Nepal salary tax questions, answered

On the fiscal year, not the month. Add your annual pay and your employer's retirement contribution, subtract the reliefs you qualify for, then run what is left through the bands: 1% up to NPR 10,00,000, then 10%, 20%, 27% and 29%. Your employer withholds a share monthly as TDS.

Work it out with the salary tax calculator→

On gross. Every cash payment from the employment is assessable income: basic, grade, dearness and other allowances, overtime and the festival bonus. Basic salary only decides how much PF or SSF is contributed — it does not limit what is taxed.

This is the single most common misunderstanding on a Nepali payslip. A structure that puts 40% of pay into allowances does not shrink the tax; it only shrinks the fund contribution.

An SSF member with basic at 60% of gross pays NPR 1,007 a month — NPR 12,080 for the year — under FY 2083/84 rules. With no retirement fund at all, the same salary pays NPR 2,500 a month, because the 1% band is no longer waived.

Change the fund, the months worked or your insurance relief and the figure moves. The calculator prices your exact case in a few seconds.

Work it out with the salary tax calculator→

Nepal's fiscal year runs from Shrawan 1 to the end of Ashad — roughly mid-July to mid-July. FY 2083/84 began on Shrawan 1, 2083 (mid-July 2026). Income is assessed for that whole year, which is why joining or leaving mid-year changes your tax.

Not from FY 2083/84 onward. The separate couple schedule was merged into one table that applies to every individual. Up to FY 2082/83, a married filer had a wider first band — NPR 6,00,000 instead of NPR 5,00,000 — which is still relevant for older payslips.

Work it out with the income tax slab rates→

On what you actually earn in that fiscal year, not on an annualised salary. Six months of pay is assessed as six months of income, so your effective rate is usually lower than a full year at the same monthly figure. Set 'paid for' to the months you were actually paid.

Neither on its own — the year is taxed as a whole, so add each stretch at the rate it was paid. Four months at NPR 40,000 and eight at NPR 60,000 is NPR 6,40,000 of salary for the year, and the bands run on that total. When the raise fell does not change the bill.

The calculator takes this directly: choose 'my salary changed during the year' and enter each period. Your withholding still moves with your pay, so the months after a raise carry more of the same annual bill.

From the first payslip of the new fiscal year, which is Shrawan. FY 2083/84 rates apply to income of that year — it began Shrawan 1, 2083 (mid-July 2026), not on the day the budget was announced. Income earned in Ashad 2083 is still taxed under FY 2082/83 rules.

This is a common payroll error at the year boundary: some systems apply the fiscal year that is configured rather than the one the pay period falls in. If your Shrawan payslip shows the same TDS as Ashad's, ask payroll which slab table it used.

Work it out with the new income tax slabs→

Four cover almost everyone: retirement contributions to PF or SSF (yours and your employer's), the Citizen Investment Trust, a life insurance premium up to NPR 40,000, and a health insurance premium up to NPR 20,000. PF/SSF and CIT share one combined ceiling of NPR 5,00,000 a year.

Work it out with every deduction and its ceiling→

Only if the combined ceiling still has room. CIT relief is capped at NPR 3,00,000, at one-third of assessable income, and at whatever is left inside the NPR 5,00,000 ceiling after your PF or SSF contribution. On a high salary with SSF, that room is often zero.

The deposit is still your savings either way — but if you are making it purely for the tax break, check the room first. The calculator shows exactly how much relief a CIT contribution would buy you this year.

Work it out with what each deduction saves→

Life insurance premiums are deductible up to NPR 40,000 a year and health insurance premiums up to NPR 20,000. These sit outside the retirement ceiling, so they are usually the cheapest unused relief a salaried person has — worth NPR 12,000 of tax at a 20% band.

Work it out with every deduction and its ceiling→

Yes. Premiums and CIT contributions count for the whole year in which they are paid, so declaring them to payroll in Poush or Magh still reduces the year's tax. The remaining months simply withhold less to correct what was over-withheld earlier.

Before payroll closes the fiscal year — in practice, before the final Ashad run. A premium paid at any point in the year counts for that whole year, so a declaration in Poush still works: the months that remain withhold less to give back what was over-withheld earlier.

Miss the year end and the relief is not lost, but recovering it means taking it up with the Inland Revenue Department rather than with payroll. Hand payroll the receipt as soon as you have it.

A resident woman whose only income is employment income in Nepal gets a 10% rebate on the tax computed. It applies to the tax, not to income, and is calculated after the bands. Select Female in the calculator and it is applied automatically.

Not as a deduction, but section 51 of the Income Tax Act 2058 gives a medical tax credit: 15% of approved medical expenditure, taken off the tax itself rather than off your income, up to a ceiling the Income Tax Rules prescribe. Anything left unused carries forward.

Cosmetic procedures do not count, and neither does any part of a bill an insurer reimbursed. The claim goes through a return rather than through payroll, so telling your employer achieves nothing — and it is separate from the health insurance premium relief, which is a deduction.

Work it out with how the medical credit works→

Yes. The Income Tax Act carries additional relief for a posting in a designated remote area, for pension income, and for a person with a registered disability, plus a credit for approved medical expenses and approved donations. The amounts move with each year's Finance Act.

These depend on documents your payroll team must hold on file — a posting letter, a pension record, a disability card. They sit outside this calculator's scope; confirm the current amounts with the IRD or an accountant.

PF is a retirement savings fund: you put in 10% of basic, your employer matches it. SSF takes 11% from you and 20% from your employer, and covers medical, accident, maternity, dependants and pension. Only SSF waives the 1% Social Security Tax band.

Contributors to the Social Security Fund. The 1% on the first band is a social security charge, and an SSF contribution already discharges it — charging both would tax the same rupees twice. Provident Fund members are not exempt; PF is a retirement fund, not the SSF.

For FY 2083/84 the 1% band covers the first NPR 10,00,000 of taxable income, so the waiver is worth up to NPR 10,000 a year.

Your employer's PF or SSF contribution is added to your assessable income as a benefit, then deducted again as retirement relief. Below the NPR 5,00,000 combined ceiling the two cancel out exactly, so nothing changes. Above the ceiling the excess stays taxable — which is why very high salaries pay tax on money they never received.

In practice no — an employer runs one scheme or the other, and enrolment is the employer's decision, not yours. If your workplace moves from PF to SSF mid-year, your payslip will show the switch and the relief still shares the same NPR 5,00,000 ceiling for the year.

Retirement payments are treated separately from salary: part of the payment is exempt and only the balance is taxed, usually at a low final rate. The exempt portion and rate are set by the Act and can be revised, so check the current position with the IRD or an accountant before you withdraw.

This calculator deliberately covers regular salary only. A final settlement — PF, gratuity, leave encashment, notice pay — mixes several rules at once and is worth an accountant's five minutes.

Because withholding is an estimate that keeps being corrected. A mid-year raise, a bonus, or relief you declared late all change the year's expected tax, and the remaining months absorb the difference. Many payroll systems also recompute the whole year every month, so the figure moves on its own.

Work it out with the TDS calculator→

Usually the retirement fund, not the tax. On NPR 1,00,000 a month with basic at 60%, an SSF member takes home NPR 92,393 a month while someone in no fund at all takes home NPR 97,500 — and the SSF member is the one paying less tax.

The gap is that member's own contribution, which is their savings rather than money lost. Insurance relief only one of you declared, the 10% rebate a resident woman receives, and a different basic-to-gross split move the figure too. Compare every deduction line on both payslips, not the tax line alone.

Gross salary is what the employer pays before anything comes off. Net salary — take-home, in-hand, net income: all the same figure — is what reaches your bank after the tax withheld and your own fund contribution. On NPR 1,00,000 a month with no fund that is NPR 97,500.

A third figure, CTC, sits above gross: it adds the employer's fund contribution, which never touches your account. An offer quoted as CTC is not comparable with one quoted as gross until that contribution is taken back out.

Work it out with the net salary calculator→

Yes. A festival bonus is employment income and is assessed in the year it is paid. Because it lands on top of your salary, it is taxed at your highest band — which is why the bonus month's payslip usually shows a noticeably larger TDS deduction.

There is no single rate. Salary TDS follows the Schedule 1 bands — 1% to 29% for FY 2083/84 — applied to your estimated annual taxable income and then withheld in monthly instalments. Other payments have flat rates: rent 10%, service fees 15% (1.5% with a VAT invoice), dividends 5%.

Work it out with the TDS calculator→

Your employer deposits the withheld tax with the Inland Revenue Department against your PAN and files the withholding return. You are entitled to a record of what was withheld and deposited in your name — ask payroll for the year-to-date tax computation if your figures do not agree.

Work it out with the TDS calculator→

Usually timing, not error. Payroll withholds on what it knew that month; this tool prices the full year at once. Mid-year changes, bonuses paid later, reliefs declared after Shrawan, or a cumulative withholding method all move the monthly figure while the annual tax stays the same.

Compare the annual numbers, not the monthly ones. If the annual figures still disagree, the difference is usually an allowance treated as taxable by one side and not the other.

Work it out with the TDS calculator→

Gross pay plus the employer contribution. On NPR 1,00,000 a month with basic at 60%, a Social Security Fund member costs NPR 1,12,000 a month and a Provident Fund member NPR 1,06,000. The tax and the employee contribution come out of the gross and change nothing for the company.

Budget from the total cost and explain the payslip from the deductions — they are two different numbers, and quoting one when you mean the other is how an offer ends up disputed in week one.

Work it out with the payroll calculator→

Provident Fund is 10% from the employee and 10% from the employer. The Social Security Fund is 11% from the employee and 20% from the employer — 31% in total. Every one of those is charged on basic salary, never on gross.

The SSF also caps the base it charges on: basic above NPR 3,50,000 a month does not raise the contribution.

Work it out with the payroll calculator→

On basic. A payroll that charges the contribution on gross overstates both the employee deduction and the employer cost, and it gets the tax wrong too — because the employer contribution is taxable income in the employee's hands, an inflated contribution inflates their assessable income with it.

Work it out with the payroll calculator→

It has to. The employer's PF or SSF contribution is a taxable benefit in the employee's hands, so it enters assessable income and then comes back out as relief inside the combined NPR 5,00,000 ceiling. Leaving it out under-withholds every month and leaves the employee short at the year end.

This is the single step most spreadsheets miss, and it is invisible until someone reconciles twelve payslips against the year's assessment.

Work it out with every relief and its ceiling→

One month's share of that employee's own annual assessment — not a flat rate. Work out their year: pay, allowances, bonus and the employer contribution; take the reliefs off; run the bands; apply the resident woman rebate; then divide by the months you will pay them. Two people on one salary can owe different instalments.

Work it out with the TDS calculator→

Reprice the year, then recover the difference over the months that remain — do not re-spread it evenly across twelve. A year paid at NPR 40,000 for four months and NPR 60,000 for eight owes NPR 6,400, and the payslips after the raise carry more of it than the ones before.

Work it out with the TDS calculator→

If your only income is remuneration from one employer, the tax your employer withholds is generally treated as final and no separate return is required. Anyone with other income, more than one employer, or a higher income level has their own filing obligation — confirm your position with the IRD or an accountant.

Anyone whose employer did not see the whole picture: a second employer during the year, income beyond salary, or relief that payroll never applied. Withholding is only final where it covers everything. Filing is also how you recover tax over-withheld on relief you declared too late.

The practical test is whether one payroll team held every fact about your year. If two employers each withheld against only what they paid, neither withheld enough, and the shortfall is yours to settle.

Each employer withholds against the income it pays, so neither sees your full picture and the combined withholding is usually too low. The bands apply to your total income for the year, so the shortfall is yours to settle — this is the classic case for filing a return.

Service fees are generally withheld at 15%, or 1.5% where the provider issues a VAT invoice. That withholding is not the end of the story for a resident — the income still enters your annual assessment, where the bands and your reliefs apply.

Rent paid by a business is generally withheld at 10%, and rental income follows its own rules rather than being simply added to salary. Because the treatment depends on who pays the rent and in what capacity, it is worth a short conversation with an accountant.

Through the record your employer files against your PAN with the Inland Revenue Department, and — where required — a tax clearance certificate obtained from the IRD. Employers issue a statement of tax withheld; keep it with your payslips, especially if you change jobs mid-year.

This calculator applies the Income Tax Act 2058 and the Finance Act rules for the year you select, in the order payroll applies them, and shows every step. It is an estimate for regular salary: it does not model final settlements, non-salary income, or the less common reliefs.

FY 2083/84, FY 2082/83 and FY 2081/82 — the current year plus the two before it, so you can check an old payslip or compare what the new rules changed. Switching the year switches the whole rule set, not just the band table.

No. Everything runs in your browser. Nothing is uploaded, and there is no account. A shareable link carries the figures in the URL itself, and the copy kept on your device is only so the form is still filled in when you come back.

No. This is an independent calculator from NepalHRM and is not affiliated with, endorsed by or operated by the Inland Revenue Department. It implements the department's rules — the Income Tax Act 2058 as amended and the Finance Act schedule — but it files nothing and speaks for nobody but us.

PAN registration, returns, payment and tax clearance all happen on the IRD's own taxpayer portal at ird.gov.np, and no calculator can do any of them for you.

Work it out with which IRD rules this uses→

NepalHRM, which builds payroll, attendance and HR software for Nepali employers. The tax engine here mirrors the one that runs real payrolls, which is why the working shown matches what a payslip does — including which relief was capped and by which rule.