A higher gross is not always the better offer. The retirement fund, the basic/allowance split and the festival bonus all change what reaches your account — and what quietly builds up in your name.
The short answer
The better offer is the one with more total value — take-home after TDS plus everything paid into your own PF, SSF and CIT. On FY 2083/84 rules a smaller gross with SSF often wins, because the employer adds 20% of basic to your fund and SSF members are not charged the 1% Social Security Tax. Compare the two packages below; the tool prices both on the same rules in the same second.
These cannot differ between two offers, so they are set once.
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Before any deduction — the figure written on the offer letter.
Transport, fuel, phone — taxable cash on top of salary.
Dashain bonus and any other one-off payment. Fully taxable.
Enter a monthly salary to price this offer under FY 2083/84 rules.
Tap the name to rename
Before any deduction — the figure written on the offer letter.
Transport, fuel, phone — taxable cash on top of salary.
Dashain bonus and any other one-off payment. Fully taxable.
Enter a monthly salary to price this offer under FY 2083/84 rules.
Type each monthly gross, add any allowance or festival bonus, and pick the retirement fund each employer runs. Nothing is sent anywhere — the whole comparison happens in this browser.
The example loads Rs 80,000 with no fund against Rs 75,000 with SSF — the case where the smaller salary is worth more.
The offer with more total value: monthly take-home after TDS, plus every rupee paid into your own PF, SSF or CIT. Cash alone flatters the offer with no retirement fund, because a fund moves part of your package out of this month's bank balance and into a balance you keep.
Four things decide it, and none of them are visible in the gross figure on the offer letter:
On FY 2083/84 rules, the NPR 80,000 offer pays NPR 9,200 more in hand each month — yet the NPR 75,000 offer with SSF is worth NPR 57,000 more over the year once the fund balances are counted, and pays NPR 14,000 less tax.
Both offers include a one-month festival bonus, basic set at 60% of gross, and a full twelve months of employment. Load them into the tool above with “See a worked example” to change any figure.
| Line | Offer A · no fund | Offer B · SSF |
|---|---|---|
| Monthly gross | NPR 80,000 | NPR 75,000 |
| Retirement fund | None | SSF · 11% you, 20% employer |
| Tax for the year | NPR 14,000 | NPR 0 |
| In hand each month | NPR 85,500 | NPR 76,300 |
| Into your own funds, a year | NPR 0 | NPR 1,67,400 |
| Total value, a year | NPR 10,26,000 | NPR 10,83,000 |
| Cost to the employer | NPR 10,40,000 | NPR 10,83,000 |
The tax line is where the surprise sits. The SSF offer pays NPR 0because SSF members skip the 1% band, and because the employer's contribution is added to income and then deducted again as retirement relief — cancelling out below the NPR 5,00,000 ceiling. The offer with no fund pays the 1% on the whole first band.
SSF gives you more: 20% of basic from the employer against PF's 10%, plus the 1% Social Security Tax waiver and medical, accident and pension cover. PF leaves slightly more cash in hand, because you contribute 10% of basic rather than 11%.
| No fund | Provident Fund | Social Security Fund | |
|---|---|---|---|
| You contribute | — | 10% of basic | 11% of basic |
| Employer contributes | — | 10% of basic | 20% of basic |
| 1% Social Security Tax | Charged | Charged | Waived |
| Counts towards relief | — | Yes, NPR 5,00,000 combined | Yes, NPR 5,00,000 combined |
| Cash in hand | Highest | Middle | Lowest |
| Total value | Lowest | Middle | Highest |
The relief ceiling is the one place a large salary should look twice. PF/SSF and CIT share a single NPR 5,00,000 annual ceiling, and the employer's contribution counts towards it. Above that ceiling the excess employer contribution stays taxable — you are taxed on money you never received. The guide works through where that starts to bite.
Take the employer's fund contribution out of the CTC first. CTC is what the company spends, not what you are paid: it includes the employer's PF or SSF, and sometimes insurance premiums and the festival bonus as well.
A CTC of NPR 12,00,000 with SSF on a 60% basic is not a NPR 1,00,000 monthly salary. Ask for three numbers before comparing anything: the monthly gross, the basic figure, and which fund the employer runs. Then price both offers on take-home and total value — the “Cost to the employer” row in the tool above is the figure to check a quoted CTC against.
Put both offers on the same footing
Write each offer as monthly gross for twelve months, plus any taxable allowance and the festival bonus. An offer quoted as CTC includes the employer's fund contribution, so it is not comparable until that is taken out.
Write down each retirement set-up
None, Provident Fund, or Social Security Fund — and what counts as basic salary, because both contributions are charged on basic and not on gross.
Compare take-home, not gross
Run each package through the FY 2083/84 bands. Tax is assessed on the year, so the festival bonus and allowances move the monthly TDS on every other month too.
Add what builds up in your name
Your own contribution plus the employer's is money you own, even though it never reaches your account. Take-home plus fund contributions is the honest measure of an offer.
Get the difference in writing before you accept
Ask for the basic/allowance split, the fund the employer runs, the bonus policy, and whether the quoted figure is gross or CTC. Each of those changes the answer by more than most negotiations do.
Tax bands run 1% on the first NPR 10,00,000 of taxable income, then 10% to NPR 15,00,000, 20% to NPR 25,00,000, 27% to NPR 40,00,000 and 29% above. One schedule now applies to everyone, married or not.
| SSF — you contribute | 11% of basic |
|---|---|
| SSF — employer contributes | 20% of basic |
| PF — you and your employer | 10% + 10% of basic |
| 1% Social Security TaxProvident Fund members still pay it | Waived for SSF members |
| Retirement relief ceilingPF/SSF and CIT share it, employer contribution included | NPR 5,00,000 a year |
| Life insurance relief | NPR 40,000 a year |
| Health insurance relief | NPR 20,000 a year |
| Rebate for a resident woman | 10% of the tax computed |
| Effective rate in the exampleNo fund against SSF, on the salaries above | 1.35% vs 0% |
The better offer is the one with more total value: monthly take-home after TDS plus everything paid into your own PF, SSF and CIT balances. A higher gross can still lose, because an SSF employer adds 20% of basic salary to your fund and SSF members do not pay the 1% Social Security Tax band at all. Compare take-home and fund contributions together, never gross against gross.
No. Four things move the answer: the retirement scheme (none, PF or SSF), what share of gross counts as basic salary, how much of the package is paid as taxable allowance, and the size of the festival bonus. Two offers with the same gross can differ by tens of thousands of rupees a year once those are applied.
CTC is what the employer spends, so it already includes the employer's PF or SSF contribution — money that never reaches your bank account. To compare fairly, strip the employer contribution out of the CTC to get the gross salary, then price both offers on take-home. A CTC figure always looks larger than the salary behind it.
Yes, in both directions. You contribute 10% of basic to a Provident Fund or 11% to the SSF, so cash in hand falls. In exchange the employer adds 10% (PF) or 20% (SSF) of basic in your name, both contributions count towards the NPR 5,00,000 retirement relief, and SSF members are not charged the 1% Social Security Tax. Lower take-home with SSF frequently means higher total value.
Yes. The festival bonus is assessable employment income in the year it is paid, taxed at your normal band rates. An offer with a one-month bonus is genuinely worth more than one without, but the extra is taxed — count it after tax, not before.
Both are fully taxable, so income tax barely notices the difference. Basic salary decides how much PF or SSF is contributed by you and by your employer, so a higher basic means a little less cash now and a larger fund balance later. If you need cash today, ask for allowance; if you want the employer's matched contribution to grow, ask for basic.
The Income Tax Act 2058 and the Finance Act that sets each year's bands and ceilings.
Contribution rates, the contribution base and the benefits an SSF member is entitled to.
Figures on this page are an estimate for salaried employment income. Your employer's payroll may differ on allowances, one-off payments or a mid-year change. For a filing decision, talk to a registered accountant.