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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

It 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.

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%.

It 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.

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.

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.

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.

It 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.

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.