Nepal (NP)

Nepal is a landlocked Himalayan nation between India and China, home to eight of the world's ten highest peaks including Mount Everest (8,849m).

Capital: Kathmandu

Region: Asia

Language: Nepali

Currency: NPR (Rs)

Cost of living: Very affordable (index 18)

Emergency: 100

Tax & Payslip Guide

Understanding your taxes in Nepal — tax year Nepali fiscal year: mid-July to mid-July (FY 2082/83 is approximately July 2025 – July 2026).

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Tax Year

Nepali fiscal year: mid-July to mid-July (FY 2082/83 is approximately July 2025 – July 2026)

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Filing Deadline

Individual and business deadlines depend on taxpayer type; many income-tax returns are due within three months after fiscal year end unless extended. Payroll withholding is monthly.

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VAT (Standard)

13%

📊 Income Tax Brackets

Income from	Income to	Rate	Notes
0	500,000	1% Social Security Tax (0% for qualifying SSF contributors)	FY 2082/83 (2025-26) first slab for unmarried individuals. A 1% Social Security Tax applies; this is waived for qualifying SSF contributors or those with sole proprietorship, pension, or contribution-based pension income. Married couple threshold: NPR 600,000.
500,001	700,000	10%	FY 2082/83 slab. Rates unchanged from FY 2081/82.
700,001	1,000,000	20%	FY 2082/83 slab.
1,000,001	2,000,000	30%	FY 2082/83 slab.
2,000,001	5,000,000	36%	FY 2082/83 slab.
5,000,001	∞	39%	FY 2082/83 highest individual slab.

🏛️ Social Contributions

Social Security Fund (SSF)

Employee: 11% of basic salary

Employer: 20% of basic salary

Total 31% contribution for registered employees, allocated to medical, accident, dependent family and old-age schemes. SSF contributors receive a waiver on the 1% Social Security Tax on the lowest income slab.

Provident Fund / gratuity (legacy arrangements)

Employee: Usually 10% PF where applicable

Employer: Often 10% PF plus gratuity provisions where applicable

Some employers still use legacy provident fund structures. Avoid double-counting with SSF if both apply.

🛒 VAT Rates

13%

Standard

Some exempt or zero-rated supplies

Reduced

VAT registration is generally required at statutory turnover thresholds. Service businesses, imports and digital/consultancy structures should get current advice before invoicing.

🧾 Sample Payslip Decoder

Gross Salary NPR 200,000/month

Gross salary + NPR 200,000

SSF employee contribution (11% of basic component, est. NPR 120,000 basic) - -NPR 13,200

Income tax / TDS (monthly projection at 2025/26 slab rates) - -NPR 44,000

Net Salary (Take-home) Approx. NPR 143,000/month

Illustrative for FY 2082/83 (2025/26). Annual gross NPR 2,400,000; SSF at 11% of estimated basic NPR 1,440,000 = NPR 158,400/year; taxable income approx. NPR 2,241,600 after SSF; income tax approx. NPR 529,000/year (NPR 44,000/month) applying slab rates: 1% on NPR 500,000, 10% on NPR 200,000, 20% on NPR 300,000, 30% on NPR 1,000,000, 36% on remaining. Actual net depends on basic/allowance split, employer PF, tax credits and benefit treatment.

🌍 Special Expat Tax Rules

No broad expat tax ruling. Foreign residents are taxed based on Nepal-source income and residence facts; employer-provided housing, schooling, flights and allowances can create taxable benefit questions.

📋 Double Tax Treaties

Nepal has a limited treaty network including India, China, Korea, Norway, Qatar, Austria, Mauritius, Sri Lanka, Thailand and others. Treaty relief is procedural and should be documented before payroll or withholding decisions are made.

Inland Revenue Department (IRD) Nepal

https://ird.gov.np

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