Guide to employment, payroll and benefits in


Rivermate offers complete payroll, benefits and compliance services for


01. Overview

Last updated: 

August 19, 2021

Nepalese Rupee
Ease of doing business
GDP growth

02. Grow your team in


with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in


, particularly if you don't have established local relationships. You can hire employees in


effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Nepal is a landlocked nation in South Asia, officially known as the Federal Democratic Republic of Nepal. It is mostly in the Himalayas, but it also includes parts of the Indo-Gangetic Plain, bordering China's Tibet to the north and India's south, east, and west, with the Siliguri Corridor separating it from Bangladesh and Bhutan, and the Indian state of Sikkim separating it from Bhutan. Nepal's landscape is complex, with rich plains, subalpine forested hills, and eight of the world's ten tallest mountains, including Mount Everest, the world's highest peak. Nepal is a multiethnic country where Nepali is the official language. Kathmandu is the capital and largest city of Nepal. The word "Nepal" first appears in texts from the Indian subcontinent's Vedic era, the period in ancient Nepal when Hinduism, the country's predominant religion, was established. Gautama Buddha, the founder of Buddhism, was born in Lumbini, Nepal, in the middle of the first millennium BC. Parts of northern Nepal were influenced by Tibetan culture. The Indo-Aryan culture is intertwined with Kathmandu Valley's culture, and it was the seat of the prosperous Newar confederacy known as Nepal Mandala. The valley's traders occupied the Himalayan branch of the ancient Silk Road. Traditional art and architecture established in the cosmopolitan city. The Gorkha Kingdom was responsible for the unification of Nepal by the 18th century. The Shah dynasty established the Kingdom of Nepal, which later formed an alliance with the British Empire, which was led by the Rana dynasty. It was never colonized and instead acted as a buffer between Imperial China and British India. Parliamentary democracy was established in 1951, but Nepalese monarchs suspended it twice, in 1960 and 2005. The civil war in Nepal in the 1990s and early 2000s culminated in the creation of a secular republic in 2008, putting an end to the world's last Hindu monarchy. Nepal's Constitution, adopted in 2015, establishes the country as a democratic federal parliamentary republic with seven provinces. It is also the world's only multi-party, completely democratic country governed by a communist party. Nepal was admitted to the United Nations in 1955, and friendship treaties with India and China were concluded in 1950 and 1960, respectively. The permanent secretariat of the SAARC, of which Nepal is a founding member, is located in Nepal. Nepal is also a member of the Bay of Bengal Initiative and the Non-Aligned Movement. The Nepalese Armed Forces are the fifth-largest in South Asia, and are known for their Gurkha heritage, especially during World War II. They have also been a major contributor to UN peacekeeping operations.

04. Public holidays

05. Types of leave

Paid time off

For every 20 days worked, employees are given one day of paid yearly leave.

Public holidays

Democracy DayMaha ShivaratriHoli HolidayNepali New YearInternational Workers DayRakshya BandhanTeej HolidayDashain holidaysTihar FestivalOptional holidays:Nari DibasRamjan Edul FikraEdyul AajahaJitiyaChristmas Day

Sick days

After a year of employment, employees are entitled to 12 days of fully paid sick leave and 13 days of bereavement leave. Employees are permitted to accrue up to 45 days of sick leave. At the end of each year, employers must compensate employees for any unused sick leave that exceeds 45 days. When an employee leaves the company, the employer must pay any accrued or accumulated sick leave that is not used.

Maternity leave

Employees who give birth to a child are entitled to 60 days of paid maternity leave. Female employees can also take an additional 38 days of unpaid maternity leave.

Paternity leave

Male employees are entitled to 15 days of paid paternity leave.

Parental leave

Apart from maternity and paternity leave, there are no other provisions in the law of Nepal regarding parental leave.

Other leave

06. Employment termination

Termination process

An employment contract may be terminated by either party at the conclusion of the contract period (if it is for a defined time), upon completion of the job (if it is performance-based), or by both parties. Employers must have a legitimate reason for terminating employment.

According to the law, an employer may terminate an employee for unsatisfactory performance. However, the employer should give the employee at least seven days to present an explanation.

Employers may terminate employment based on ill health if the employee has been deemed disabled by a medical practitioner. However, if the worker sustains an injury on the job and is getting treatment, the employment cannot be terminated for a period of one year. Unless verified by a medical practitioner, the employment of a worker undergoing treatment cannot be terminated until six months have passed.

An employee may freely resign by submitting a written resignation letter. Within 15 days, the employer must approve the resignation. If the employer does not accept the resignation within 15 days, it is presumed to be accepted. The resignation may be revoked by mutual consent or if the employee continues to work after the last day of employment.

Except for dismissals for misbehavior, both employers and employees are obligated to offer notice of termination or resignation. The notice period is proportional to the length of service.

Notice period

While dismissal does not require employer notification, any other type of termination does, depending on the employment term. Employees who have worked less than four weeks, for example, require one day's notice. They require seven days for employment lasting four weeks to a year, and thirty days for employment lasting more than a year.

Severance pay

If an employee is not eligible for unemployment benefits under the Social Security Act, they receive severance pay equal to one month's salary for each year of service.

Probation period

Nepalese labor laws provide for a probation period of up to a year.

07. Working hours


In Nepal, the standard workweek is 48 hours, or eight hours per day for six days. After five hours of work, employees are entitled to a half hour of rest.

Employers must provide transportation to and from work for female employees working between sunset and sunrise.


Overtime should not exceed four additional hours per day and twenty-four additional hours per week. Overtime pay is 1.5 times the regular rate of pay.

08. Minimum wage


The minimum wage in Nepal is NPR 13,450 a month.

09. Employee benefits


A minimum of NPR 100,000 is required for health insurance, with both the employee and the employer contributing 50%. Accident insurance is also required by Nepalese labor regulations in the event of an injury on the job. This should be a minimum of NPR 700,000, and it should be fully covered by the employer.

If an employee dies on the job, the accident insurance proceeds to the worker's next of kin.

Religion is very important in Nepalese culture. Employers are obliged to provide a festival allowance of one month's salary to all workers in order for them to celebrate different religious holidays.

Employees may also cash in their accumulated leave when they leave the company. They are permitted to take up to 90 days of personal leave and 45 days of sick leave.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in


to hire a team takes time, money, and effort. The labor law in


has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into


simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in


give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in


via our Employer of Record / PEO solution.

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