Labor Act, 2017 required the amount of provident fund and gratuity to be deposited in the Social Security Fund. It further provided that certain benefits if are provided by the Social Security Fund would not be further required to be provided by the Employer such as remuneration for the extended period of sick leave. Contribution based Social Security Act was enacted on 13 August,2017 (29 Shrawan,2074) to be enforced on 91st day of the enactment. The prevailing legal provisions on Contribution based Social Security i.e. Act, Rules, Directives, Notices regulate provide the rate of contribution, schemes operated by the Fund, the benefits under each scheme, etc.

The employer is required to contribute 20% of basic salary of employee and employee is required to contribute 11% of one’s basic salary. If employer is providing additional benefits to employees, enrolling with Social Security Fund does not restrict the employer to provide such additional benefits. Please refer to the PDF here to understand the prevailing system of Contribution based Social Security.

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