Gratuity Calculator (Nepal, 2026)
In Nepal the employer sets aside 8.33% of each worker's basic remuneration every month as gratuity and deposits it in the worker's account at the Social Security Fund (Labour Act 2074, section 53). Over a year that equals one month's basic pay, so gratuity ≈ monthly basic pay × years of service, counted from the first day of work.
· Calculated with AiStaffo
The rules in Nepal
| Law | Labour Act, 2074 (2017), section 53; Social Security Act, 2075 (2018) |
|---|---|
| Rate | 8.33% of basic remuneration every month (8.33% × 12 = one month's basic pay a year) |
| Wage used | Basic remuneration only (allowances excluded) |
| From when | From the first day of work; no minimum service period |
| Where it goes | Deposited every month in the worker's name at the Social Security Fund |
| If it cannot be deposited | The employer pays the worker an extra 8.33% of basic remuneration instead |
| Older gratuity balances | Gratuity held under earlier laws or by the employer is to be moved to the Social Security Fund |
Worked example
Basic remuneration NPR 40,000 a month, 3 years and 6 months of service.
40,000 × 8.33% ≈ NPR 3,332 a month. Over 3.5 years that is about 40,000 × 3.5 = NPR 140,000 of gratuity contributions, before any return the Fund adds.
How it is paid out
Gratuity is no longer a lump sum the employer pays at the end. It builds up month by month in the worker's Social Security Fund account, together with provident fund contributions. When and how the balance is paid out (lump sum or as part of old-age protection) follows the Fund's own scheme rules, so check your SSF statement for the exact balance.
For employers: gratuity is one line of what a role costs
Gratuity, leave, statutory contributions and notice periods all sit on top of salary. Routine back-office roles such as data entry, follow-ups, reconciliations and reporting can be handed to AI workers that carry none of these costs. Book a free automation audit and we will put your own figures on it.
Please note: this calculator follows the published law and common practice as checked on 21 October 2026. It is a guide, not legal advice. Contracts can give more than the legal minimum, and special cases (part-time work, free zones, disputes) can change the figure, so confirm the final amount with your HR team or a lawyer before paying or accepting a settlement.
Questions people ask
How is gratuity calculated in Nepal?
Is there a minimum service period for gratuity in Nepal?
Is gratuity calculated on basic or gross salary?
Where is my gratuity deposited?
What if my employer is not enrolled in the Social Security Fund?
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