companies Act and create a permanent establishment under the Income Tax Act.
• Control. The same piece says the foreign company’s control over work, pay and workload could lead to the arrangement being treated as non-permissible outsourcing, or to workers claiming they are directly employed by the foreign company.
• SSF default. Since 2025-07-30, non-enrolment is enforced too: bank-account and property freezes, loss of legal facilities, licence cancellation and passport freeze until the employer pays; 10% interest on arrears; and the employer pays equivalent benefits if a worker is hurt or dies during a period of non-deposit (Pioneer Law, checked 2026-10-27).

Background: Employer of Record, co-employment, permanent establishment, contractor misclassification.

Who actually employs your hire in Nepal

Most vendors describe their entity model globally. Here we separate what a vendor says about Nepal from anything we could verify. We didn’t search the Office of the Company Registrar’s register, which needs an interactive session, so no entity below is checked against a register, and no vendor gives a registration number. A vendor statement is a claim, not proof of who employs your hire.

Thirteen of these 14 providers don’t say which company employs your hire in Nepal, and the one that does names none. We couldn’t check any entity against a register. Before signing, ask: “Which Nepali company, with which registration number, will employ my hire, and will it enrol my hire with the Social Security Fund?”

How to choose an EOR in Nepal

Does your hire need a work permit? A foreigner needs a Department of Labour permit and a working visa, applied for by the employer, and no source we read says whether an EOR can sponsor. Get written confirmation that the vendor’s entity will apply. Multiplier says hires take longer if visas are needed (Multiplier, checked 2026-10-27).

How much will you direct the work? The Labour Act deems the client the employer when labour comes through an unlicensed supplier (s.66), and no source says whether an EOR counts as a supplier. Ask each vendor in writing whether it holds a labour-supply licence and whether it has a Nepali legal opinion. We found no regulator view to point to.

Is a named employer or a Nepal price the priority? Atlas says it operates its own entity but names none. Nepal-page prices are Skuad $299 (limited-time, 12-month commitment), Playroll $399, Borderless AI $579, and Remote and Deel $599 a month; Atlas’s $599 is a global price. The rest are unpublished. Statutory contributions are the same for every provider.

How fast do you need to start? Vendors claim Borderless AI 1-2 days, Multiplier 2-5 business days, Deel as little as 5 days, Remote People 1-2 weeks, Safeguard Global 1-2 weeks and Playroll 10-15 business days from a finalised offer. These are vendor claims, not tested by us; a foreign hire also needs a permit, which a law-firm guide puts at 30 to 45 days.

What it costs to employ someone in Nepal through an EOR

Statutory employer cost in Nepal is one line: the Social Security Fund (SSF) contribution of 20% of basic salary, made of provident fund 10%, gratuity 8.33% and other schemes 1.67%. The two examples use NPR 7,750,000 (about USD 50,000) and NPR 15,500,000 (about USD 100,000) a year at 1 USD = 154.78 NPR, the midpoint of the Nepal Rastra Bank rates for 2026-10-12 (Sharesansar). Employee contributions and income tax are withheld from pay and are not an extra cost for the client.

Source: Pioneer Law, Labour Act, checked 2026-10-27.

The festival allowance is on top: one month’s basic pay a year (Labour Act s.37), NPR 645,833 for the first salary and NPR 1,291,667 for the second, if the salary is all basic.

The EOR’s own fee is on top of both. Per month, five vendors show a figure on a Nepal page: Skuad $299 (limited-time, struck-out $349, 12-month commitment; its price block is ambiguous), Playroll from $399, Borderless AI $579 (from its own Nepal article) and Remote and Deel from $599 (global list prices shown on their Nepal pages). Atlas’s from $599 comes from its own “best EOR in Nepal” article. The other eight providers publish no Nepal price, and Remote People’s page shows only a market range of $300-600. Playroll’s page works an example: payroll cost NPR 120,000 plus a service fee from $399 (about NPR 45,000), about NPR 165,000 a month (Playroll, checked 2026-10-27).

Hidden costs, where published: no vendor publishes a setup fee, deposit or termination fee for Nepal, except that Borderless AI says no salary deposits are required (Borderless AI, checked 2026-10-27).

Basis: an EOR with a large payroll as the employer, no small-employer relief, a tax-resident employee; 2026 rules, NPR.

When you don’t need an EOR

• A genuinely independent contractor. Someone who serves their own clients and isn’t under your direction. See how to pay contractors in Nepal and our hiring guide. The tax side: an individual not registered as a business who is paid in foreign currency for software, electronic services or consultancy by a client outside Nepal has 5% withheld by the bank or money-transfer agent, treated as final tax under the Finance Act 2083 booklet, with no return needed on that income. No mandatory social security was found for a self-employed individual. Whether a full-time contractor on a long-term contract counts as “not engaged in business” is not settled by any source we found (Income Tax Act as amended, checked 2026-10-27). Treating a person who works like staff as a contractor is contractor misclassification.
• Your own Nepali entity. We didn’t research registration rules for a foreign company under the Companies Act or the foreign-investment laws. Playroll puts a local entity at 8-12 weeks at minimum, a vendor estimate (Playroll, checked 2026-10-27).
• PEO. Remote People says Nepal has no PEO comparable to the US model and that co-employment is not recognised; this is the vendor’s wording, not a source we checked (Remote People, checked 2026-10-27). See EOR vs PEO and PEO.

What changed in 2026

• 2026-08-07 - The Inland Revenue Department issues a public notice on FY 2026-27 income tax rates: progressive rates of 10% to 29% for individuals, as reported by Bloomberg Tax on 2026-08-12 (paywalled excerpt; we didn’t open the notice) (Bloomberg Tax).
• 2026-07-17 - Finance Act 2083 applies from 1 Shrawan 2083: one personal income tax scale for resident individuals, replacing the separate single and couple scales. NPR 0-1,000,000 at 1%, 1,000,001-1,500,000 at 10%, 1,500,001-2,500,000 at 20%, 2,500,001-4,000,000 at 27%, above 4,000,000 at 29% (top rate cut from 39%). The 1% first slab doesn’t apply to people contributing to SSF or a retirement fund. We read the slabs in the IRD information booklet, not the Act’s schedule (IRD booklet).
• 2026-07-17 - The same Act treats the foreign-currency payment for software, electronic services, consultancy or social-media content to a non-business resident individual as final withholding (5%) (IRD booklet).
• 2026-07-17 - Sweat-equity amounts received by employees of IT businesses as remuneration are not taxed, and a safe-harbour rule applies to IT-service exporters: at least 15% operating margin on operating cost, 5 income years (same booklet).
• 2026-05-29 - Budget for FY 2083/84 presented: personal exemption limit raised to NPR 1,000,000, top income tax rate cut from 39% to 29% (Sharesansar).
• 2025-07-30 - Act to Amend Some Nepal Acts 2025: SSF deposit deadline moves from 15 to 25 days after month end, enforcement extends to non-enrolment, and the employer is liable for benefits if a worker is hurt or dies during non-deposit. In force during 2026; it changes employer cash timing and risk (Pioneer Law).
• 2025-07-17 - Minimum remuneration of NPR 19,550 a month in force; it remains the rate through 2026 (Pradhan & Associates).

All checked 2026-10-27.

Numbers vendors haven’t updated

• Minimum wage. Remote, RemoFirst and Multiplier show NPR 15,000 a month; Deel shows NPR 17,300. The rate has been NPR 19,550 since 2025-07-17, which Skuad gives (Pradhan & Associates, checked 2026-10-27).
• Employer cost. Deel’s page estimates employer cost at 12.60% of salary, Multiplier’s at 22%-24%, and Remote People’s page gives employer SSF at 20%, which matches the rate we found. The 20% is from secondary sources, so the vendors’ figures may count different items (Pioneer Law, checked 2026-10-27).
• Top income tax rate. Deel and Playroll show rates up to 39%, Skuad up to 36% with 39% for very high incomes and Remote People up to 36%. Finance Act 2083 sets the top rate at 29% from 2026-07-17 (IRD booklet, checked 2026-10-27).

How we built this page

Country rules and vendor data were collected and checked on 2026-10-27, from the Labour Act 2074 text, the IRD booklet on the Finance Act 2083, law-firm summaries, the Nepal Rastra Bank rate as reported by Sharesansar, and vendor pages. Several official sites didn’t open, so SSF rates and the exchange rate rest on secondary copies. We didn’t search the Company Registrar’s register, so no entity is verified: where a vendor says it has its own entity we report it as its statement, and the rest are recorded as not disclosed. We left out eight providers whose pages didn’t confirm Nepal coverage, and Rippling, whose country list shows Nepal for contractors only. The order puts vendors that say they own an entity first, then the rest by how much Nepal-specific price and detail they publish. Nobody pays for placement on this page.