Nepal Labour Law: Leave, Notice Period & Termination

Short answer

What is the notice period in Nepal?

Under Labour Act 2074 s.144: at least one day's notice for employment up to four weeks, at least seven days from four weeks to one year, and at least thirty days beyond one year. An employer terminating without notice must pay remuneration for the notice period instead.

60-Second Summary

Probation is capped at six months (s.13). If you do not end the contract inside it, employment becomes ipso facto valid.
Hours: 8 a day, 48 a week, half an hour of rest after five continuous hours (s.28). Overtime is 1.5× basic (s.31).
Notice on termination (s.144): 1 day up to four weeks' service, 7 days from four weeks to one year, 30 days beyond one year — or pay in lieu.
Leave: weekly one day a month (s.40), public 13 days and 14 for female employees (s.41), home leave 1 day per 20 worked (s.43), sick 12 days a year (s.44), maternity 14 weeks with 60 days fully paid (s.45), mourning 13 days (s.48).
Retrenchment requires at least 30 days' notice stating the reason (s.145) — it is a defined procedure, not an at-will layoff.

Notice is where foreign employers get caught first, because Nepal is not an at-will jurisdiction and there is no lawful route that swaps process for a cheque. The rest of this page sets out probation limits, working hours, every statutory leave entitlement with its accrual rule, the retrenchment procedure, and the work-permit gate for foreign nationals — each with the section number attached so you can verify it rather than take my word for it.

Not legal advice

Section references are to the Labour Act 2074 as reproduced by the Nepal Law Commission and FAO/ILO NATLEX. Rules 2075 and sector-specific regulators add detail, and collective agreements can improve on the statutory floor. Engage Nepali counsel for any live decision.

Contract and probation

Probation may run for a maximum of six months, and the employer may end the contract inside it for unsatisfactory work (s.13).
If the contract is not terminated during probation, the employment relationship is ipso facto valid at the end of it. There is no automatic second probation.
Apprentices engaged under an agreement with an educational institution and an approved curriculum are not treated as labour under the Act (s.16) — but employ them outside that curriculum and they are deemed regular employees.
A change or transfer of ownership does not break continuity of employment (s.14). Acquirers inherit service history, and with it leave balances and gratuity accrual.

Hours and overtime

Item	Rule	Section
Daily hours	Maximum 8	s.28(1)
Weekly hours	Maximum 48	s.28(1)
Rest break	Half an hour after 5 continuous hours, counted inside working hours	s.28(2)–(4)
Compulsion	An employer may not compel overtime beyond statutory hours, save for defined emergencies	s.29
Overtime pay	1.5× the basic remuneration receivable in regular hours	s.31
Part-time overtime	1.5× the part-time rate	s.19(4)
Missed substitute leave	Work performed without substitute leave counts as overtime	s.30(2)

Leave entitlements

Statutory floor. Sector regulators, collective agreements and better employers all go above it.

Leave	Entitlement	Section
Weekly leave	One day each week	s.40
Public leave	13 paid days a year including May Day; 14 for female employees including International Women Labour Day	s.41
Substitute leave	For work that cannot be stopped, taken in lieu	s.42
Home (annual) leave	One paid day for every 20 days worked	s.43
Sick leave	12 paid days a year, prorated under a year; medical certificate for more than three consecutive days	s.44
Maternity leave	14 weeks total, compulsorily at least 2 weeks before and 6 weeks after delivery; full pay for 60 days; up to one further month unpaid on medical recommendation	s.45
Mourning leave	13 days on full remuneration in defined family circumstances	s.48
Accumulation	Home leave up to 90 days, sick leave up to 45 days; cashed out at last basic remuneration on separation or death	s.49

The liability nobody tracks

Section 49 turns accumulated home and sick leave into cash at last basic remuneration when someone leaves. On a team of thirty with years of unrecorded balances, that is a material provision. If your leave records live in a spreadsheet someone maintains from memory, you have an unquantified liability on your books.

Notice and termination

Section 144 notice tiers

1
Up to four weeks' employment
At least one day's notice, either direction.
2
Four weeks to one year
At least seven days' notice.
3
More than one year
At least thirty days' notice.
4
Pay in lieu
An employer terminating without notice pays remuneration for the notice period (s.144(2)). An employee leaving without notice may have the equivalent deducted from remuneration payable (s.144(3)).

Note the framing: notice runs both ways, and the tiers apply to termination in any circumstance except termination following disciplinary action for misconduct — which has its own procedure and cannot be short-circuited by simply serving notice instead.

Nepal is not an at-will jurisdiction

There is no lawful 'we're letting you go today, here's a cheque' route that skips process. Misconduct terminations require the misconduct procedure; business-driven exits require retrenchment or a genuine mutual settlement. Foreign employers who apply US at-will instincts here reliably end up at the Labour Office.

Retrenchment

Section 145 permits retrenchment where the enterprise faces financial problems in its operation, where roles become redundant through a merger, or where the enterprise must close wholly or partly for another reason. The employer must give notice at least thirty days before the retrenchment date, setting out the reason. Retrenchment is a defined process with stated grounds, notice and compensation consequences — plan it with counsel weeks ahead, not on the afternoon the board decides.

Employing foreign nationals

Section 22 prohibits employing a foreign national without a work permit from the Department, and only where the required skilled labour is unavailable among Nepali citizens, after following the prescribed prior procedure.
The work permit is separate from immigration status: the individual also needs the appropriate working visa from the Department of Immigration.
Quota percentages, fee schedules and validity periods change — take them from doi.gov.np and immigration.gov.np at the time you file rather than from any article, including this one.

What this means in practice

Written contract in Nepali as the controlling version, with English alongside if your parent company needs it.
Probation stated explicitly, no longer than six months, with a diarised review date before it expires.
Leave balances tracked in a system, not a spreadsheet, because s.49 makes them cash.
Notice tiers built into your offboarding template so nobody improvises a one-week exit for a three-year employee.
Any headcount reduction routed through the retrenchment procedure with 30 days' notice and a stated reason.
Overtime authorised in advance and paid at 1.5×, not absorbed as unpaid goodwill.

Frequently asked questions

What is the notice period in Nepal?

Under Labour Act 2074 s.144: at least one day for employment up to four weeks, at least seven days from four weeks to one year, and at least thirty days beyond one year. An employer terminating without notice must pay remuneration for the notice period instead.

How long can probation last in Nepal?

Up to six months (s.13). If the employer does not terminate the contract during probation for unsatisfactory work, the employment relationship becomes valid automatically at the end of it.

How much annual leave do employees in Nepal get?

Home leave accrues at one paid day per twenty days worked (s.43), on top of 13 days of public leave — 14 for female employees (s.41) — and 12 days of paid sick leave a year (s.44).

What is maternity leave in Nepal?

Fourteen weeks in total, with at least two weeks before and six weeks after delivery taken compulsorily. Full remuneration is paid for sixty days, and a further month of unpaid leave may be approved on medical recommendation (s.45).

Can I make redundancies in Nepal?

Yes, through retrenchment under s.145, where the enterprise faces financial problems, roles become redundant on merger, or the enterprise closes in whole or part. It requires at least thirty days' advance notice stating the reason, and it is not a substitute for the misconduct procedure.

References

Labour Act 2074 (2017) — full text — FAO/ILO NATLEX
Labour Act 2074 — Section 144, notice to be given — Nepal Laws
Contribution Based Social Security Act 2075 (2018) — P4H / Government of Nepal
Social Security Fund — schemes and enlistment — SSF Nepal
Bonus Act 2030 — Section 5 (10% of net income) — Nepal Laws
Income Tax Act 2058 — Section 89, contract payments — Nepal Laws
Income Tax Act 2058 — Section 88, service payments — Nepal Laws
Minimum Remuneration Notice 2082 (effective 17 July 2025) — Pradhan Law / Nepal Gazette
Inland Revenue Department — Nepal — IRD Nepal

Nepal Employment Terms, Leave & Termination