Nepal Freelance Income Tax Calculator
नेपाल फ्रिल्यान्स आयकर
Estimate tax on foreign-currency and domestic freelance income: 5% final withholding on qualifying exports plus slab tax on the rest.
Work out tax on foreign-currency and domestic freelance income. The calculator separates the 5% final withholding on qualifying exports from slab-taxed income, then applies TDS and bank credits to show what is still payable.
- Qualifying foreign income
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- 5% final tax on foreign income
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- Domestic + other income
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- Net business income after expenses
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- Slab income before deductions
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- Deductions applied
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- Tax at slab rates
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- Total annual tax
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- Tax already collected / withheld
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- Still payable
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- Refundable / excess credit
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- Marginal rate on slab income
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- Effective rate on gross income
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- VAT registration (Rs 30 lakh services threshold)
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Income categories and treatment
| Category | Gross | Treatment | Tax |
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Slab breakdown of the domestic / other portion
| Slab | Rate | Income in band | Tax |
|---|
About the freelance income tax calculator
Freelancers in Nepal do not all pay tax the same way. Money earned in foreign currency from exported services can fall under a 5% final withholding rule, while fees from Nepali clients, salary and rent are taxed on the ordinary progressive slabs. This calculator keeps the two regimes separate, applies the rules for the fiscal year you choose, and shows how much tax is still payable after the bank's 5% collection and any TDS your clients withheld.
The 5% foreign-currency rule
For a resident natural person who is not operating a registered business, foreign-currency receipts through a licensed bank for software or electronic services, consultancy, or audio-visual exports can be taxed at 5% of the gross amount. From FY 2083/84 the Finance Act treats this as a final withholding payment: expenses, retirement contributions and the female rebate do not reduce it, and the income is not added to the slab calculation. The bank usually collects the 5% when the money is credited.
When the 5% does not apply
All four conditions have to be met. A registered business or business PAN, payment in NPR or through an informal channel, or work outside the qualifying list moves the income back into ordinary slab taxation. That is not automatically worse — expenses and deductions become available — but the rate is usually higher. The calculator lets you switch each condition off so you can see both results.
Domestic clients, TDS and VAT
Nepali companies often deduct TDS before paying a freelancer: commonly 1.5% when the freelancer issues a VAT invoice, or 15% on a PAN-only bill. Those amounts are credits against your final tax, so enter the total withheld and keep the certificates. Service turnover above Rs 30 lakh usually triggers VAT registration; exported services are zero-rated, but registration still means monthly returns. The indicator in the result is a prompt to check, not a registration decision.
About the Rs 40 lakh figure
You may see the 5% freelancer rate described as capped at Rs 40 lakh. The Rs 40 lakh threshold in the Income Tax Act is a filing threshold, not a ceiling on the 5% rate. This calculator applies 5% to the full qualifying foreign amount. Filing practice around the final-withholding change is still settling, so confirm your own case with the Inland Revenue Department or a tax professional.
What this calculator assumes
Amounts are annual and in NPR, using the exchange rate at the time of receipt. It assumes you are a resident natural person, that the foreign money arrived through a licensed bank, and that the income belongs to the fiscal year you selected. It does not prepare a return, calculate advance tax instalments, or decide whether a particular contract qualifies. Use the result for planning and keep the bank advice, contracts and TDS certificates.