How to Hire Remote Employees In 


The Basics

Nepalese rupee
Employer Taxes
Payroll Frequency
Official Language

Employment in 


Hire Independent Contractors

Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.

For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.

For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.

As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.

While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.

Benefits of Hiring Independent Contractors
Reduced overhead: Lower cost in expenses, payroll, benefits, and more.
Greater flexibility: Contractors can be brought on as-needed. If not a good fit, you simply don’t have to move forward with the contract.
Reduced legal risk: Contractors aren’t usually protected by employment anti-discrimination and workplace safety laws.
Disadvantages of Hiring Independent Contractors
Risk of Misclassification: Not only does this deny workers their proper protections, it can also result in steep penalties and damage to your company. If the IRS determines that employee misclassification has occurred, you will be liable for a percentage of the employees wages, FICA contributions, penalty fines, unpaid taxes, up to a year in prison, and more.
Lack of Control: Contractors are drawn to being independent because it gives them greater control over the work they perform and who they work with. Because they’re not employees, you can’t tell them what to work on and how it should be done.
Lack of Loyalty: Contractors come and go as-needed. Many companies hire contractors for short-term work, which makes it difficult to cultivate loyalty.
Increased Scrutiny: Using Independent Contractors typically leads to an increased risk of being audited.

Set up a subsidiary in 


A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.

Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Nepal can be expensive, stressful, and time-consuming. It's not for the faint of heart.

To set up a subsidiary in Nepal, you have to:

  1. Register your business name and file articles of incorporation
  2. File for local bank accounts
  3. Learn and keep track of the local employment laws
  4. Set up local payroll
  5. Hire local accounting, legal, and HR people

If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Nepal.

Use an Employer-of-Record (EOR)

An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.

An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.

Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.

At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.

Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:

  • Ability to attract talented and motivated employees from all over the world.
  • Full legal compliance: There is no risk of violating local employment laws.
  • Transparency: Employees are still your employees. All the work, processes, operations and day-to-day business belong to you, the company, just like with any other employee. Panther just takes on all of the responsibilities, obligations and admin work related to your team's employment.
  • No risk of misclassification

Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.

Paying Remote Employees

Paying employees in Nepal is not the same as paying workers in your own country. Employees have to be paid using Nepal’s employment and payroll standards.

This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.

Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.

After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:

Pay through a local entity

One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.

Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.

Work with an EOR

Outside of EORs acting as the full admin employer, many also provide remote payroll.

For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.

We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.


 Specific Information

Working Hours

Nepalese rest on Saturday and work from Sunday to Friday.

Nepal generally has a 48 hour working week.


If any worker or employee is engaged to work for more than eight hours in any day, or for more than 48 hours in any week, he shall be paid remuneration for such overtime work at the rate of 150 per cent of his usual remuneration.

Payroll Tax



  • Medical treatment
  • Accident and disability protection
  • Old age protection
  • Dependent family protection

Minimum Wage

Nepal's minimum wage is 8,000 Nepalese rupees a month ($74) for all workers. It is the lowest amount a worker can be legally paid for his work.


Pay Cycle

Employees receives their payment monthly.

13th Salary

13th month pay is not mandatory.


Paid Time Off (PTO)

Annual leave days in Nepal are decided based on the number of days an employee works with a company.

At present, for every 20 days worked, an employee is eligible for one day of annual leave.

Each employee is eligible for one weekly holiday. This can be a Sunday, but if the employer cannot have all employees off on the same day, they may provide a break on a rotational basis.

All employees are eligible for a total of 13 days off for annual public holidays, including May Day. Women are given an extra day off for Women’s Labor Day holiday.

Public Holidays

There are 25 public holidays.

Sick Days

The duration of sick leave entitlement provided to workers is dependent on how long they have been employed by their employer:

  • Employees are entitled to paid sick leave of 12 days.
  • If the employee has worked for the employer for less than one year, sick leave is granted in proportion to their employment period.
  • Employees can accumulate sick leave up to a maximum of 45 days and must be paid their basic remuneration for accumulated sick leave over 45 days at the end of the year.

Maternity Leave

Pregnant or nursing mothers are allowed a total of 98 days off from work based on their maternity leave.

They are fully paid for up to 60 days.

Paternity Leave

The newly introduced Labor Act requires employers to provide 15 days of paid paternity leave.

Parental Leave

There are no provisions in the law regarding paternity leave.

Other Leave

Home leave - one day's leave for every 20 days' work.

Special leave - 30 days a year after having it approved in advance.

Marriage Leave


Bereavement Leave

Employees are allowed up to 13 days of leave from work.


Termination Process

The employee can terminate the employment voluntarily by submitting a resignation letter.

The employment of the worker on work bound employment is terminated after the completion of the work provided in the employment agreement.

If the performance of the employee is found to be unsatisfactory or below the standard in the performance appraisal for three or more times, the employment of such worker may be terminated by the employer.

However, prior to terminating the employment the performance appraisal as per the Regulation under the Act or Bylaws should have been conduct.

Such employee should be provided an opportunity to submit explanation giving at least seven (7) days by the employer where ten (10) or more people work.

In case any employee is physically or mentally disabled or injured rendering him/her unable to work or requiring a long period for medical treatment effecting in the work of the entity, the employer, on recommendation of a medical practitioner may terminate his/her employment.

The employee or employer terminating the employment should provide a notice except in the situation of termination by dismissal.

The notice requirement is linked to the length of service which is as follows.

  • If the period of employment is up to 4 weeks, then the notice period is of 1 day.
  • If the period of employment is from 4 weeks to 1 year, then the notice period is of 7 days.
  • If period of employment is more than 1 year, then the notice period is of 30 days.

Notice Period

The notice period in Nepal is:

The employee or employer terminating the employment should provide a notice except in the situation of termination by dismissal.

Severance Pay

The severance payment is of 30 days per year if an employee is not entitled to unemployment allowance under Social Security Act.

Probation Period

Probation period Under the Labor Act 2074, the probationary period is six months.