Table of Contents
The provident fund (PF) is one of the most important retirement savings schemes in Nepal. Established under the Employees' Provident Fund Act 2019 BS (1962), the Employees' Provident Fund (EPF / कर्मचारी सञ्चय कोष) is a compulsory savings programme for government employees and a voluntary scheme for private and public sector workers. With Nepal transitioning to the Social Security Fund (SSF) under the Social Security Act 2074 (2017), understanding how EPF works alongside SSF is essential. This guide covers EPF contribution rates, withdrawal rules, loan facilities, retirement benefits, and the EPF vs SSF transition for 2026.
The Employees' Provident Fund (EPF) in Nepal is a retirement savings scheme where both employer and employee contribute 10% each of basic salary (total 20%). Managed by the EPF Board under the Ministry of Finance. Current interest rate: approximately 8-9% per annum. Withdrawal: upon retirement (age 58), resignation after 5+ years of service, permanent disability, or death (to nominee). Loan facility available against balance. Government employees are mandatorily covered; private sector employees may opt for EPF or SSF. EPF office: Kathmandu, with branches across Nepal. Online access at epf.org.np.
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What Is the Employees' Provident Fund (EPF)?
The Employees' Provident Fund (कर्मचारी सञ्चय कोष) is a statutory retirement savings institution established in 2019 BS (1962 AD). It operates as a defined contribution scheme — both the employer and employee contribute a fixed percentage of salary, which accumulates with interest until retirement or withdrawal.
| Detail | Information |
|---|---|
| Full name | Karmachari Sanchaya Kosh (कर्मचारी सञ्चय कोष) |
| Established | 2019 BS (1962 AD) |
| Governing law | Employees' Provident Fund Act 2019 BS |
| Regulatory authority | EPF Board under Ministry of Finance |
| Type | Defined contribution retirement scheme |
| Head office | Kathmandu (with branches in major districts) |
| Website | epf.org.np |
| Total contributors | Over 5 lakh active contributors |
Who Is Covered by EPF?
EPF coverage differs between government and private sector employees. The transition to SSF has changed the landscape for new private sector employees.
| Category | EPF Coverage | Status |
|---|---|---|
| Government civil servants | Mandatory | All government employees automatically enrolled |
| Nepal Army, Nepal Police, APF | Mandatory | Covered under EPF |
| Public corporation employees | Mandatory | Government-owned enterprises |
| Private sector (pre-SSF) | Voluntary/employer-enrolled | Existing EPF members continue |
| Private sector (new employees) | SSF mandatory (not EPF) | New employees enrolled in SSF instead |
| Constitutional body employees | Mandatory | Covered under EPF |
| Self-employed | Not covered | EPF is employer-employee scheme only |
| Foreign nationals working in Nepal | Depends on employer policy | May contribute if employer is enrolled |
EPF Contribution Rates
Both the employer and employee contribute to the provident fund. The contribution is calculated on basic salary (not total salary including allowances).
Current Contribution Rates
| Contributor | Rate | Calculated On |
|---|---|---|
| Employee contribution | 10% of basic salary | Basic salary (before allowances) |
| Employer contribution | 10% of basic salary | Same basic salary as employee |
| Total monthly contribution | 20% of basic salary | Combined employer + employee |
Contribution Example
| Component | Amount (NPR) |
|---|---|
| Basic salary | 40,000 |
| Employee contribution (10%) | 4,000 |
| Employer contribution (10%) | 4,000 |
| Total monthly deposit | 8,000 |
| Annual deposit | 96,000 |
| After 20 years (excluding interest) | 19,20,000 |
| After 20 years (with ~8.5% interest, compounded) | Approximately 50-55 lakh |
Tax benefit: Employee's EPF contribution is deductible from taxable income under the Income Tax Act 2058, reducing your tax liability.
EPF Interest Rate
EPF pays annual interest on the accumulated balance. The interest rate is declared by the EPF Board each year after the fiscal year ends.
| Fiscal Year | Interest Rate | Notes |
|---|---|---|
| FY 2081/82 (2024/25) | 8.00% – 9.00% | To be finalised after FY end |
| FY 2080/81 (2023/24) | 8.29% | Declared by EPF Board |
| FY 2079/80 (2022/23) | 8.50% | Declared by EPF Board |
| FY 2078/79 (2021/22) | 8.50% | Declared by EPF Board |
| FY 2077/78 (2020/21) | 8.00% | COVID-impacted year |
Interest is compounded annually and credited to each member's individual account. The rate has historically ranged between 7.5% to 9.5%, making EPF one of the best fixed-return savings instruments in Nepal.
EPF Withdrawal Rules
EPF funds cannot be withdrawn freely — they are meant for retirement. The Act specifies conditions under which withdrawal is permitted.
Full Withdrawal (100% of Balance)
| Condition | Eligibility | Documents Required |
|---|---|---|
| Retirement (age 58) | Upon reaching retirement age | Retirement letter, citizenship, PF account details |
| Resignation after service | After leaving employment | Resignation acceptance letter, service certificate |
| Permanent disability | If unable to work due to disability | Medical certificate from government hospital |
| Death of member | Nominee/family receives the balance | Death certificate, nominee proof, relationship certificate |
| Foreign employment/migration | If permanently leaving Nepal | Visa/passport proof, clearance from employer |
Partial Withdrawal
Partial withdrawal is allowed in specific circumstances without leaving employment:
| Purpose | Maximum Withdrawal | Conditions |
|---|---|---|
| House construction/purchase | Up to 75% of balance | Must provide land ownership proof and building plan |
| Medical emergency | Up to 75% of balance | Serious illness of self, spouse, children, or parents |
| Education (higher studies) | Up to 50% of balance | For self or children's higher education abroad |
| Marriage | Up to 50% of balance | Own marriage or children's marriage |
Important: Partial withdrawal requires minimum 5 years of continuous contribution to EPF. The withdrawal amount must be repaid if the member continues employment.
EPF Loan Facility
Instead of withdrawing, EPF members can take loans against their provident fund balance at favourable interest rates.
| Loan Detail | Information |
|---|---|
| Maximum loan amount | Up to 90% of own contribution (employee share) |
| Interest rate | Typically 2-3% above EPF deposit rate (approximately 10-12%) |
| Repayment period | Deducted from monthly salary in installments |
| Eligibility | Minimum 3 years of contribution |
| Purpose | House construction, medical treatment, education, or personal |
| Guarantee | PF balance serves as security — no other collateral needed |
| Application | Through employer to EPF office |
EPF also runs a separate housing loan programme for members seeking to purchase or build homes, with competitive interest rates below commercial bank rates.
EPF Withdrawal Process: Step by Step
| Step | Action | Details |
|---|---|---|
| 1 | Obtain employer clearance | Get service certificate and PF account confirmation from employer |
| 2 | Collect required documents | Citizenship, retirement/resignation letter, PF account details, photos |
| 3 | Fill withdrawal application form | Available at EPF office or download from epf.org.np |
| 4 | Submit to EPF office | Submit at your registered EPF branch office |
| 5 | Verification | EPF verifies contribution records and documents (7-30 days) |
| 6 | Approval and payment | Amount credited to bank account or cheque issued |
Required Documents for Full Withdrawal
- EPF withdrawal application form (properly filled)
- Citizenship certificate (original and copy)
- Retirement letter or resignation acceptance
- Service certificate from employer
- PF account number and passbook
- Recent passport-size photographs (2 copies)
- Bank account details for direct transfer
- For nominee claims: death certificate, relationship certificate, nominee declaration form
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EPF Nominee Rules
Every EPF member must declare a nominee — the person who will receive the provident fund balance in case of the member's death.
| Rule | Details |
|---|---|
| Who can be a nominee | Spouse, children, parents, or legal heirs |
| Updating nominee | Can be changed at any time through EPF office |
| After marriage | Nominee should be updated to include spouse — important after court marriage |
| After divorce | Update nominee to remove ex-spouse if applicable |
| Multiple nominees | Can designate multiple nominees with percentage split |
| Minor nominee | Guardian must be appointed for minors |
| If no nominee declared | Goes to legal heirs under inheritance law |
EPF vs SSF: Key Differences
Nepal is transitioning from EPF to the Social Security Fund (SSF) for private sector employees under the Labour Act 2074 and Social Security Act 2074. Understanding the difference is critical.
| Feature | EPF | SSF |
|---|---|---|
| Governing law | EPF Act 2019 BS | Social Security Act 2074 |
| Contribution rate | 20% (10% + 10%) | 31% (11% employee + 20% employer) |
| Coverage | Government + existing private sector | New private sector employees (mandatory) |
| Benefits | Retirement savings + loan | Medical, maternity, accident, disability, old age, dependant, unemployment |
| Withdrawal | On retirement/resignation | Old age benefit at 60; other benefits as needed |
| Interest rate | ~8-9% per annum | Government-determined rate |
| Lump sum withdrawal | Yes (full balance) | Monthly pension-style payment for old age |
| Portability | Limited (employer-based) | Portable across employers |
| Online access | epf.org.np | sosys.ssf.gov.np |
Transition Rules
- Existing EPF members in the private sector can continue with EPF or transfer to SSF
- New employees in private sector firms with 10+ workers must enrol in SSF (mandatory)
- Government employees continue with EPF — not required to join SSF
- Dual membership: Some employees may have both EPF and SSF if they changed jobs during the transition
Provident Fund for Government Employees
Government civil servants have the most established EPF structure:
| Feature | Details |
|---|---|
| Enrolment | Automatic upon government appointment |
| Contribution | 10% employee + 10% government |
| Retirement age | 58 years (Civil Service Act) |
| Gratuity | Separate from PF — paid as lump sum on retirement |
| Pension | Government pension is separate from EPF withdrawal |
| Withdrawal | Full balance + interest upon retirement |
| Loan facility | Available through EPF |
Government employees receive three retirement benefits: EPF lump sum, government pension (monthly), and gratuity. Together, these form the retirement package.
Provident Fund for Private Sector Employees
Private sector EPF participation depends on when the employee joined and the employer's enrolment status:
- Pre-SSF employees: Continue with EPF at 20% combined rate
- Post-SSF employees: Must enrol in SSF at 31% combined rate
- Employers with 10+ employees: Must be registered with either EPF or SSF
- Small employers (<10 employees): SSF enrolment is voluntary but encouraged
Key Differences for Private Sector
- No government pension — EPF/SSF is the primary retirement benefit
- Gratuity is mandatory under the Labour Act 2074 — paid by employer on termination/retirement
- Private sector employees can change jobs; EPF account follows them if the new employer is also EPF-enrolled
EPF Online Services
EPF has introduced digital services for member convenience:
| Service | How to Access | Details |
|---|---|---|
| Check balance | epf.org.np | Log in with member ID to view current balance |
| View contribution history | Online portal | See monthly deposits and interest credits |
| Download forms | Website downloads section | Withdrawal, loan, and nominee change forms |
| Loan application status | Online portal | Track loan application progress |
| Interest rate updates | Website and notices | Annual interest rate declarations |
Provident Fund and Marriage
Marriage has several implications for your provident fund that many people overlook:
| Situation | PF Implication | Action Required |
|---|---|---|
| After court marriage | Spouse becomes primary nominee | Update nominee form at EPF office |
| After divorce | Ex-spouse may claim PF as marital asset | Update nominee; consult lawyer on property division |
| Death of member | Spouse receives balance as nominee | Spouse must apply with death and marriage certificates |
| Partial withdrawal for marriage | Up to 50% for own/children's marriage | Apply with marriage-related documents |
| PF as marital property? | Courts may consider PF balance during divorce | Legal advice needed — see marital property rights |
Tax Treatment of Provident Fund
Understanding the tax implications helps maximise your EPF benefits:
| Event | Tax Treatment | Reference |
|---|---|---|
| Employee contribution | Tax deductible (reduces taxable income) | Income Tax Act 2058 |
| Employer contribution | Not taxed in employee's hands at time of contribution | Exempt at contribution stage |
| Interest earned | Tax-free while in the fund | Accumulates without tax deduction |
| Withdrawal at retirement | Employer's contribution + interest is taxable as income | Section 8 of Income Tax Act 2058 |
| Employee's own contribution | Not taxed at withdrawal (already taxed before contribution) | No double taxation |
| Lump sum withdrawal | May push into higher tax slab in the year of withdrawal | Plan withdrawal timing carefully |
Common Problems and Solutions
| Problem | Solution |
|---|---|
| Employer not depositing PF | File complaint at EPF office or Department of Labour; employer faces penalties under Labour Act |
| Cannot find PF account number | Visit EPF office with citizenship certificate; they can trace using your name and employer |
| Delayed withdrawal processing | Follow up at EPF branch; typical processing is 7-30 days after complete submission |
| Nominee dispute after death | If nominee is contested, courts decide based on inheritance law |
| Employer closed down | Contact EPF directly; your individual account is maintained regardless of employer status |
| Transfer between EPF and SSF | Contact both EPF and SSF offices; transfer process is being developed |
| Wrong contribution amount | Report to EPF with salary slips showing correct basic salary |
EPF Branch Offices in Nepal
EPF has its head office in Kathmandu and branch offices across the country:
| Location | Coverage Area |
|---|---|
| Head Office — Kathmandu | Central processing, policy, and main service centre |
| Lalitpur Branch | Lalitpur district |
| Pokhara Branch | Gandaki Province |
| Butwal Branch | Lumbini Province |
| Biratnagar Branch | Koshi Province |
| Chitwan Branch | Bagmati Province (outside Valley) |
| Dhangadhi Branch | Sudurpashchim Province |
| Nepalgunj Branch | Lumbini Province (mid-western) |
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Key Legal Provisions
| Law/Section | Subject | Key Provision |
|---|---|---|
| EPF Act 2019 BS | Establishment and governance | Created EPF as statutory body; defines contribution and withdrawal rules |
| Labour Act 2074, Section 53 | Provident fund obligation | Employers with 10+ workers must provide PF or SSF enrolment |
| Labour Act 2074, Section 54 | Gratuity | Mandatory gratuity separate from provident fund |
| Social Security Act 2074 | SSF transition | New social security framework replacing EPF for private sector |
| Income Tax Act 2058 | Tax treatment | PF contribution deductible; employer share taxable on withdrawal |
| Civil Service Act 2049 | Government employee PF | Mandatory EPF for civil servants; retirement at 58 |
Frequently Asked Questions
The EPF contribution rate is 10% from the employee and 10% from the employer, totalling 20% of basic salary. This is deducted monthly and deposited into the member's individual EPF account. The contribution is calculated on basic salary only, not including allowances.
Full withdrawal is allowed upon retirement (age 58), resignation from employment, permanent disability, or death (nominee receives). Partial withdrawal is allowed for house construction (75%), medical emergency (75%), education (50%), or marriage (50%) after 5 years of contribution.
The EPF interest rate for FY 2080/81 was 8.29%. Rates typically range between 8-9% per annum and are declared annually by the EPF Board after the fiscal year ends. Interest is compounded annually and credited to each member's account.
EPF is the older scheme (20% contribution) focused on retirement savings for government and existing private sector employees. SSF is the newer scheme (31% contribution) mandatory for new private sector employees, offering broader benefits including medical, maternity, accident, disability, and old age coverage.
Yes. EPF members can take a loan of up to 90% of their own contribution (employee share). Interest rate is typically 10-12%. Minimum 3 years of contribution is required. The loan is repaid through monthly salary deductions. No additional collateral is needed.
Visit epf.org.np and log in with your EPF member ID and password. You can view your current balance, contribution history, and interest credits. If you don't have online access, visit your nearest EPF branch with your citizenship certificate to get your account details.
Employee's contribution is tax-deductible (reduces taxable income). Interest earned is tax-free while in the fund. Upon withdrawal, the employer's contribution and interest on it is taxable as income. Your own contribution is not taxed again at withdrawal.
The full EPF balance (both employer and employee shares plus interest) is paid to the declared nominee. If no nominee was declared, the amount goes to legal heirs under inheritance law. The nominee must apply with the death certificate, relationship proof, and nominee declaration form.
Yes. EPF members with at least 5 years of continuous contribution can withdraw up to 75% of their balance for house construction or purchase. You must provide land ownership proof and building plan. The withdrawal amount may need to be repaid if you continue employment.
EPF withdrawal processing typically takes 7 to 30 days after submitting complete documents. The timeline depends on document verification, the branch office workload, and whether all contribution records are up to date. The amount is credited to your bank account or issued as a cheque.
Yes, but the scheme depends on when they joined. Existing private sector employees may be enrolled in EPF (20% contribution). New employees in firms with 10+ workers must be enrolled in SSF (31% contribution) under the Social Security Act 2074. Small firms may voluntarily enrol.
Yes. After marriage, you should update your EPF nominee to include your spouse. Visit your EPF branch with your marriage certificate, citizenship certificates of both spouses, and nominee change form. This ensures your spouse receives the PF balance in case of your death.
EPF offers a separate housing loan programme for members wanting to purchase or construct homes. The interest rate is lower than commercial banks. Eligibility requires minimum years of contribution. The loan amount depends on your PF balance and repayment capacity. Apply through your EPF branch.
Courts may consider EPF balance as part of marital property during divorce proceedings. Under property division rules, the accumulated PF during the marriage period may be subject to division. Consult a lawyer for your specific situation as court decisions vary case by case.
If your employer deducts PF from your salary but does not deposit it, file a complaint at the EPF office and the Department of Labour. The employer faces penalties under the Labour Act 2074. Your individual PF account is maintained by EPF — the employer's non-deposit is tracked as arrears.
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