How Income Tax Works in Nepal
Nepal reformed salary tax in 2026 (Finance Act 2083, FY 2083/84): one unified schedule of 1%/10%/20%/27%/29%. The 1% first band is the Social Security Tax — waived for SSF contributors. Note the tax year runs mid-July to mid-July.
The FY 2083/84 slabs (annual)
| Annual taxable income (NPR) | Rate |
|---|---|
| Up to 1,000,000 | 1% (waived for SSF contributors) |
| 1,000,001 – 1,500,000 | 10% |
| 1,500,001 – 2,500,000 | 20% |
| 2,500,001 – 4,000,000 | 27% |
| Above 4,000,000 | 29% |
SSF — on basic salary only
Employees contribute 11% of basic salary (10% pension + 1% SST); the employer adds 20%. The most common payroll error is computing it on gross — it's basic only. Deductible up to NPR 500,000/year. Women with only employment income get a 10% rebate on computed tax.
Worked example
Annual salary NPR 1,800,000 (basic 1,200,000, SSF contributor): SSF = 132,000. Taxable = 1,668,000. Tax = 50,000 + 20% × 168,000 = NPR 83,600/year. Monthly take-home ≈ NPR 132,033.
Try it: Nepal salary calculator →
Sources: Finance Act 2083, IRD Nepal. Estimate only — not tax advice.