Building HR in Nepal: A 20-Person Kathmandu Startup Playbook

60-Second Summary

At 20 employees in Nepal, you've crossed the SSF threshold (10+) and probably the harassment-committee threshold (any employees). Your compliance load is no longer optional.
The 90-day priority order: (1) entity + bank + tax registration if not done, (2) written employment contracts in Nepali, (3) SSF registration and monthly contributions, (4) payroll with proper Basic/DA split + TDS, (5) ICC formation under harassment law, (6) leave tracking + Dashain budget, (7) handbook + onboarding, (8) annual filings calendar.
Most Kathmandu startups skip the Internal Complaints Committee (ICC) and bilingual employment contracts. Both are visible, low-effort wins that materially reduce risk.
Budget approximately NPR 1,500–2,500 per employee per month for fully-loaded compliance overhead (SSF + payroll software + insurance + retainer for accountant/lawyer + festival bonus accrual).

You've hit 20 employees in Kathmandu. The founder-led 'we figure it out' phase has expired. The Labour Office, the Social Security Fund, and the Inland Revenue Department all have you on file (or should). This is the 90-day plan for getting HR right from where you are — not a textbook, not a fantasy compliance stack, but the realistic operating system for a 20-person Nepal startup.

The 90-day plan

Days 0–90 priority order

1
Days 0–14 — Foundation audit
Confirm entity registration, PAN/VAT, bank account, current employment contract status. Pull list of every person being paid; classify each as regular / time-bound / consultant. Identify the gap between fiction (your org chart) and fact (Labour Office records).
2
Days 15–30 — Contracts and SSF
Issue bilingual employment contracts to every regular employee. Register with SSF and begin monthly contributions. Set up payroll with proper Basic/DA split and TDS withholding.
3
Days 31–45 — ICC and policy floor
Form Internal Complaints Committee under the Sexual Harassment Act. Display harassment policy in office. Conduct first ICC training session.
4
Days 46–60 — Leave + handbook
Build a leave-tracking spreadsheet or adopt a tool. Calculate Dashain bonus liability. Write a one-page employee handbook covering hours, leave, salary structure, code of conduct, and grievance route.
5
Days 61–75 — Onboarding standardization
Build a 14-day onboarding checklist; assign onboarding buddy per new hire. Standardize offer letter template.
6
Days 76–90 — Cadence and calendar
Set the annual-filings calendar: SSF returns monthly, TDS monthly, harassment annual report (June/July), Dashain bonus (pre-Dashain), labour office return annual. Document the cadence in a shared place that survives your departure.

Entity, bank, and tax basics

Most Kathmandu startups are registered as Private Limited Companies (Pvt. Ltd.) with the Office of Company Registrar. Minimum 1 director, 1 shareholder. Annual return + audit required regardless of size. PAN (income tax) and, if registered for VAT (revenue >NPR 5m/year), VAT registration with Inland Revenue. Bank account in the company's name; no co-mingling with founder personal accounts.

Foreign-funded startups have additional considerations: Department of Industry (DOI) approval for foreign investment, Nepal Rastra Bank (NRB) approval for capital inflows, and DOI-issued visas/work permits if any expat staff. These complicate payroll if equity flows back to founders abroad — covered in detail in the 'remitting equity' article.

Employment contracts that work

Bilingual: Nepali (Devanagari) controlling, English for reference. A pure-English contract is risky in any dispute.
Includes: job title, reporting line, place of work, working hours, salary components (Basic + DA + allowances), benefits (PF/SSF, festival bonus, leave), probation period, notice period, confidentiality, IP assignment, governing law (Nepal).
Signed by both parties; one copy retained by each. Witnessed if possible.
Avoid: vague 'as per company policy' clauses with no policy attached; non-compete restrictions wider than Nepal law allows (Nepal's enforcement of post-employment non-competes is limited); arbitration clauses requiring foreign-seat arbitration (often unenforceable for local employees).
Update: when an employee is promoted, when salary structure changes materially, when benefits change. Don't run on a stale contract from 3 years ago.

SSF registration and monthly payroll

Once you have 10+ employees, SSF registration is mandatory. Register the employer at ssf.gov.np, enroll each employee with their citizenship/national ID, contribute monthly (typically by the 25th of the following month). Late contributions accrue interest at 10% p.a. and can trigger inspections.

Practical setup: most 20-person startups use a payroll vendor (Khalti for HR, PayrollNepal, Pesa.io, or a local accountant running it manually). The vendor handles SSF, TDS, and payslip generation; you provide the monthly inputs (joins, leavers, salary changes, leave adjustments). Budget NPR 200–500 per employee per month for payroll service.

Harassment policy and ICC

The Sexual Harassment at Workplace (Prevention) Act 2071 (2015) requires every workplace to have a written policy, an Internal Complaints Committee (ICC), and annual training. Most Kathmandu startups skip the ICC. It's a visible, low-effort win.

ICC formation in 7 days

1
Day 1–2 — Draft policy
1–2 page policy: definition of harassment, who can complain, how to complain, ICC member names, 45-day timeline, anti-retaliation. Get a Nepal-licensed lawyer to review (NPR 5–15k for a small startup).
2
Day 3–4 — Select ICC members
Senior woman as chair, 1–2 employee members, ideally an external member (NGO representative or lawyer). Communicate appointments in writing.
3
Day 5–6 — Display and announce
Print and display policy + ICC member list in the office (Nepali + English). Email to all employees. Add to onboarding.
4
Day 7 — First training
30-minute session for all employees on what the policy covers, how to raise a concern. Document attendance.

Leave system and Dashain bonus

Even at 20 people, paper or spreadsheet leave tracking starts to fail. Most startups adopt a simple HR tool (BambooHR, Zoho People, Khalti for HR, or a homegrown Google Sheets template). Track at minimum: annual leave balance, sick leave used, festival leave, maternity/paternity. Reset annual balances on Nepali fiscal year (mid-July) or January 1 — pick one and stick.

Dashain bonus (one month basic salary, paid before Dashain — typically September/October) is the most-protected employee expectation in Nepal. Budget it monthly (set aside 1/12th of monthly basic as a Dashain reserve) rather than as a lump in September. Non-payment is a #1 reason employees go to the Labour Office.

Handbook and onboarding

Your handbook does not need to be 80 pages. A 5–10 page handbook covering: company overview, working hours, leave policy, salary structure, benefits, code of conduct, harassment policy, grievance escalation, IT/security policy, and termination process. Bilingual. Acknowledged by signature at onboarding.

Onboarding checklist for 14 days: contract signed, ID/PAN/citizenship collected, SSF enrollment initiated, bank account verified for payroll, IT/email access provisioned, harassment policy reviewed, buddy assigned, first-week 1:1 with manager, 30-day check-in scheduled.

Annual filings cadence

Filing	Frequency	Due date
SSF monthly contribution	Monthly	By 25th of following month
TDS deposit (income tax withheld)	Monthly	By 25th of following month (Nepali calendar)
TDS annual return	Annual	End of Shrawan (mid-August)
Income tax return (company)	Annual	End of Mangsir (mid-December) for self-assessment; with audit if required
VAT return (if registered)	Monthly	By 25th of following month
Harassment committee annual report	Annual	Per local Labour Office requirement; typically by mid-July
Labour office annual return	Annual	Within 1 month after Nepali fiscal year-end
Audit + ROC annual filing	Annual	Within 6 months of fiscal year-end

Tooling on a Nepal budget

You don't need Workday at 20 people. A reasonable stack:

Payroll: local vendor (PayrollNepal, Khalti for HR) — NPR 200–500/employee/month
Leave + people data: BambooHR free tier, Zoho People, or Google Sheets — $0–$5/employee/month
Document storage: Google Workspace — $6–18/user/month
Accountant retainer: NPR 15–40k/month for monthly compliance work
Lawyer retainer or per-issue counsel: NPR 30–80k for handbook + contract templates upfront; ad-hoc thereafter
Total stack cost: NPR 25–50k/month for a 20-person company, plus per-employee variable

FAQ

Frequently asked questions

Can we hire fully-remote employees in cities outside Kathmandu?

Yes — Nepal labour law applies regardless of physical location. SSF, contracts, and other obligations are the same. Verify if the employee's location triggers any city-specific tax (Kathmandu Metropolitan and a few other municipalities have local taxes that may affect employer obligations).

How do we handle equity for Nepalese employees?

Operationally complex due to NRB foreign exchange rules. See the dedicated 'Remitting equity to South Asian employees' article in this series.

What about hiring expats?

Requires DOI work permit + Department of Immigration work visa. Process takes 6–10 weeks. Usually only justifiable for specialized roles with no local supply.

When do we need to hire a first dedicated HR person?

Typically 25–35 employees. Below that, founder + a part-time HR consultant + payroll vendor can manage. Above that, the compliance + people-experience load justifies a generalist.

Building HR for a 20-person Kathmandu startup