From Onboarding to Offboarding: Managing the Employee Lifecycle in Nepal via EOR

When you hire through an Employer of Record (EOR) in Nepal, the complexity of local labor laws is managed for you from day one until the final exit. By outsourcing the administrative "heavy lifting," you ensure a seamless experience for your team while remaining fully compliant with the Nepal Labor Act (2074/2017). Here is how an EOR streamlines the journey from onboarding to offboarding:

Seamless Onboarding & Legal Integration

In Nepal, onboarding isn't just about a welcome email; it’s about establishing a legal footprint for the employee.

Statutory Compliance: The EOR handles the issuance of localized employment contracts that satisfy Nepali labor standards, covering work hours, overtime, and leave entitlements.

SSF Registration: One of the most critical steps in Nepal is registering the employee with the Social Security Fund (SSF). The EOR manages the mandatory contributions (31% of basic salary—11% from the employee and 20% from the employer) from the first month.

Tax Setup: They ensure the employee is registered for a Permanent Account Number (PAN), allowing for accurate Tax Deducted at Source (TDS) right from the start.

Ongoing Lifecycle Management & Payroll

Once the employee is settled, the EOR acts as the "legal employer," managing all monthly recurring tasks that often trip up foreign companies.

Compliant Payroll: Calculating the "Festival Bonus" (essentially a 13th-month salary given during Dashain) and managing various leave types—such as Sick Leave, Home Leave, and Mourning Leave—requires precision. The EOR automates this.

Benefits Administration: Beyond the SSF, the EOR manages mandatory insurance (Medical and Accidental) as required by the Labor Act.

Policy Updates: As Nepali labor regulations or tax brackets shift, the EOR updates the employee’s terms automatically, so you never have to worry about "unexpected" legal changes.

Professional Offboarding & Final Settlement

Exits in Nepal are strictly regulated. Mismanaging a resignation or termination can lead to labor court disputes.

Notice Period Management: The EOR ensures that notice periods are observed according to the specific terms of the contract and the Labor Act, preventing "breach of contract" issues.

Gratuity and Final Dues: They calculate the final settlement, including any accrued leave encashment and gratuity payments. In Nepal, failing to pay these within the legal timeframe can result in hefty interest penalties.

Exit Formalities: The EOR handles the de-registration from the SSF and provides the necessary experience certificates or clearance documents, ensuring a clean break that protects your brand’s reputation in the local market.

Why this matters for your business

By using an EOR for this full lifecycle, you eliminate the need to understand the granular details of Department of Labor filings or Inland Revenue Department (IRD) updates. You focus on the work; the EOR focuses on the person.

From Onboarding to Offboarding: Managing the Employee Lifecycle in Nepal via EOR

Need help with EOR in Nepal?

Recommended for you

Beyond Compliance: Using EOR as a Growth Engine in Nepal

Unlock Your Business Potential in Nepal with EOR Services