With the current rise in the controversy of Social Security Fund, a fund getting mandated by the government to all the private organizations as well which is collected through the employees and employer totaling 31% (11% by employee and 20% by employer) of the basic salary. The covered modules by this contribution are many including the insurance of accidents, medical claims, death, retirement policies, withdrawal of pension amount as a whole, etc. You may click here for more details on the benefits. A lot of institutions and employees, especially Bankers and Insurance Companies have protested against SSF provision. So what actually is Social Security Fund?
SSF fund is seen very widely in USA. US government has been providing the Social Security for the financial protection of their nation’s people for over 80 years. With retirement, disability, and survivor’s benefits, Social Security is one of the most successful anti-poverty programs in US’s history.
But how relevant is it in the country like ours?
According to International Labor Organization (ILO), they highly recommend the social security in the Nepali floor especially for the labor workers who have the minimum wage rate. They are not on any CIT, Provident Fund or do not claim for any insurance. For any accidents and other incidents, even the organization that they work for do not bear any losses. In such situation, the government acts as an insurance shield for them.
Even in many other private organizations, the SSF has already been implemented for the employees. The PF and Gratuity are already included in the SSF. The lump sump percentage of 31 is deducted altogether. Here, the benefit to Insurance companies was when there was only CIT, PF and gratuity, and no insurance coverage like that of SSf, but now the SSf have seem to cover the insurance part as well.
No matter the controversies, SSF is still mandatory and to be honest is quite beneficial as well. So here are little whats and hows for the Social Security Fund in Nepal:
How can one participate in SSF?
By visiting the website of SSF at www.ssf.gov.np one can register by clicking SOSYS online Registration after which a unique SSF number, username and password can be obtained. After this all the necessary details of employer and employee can be updated and uploaded online.
What benefits in SSF?
Medical checkups and maternity security plan, Accidental and physically impaired Security plan, Dependent family security plan and old age security plan.
What if I resign?
The social security number of such employee shall remain the same. Regular contribution shall have to be made even from a different entity.
If I start my own business?
Self-employed persons can also be a part of SSF by depositing regular contribution. In case if someone quits an existing job and starts own business, such person can continue to contribute in SSF.
What is the Income Tax Impact?
Income Tax of first slap is not necessary. 1% social security tax is not required to be paid after contributing in the SSF.
But payroll is already frustrating to prepare, NOW SSF LAWS??
Yes, we have all heard it. Payroll preparation has never been easy; well at least while you are doing things manually. The new SSF rule has left HR professionals and accountants scratch their heads. We bet somehow you wish if there was a software that would make payroll handy and run the laws, policies and taxations automatically as soon as the government policies are updated.
At Nimble, we know exactly what you have wished for. Our payroll system is not only dynamic to your requirements but SSF friendly and compliable. We can also export the employees directly to the SSF portal without you having to export the details into SSF website manually. On top of it, the payroll is as easy as a three quick clicks.
Summing it up, Social Security Fund is not that bad while you take it on the positive note and now the payroll preparation is also not that frustrating either. You just need the perfect tool to cater to your needs. Want to know more on SSF functioning and our payroll system?? Click here. Make sure to mention the code SSFSHAM to claim your free gift after coping up with me till the end of the blog. Stay tuned for more blogs.
SSF TAXATION (to all those curious payroll makers, you may go through the slides)