Knowing how much salary tax is withheld is important for budgeting and for filing correctly. For FY 2083/84 (2026/27), Nepal has a unified tax schedule. Here’s how to check and estimate your salary tax.
How salary tax works in Nepal
Salary tax is income tax on employment income, and most employees pay it through Tax Deducted at Source (TDS). Your employer calculates an estimate of your annual tax, divides it across the remaining months, and deposits the deducted amount with the Inland Revenue Department. You receive the net salary after TDS and other deductions such as SSF, provident fund, and insurance.
This means the tax on your salary slip is not necessarily your final liability. It is a monthly estimate based on the salary, allowances, and declarations your employer has at that time. A bonus, a mid-year raise, a change in SSF status, or a late investment declaration can all change the final number.
Gross salary, taxable salary, and take-home pay
These three figures are often confused:
- Gross salary is the total package before any deduction, including basic salary and allowances.
- Taxable salary is gross salary after eligible deductions and exemptions. Retirement contributions and insurance premiums may reduce it within statutory limits.
- Take-home pay is what reaches your bank account after TDS, SSF, provident fund, and other deductions.
When someone says “my salary is Rs 80,000”, they usually mean gross; the tax calculation starts from the annual taxable figure.
Understand FY 2083/84 slabs (individual)
As per the Finance Act 2083, the individual tax slabs are:
| Taxable income band (Rs) | Rate | Notes |
|---|---|---|
| Up to 10,00,000 | 1% | Treated as Social Security Tax (SST) in employment context; waived for SSF contributors |
| 10,00,001 – 15,00,000 | 10% | Next band |
| 15,00,001 – 25,00,000 | 20% | Next band |
| 25,00,001 – 40,00,000 | 27% | Next band |
| Above 40,00,000 | 29% | Top band (includes 2% surcharge structure) |
The separate couple schedule was removed for FY 2083/84. Deductions (retirement/insurance) may apply as per rules.
The important point is that these are marginal rates. Moving into the 20% band does not mean all your income is taxed at 20%. Only the portion above Rs 15,00,000 is taxed at that rate. The rest continues to be taxed at the lower bands.
How to calculate your tax step by step
- Add your annual salary and taxable allowances.
- Subtract eligible retirement contributions and insurance premiums within the permitted limits.
- Apply each slab only to the income that falls inside it.
- Add the tax from each band.
- If you contribute to SSF or an approved retirement fund, check whether the 1% SST should be waived.
- Subtract tax already withheld or paid.
- The result is either a small refund/credit or additional tax to pay.
Worked example: Rs 12,00,000 taxable income
- First Rs 10,00,000 at 1% = Rs 10,000
- Next Rs 2,00,000 at 10% = Rs 20,000
- Total = Rs 30,000
- If the 1% SST is waived for an SSF contributor, the tax becomes Rs 20,000.
- Monthly TDS is roughly Rs 1,667 instead of Rs 2,500.
Worked example: Rs 18,00,000 taxable income
- First Rs 10,00,000 at 1% = Rs 10,000
- Rs 10,00,001 to Rs 15,00,000 at 10% = Rs 50,000
- Rs 15,00,001 to Rs 18,00,000 at 20% = Rs 60,000
- Total = Rs 1,20,000
- With the SST waiver, the tax becomes Rs 1,10,000, or about Rs 9,167 per month.
The effective rate stays far below the highest slab.
Method 1: Check via IRD Taxpayer Portal (official)
This is the most reliable way to see what has been reported/withheld.
- Login: Go to taxpayerportal.ird.gov.np and sign in with your PAN credentials.
- Review TDS/returns: Look for TDS details, employer filings, tax credits, and any returns filed under your PAN.
- Verify against salary slip: Compare the tax deducted shown with your monthly/yearly salary slips.
- Download/record: Save any acknowledgement receipts for your records.
If deposited TDS does not appear in your portal, wait a few days, then ask payroll for the acknowledgement.
Method 2: Estimate using a calculator
For planning, use an online calculator. On this site, use the Nepal Salary Tax Calculator which follows FY 2083/84 slabs and includes SSF considerations.
What you’ll need:
- Gross monthly/yearly salary
- SSF contribution status (if applicable)
- Allowances/deductions (as applicable)
- Any other taxable income you want to include
The official figure comes from payroll and the portal, not a calculator.
Reading your salary slip
A typical Nepali salary slip shows basic salary, allowances, gross pay, SSF or provident fund, insurance, TDS, and net pay. Check three things every month: the gross figure matches your contract, the SSF deduction matches the current rate, and the TDS is roughly consistent with your annual estimate.
A TDS jump after a bonus is normal, since bonuses are taxed when paid.
Key points to know
- SSF exemption: If you contribute to SSF/approved retirement fund, the 1% SST is generally waived. Check your payslip.
- Allowances: Some allowances are taxable; others partially exempt as per rules. Your employer applies these per prevailing regulations.
- Bonuses/incentives: Usually included in taxable income as per rules.
- Final tax depends on declarations: Deductions claimed (insurance/retirement) affect taxable income.
- Freelance/domestic side income: If you have other income, it may need to be declared separately.
- Job changes: If you change employers mid-year, give the new employer your previous salary and TDS details so the annual estimate is not overstated.
Common mistakes
- Relying only on rough online tables without checking the portal
- Ignoring SSF status when estimating
- Assuming old FY 2082/83 slabs still apply
- Not reconciling employer TDS with portal data
- Forgetting to declare freelance or rental income
- Comparing gross salaries without accounting for different benefit structures
Timeline and records
Employers generally deposit TDS monthly and file the related return for each period. Keep your salary slips, annual salary certificate, SSF statements, and insurance premium receipts for at least the period the tax office can review. When you change jobs, keep the final salary certificate and TDS details from the old employer; they are easy to lose and hard to reconstruct later.
Checklist
- Get your latest salary slip
- Login to IRD Taxpayer Portal and verify TDS
- Estimate with calculator for FY 2083/84
- Check that SSF/retirement contributions are reflected
- If discrepancy exists, raise with HR/payroll or your tax office
- Keep annual salary and tax documents in one folder
This guide is for informational purposes only. Tax rules change annually; confirm with the IRD or a qualified tax professional.
