Quick answer: SSF (Social Security Fund) and EPF (Employees Provident Fund, run by Karmachari Sanchaya Kosh) are two different statutory schemes, and a private employer is generally in one or the other — not both. EPF is the older provident-fund model: 10% of basic salary from the employee plus 10% from the employer, going to a retirement savings account. SSF is the newer contribution-based social security regime: 31% of basic salary in total — 11% deducted from the employee and 20% added by the employer — funding pension plus medical, accident and dependant protections. Which one applies changes your payroll maths, your employees’ take-home pay, and even their income tax.
The two schemes side by side
| EPF (Sanchaya Kosh) | SSF (Social Security Fund) | |
|---|---|---|
| Total contribution | 20% of basic (10% + 10%) | 31% of basic (11% + 20%) |
| Employee share | 10% | 11% |
| Employer share | 10% | 20% (includes the 8.33% that replaces separate gratuity) |
| What it buys | Retirement savings (withdrawable fund + loans against it) | Four schemes: medical & maternity, accident & disability, dependant family, and old-age (pension) |
| Gratuity | Paid separately by the employer under the Labour Act | Folded into the employer’s 20% — no separate gratuity accrual |
| Payout style | Lump sum at retirement/exit | Primarily pension-style benefits with scheme rules per benefit |
| Typical coverage | Government and older private arrangements | Private-sector employers registering under the contribution-based Social Security Act |
Which one applies to my company?
The contribution-based Social Security Act pulls formal private-sector employers toward SSF: businesses register, enlist employees, and contribute monthly through the SSF portal. Companies with older EPF arrangements have historically continued them, and transitions from EPF to SSF happen company-by-company. The practical rule: a company runs one scheme as its statutory deduction, your payroll must know which, and switching is a real HR project — employee communication, enrolment, and a cutover month where the deduction changes on every payslip.
The payroll difference, on one payslip
Take an employee with a basic salary of NPR 30,000/month:
| Under EPF | Under SSF | |
|---|---|---|
| Employee deduction | NPR 3,000 (10%) | NPR 3,300 (11%) |
| Employer cost on top | NPR 3,000 (10%) + gratuity accrual | NPR 6,000 (20%), gratuity included |
| Monthly into the fund | NPR 6,000 | NPR 9,300 |
There is also a tax interaction worth knowing: from FY 2083/84 the first income-tax band (1% social security tax on income up to NPR 10 lakh) is waived for SSF-contributing employees — see the full PF/SSF/TDS guide for the worked slabs. Contributions to either fund are also deductible within the statutory retirement-contribution limit when computing taxable income.
Switching from EPF to SSF — the checklist
- Register the employer on the SSF portal and obtain your employer SSF number.
- Enlist each employee (their individual SSF numbers) before the cutover month.
- Pick a clean cutover payroll month — ideally Shrawan, so the change aligns with the fiscal year.
- Update every salary structure: swap the 10% EPF deduction for 11% SSF, replace employer PF + gratuity accrual with the single 20% SSF cost.
- Tell employees what changes on their payslip — slightly lower take-home, broader coverage, and the 1% SST waiver.
- File and deposit through the SSF portal monthly, and keep the statutory return trail (how Udyot produces these).
How Udyot ERP handles both
Udyot ERP’s payroll supports either regime per company: salary structures carry the right deduction and employer-cost lines, payslips show the split, and the statutory outputs — SSF/EPF summaries and salary-TDS Annex 10 — come out of the same pay run. See salary structures & payroll processing and the payroll accounting guide.
Common questions
Can an employee be in both EPF and SSF?
As statutory payroll deductions, no — the company operates one scheme. (Voluntary personal savings products are a separate matter.)
Is the employer’s 20% SSF really “instead of” gratuity?
Yes — the 20% is defined to include the 8.33% gratuity-equivalent, so you do not accrue separate Labour-Act gratuity for SSF-covered staff.
What happens to the old EPF balance after switching?
It stays with Sanchaya Kosh under its withdrawal rules; contributions simply stop. Employees keep both histories.
Scheme rules and rates are set by the SSF, Sanchaya Kosh and the Finance Act and do change — verify current figures with ssf.gov.np or your CA before you run the cutover.