🔔 Updated Fiscal Year 2083/84: Reflects the personal income tax overhaul delivered in the Budget Speech on 15 Jestha 2083, effective 1 Shrawan 2083 onward.
🧮 Calculate Your Exact Tax & Take-Home Pay Instantly
Use our free, instant Nepal Income Tax & Salary TDS Calculator to calculate your exact monthly TDS, deductions (EPF/CIT/SSF), and net take-home salary.
What is Salary TDS & Personal Income Tax in Nepal?
In Nepal, Tax Deducted at Source (Salary TDS) is the monthly portion of personal income tax that employers withhold from an employee's gross monthly earnings and submit directly to the Inland Revenue Department (IRD). The tax is calculated progressively based on annual taxable income after accounting for statutory deductions such as SSF, EPF, CIT, and life insurance.
What Changed in FY 2083/84 Income Tax Rates?
Nepal's fiscal year rolled over to 2083/84 on 1 Shrawan 2083. The government introduced three major structural changes to personal income tax (TDS):
- Unification of Slabs: The longstanding split between married and unmarried filers has been completely unified for all resident individual taxpayers.
- Doubled 1% SST Threshold: The initial 1% Social Security Tax (SST) threshold doubled from NPR 5,00,000 to NPR 10,00,000.
- Lower Top Marginal Rate: The highest tax bracket has been reduced from 39% down to 29% for annual incomes above NPR 40,00,000.
Current Income Tax Slabs — FY 2083/84 (2026/27)
| Income Slab (NPR) | Tax Rate | Key Notes |
|---|---|---|
| First 10,00,000 (0 – 10L) | 1% | Waived (0%) for registered Social Security Fund (SSF) contributors |
| Next 5,00,000 (10L – 15L) | 10% | Applied on taxable income between 10 Lakhs and 15 Lakhs |
| Next 10,00,000 (15L – 25L) | 20% | Applied on taxable income between 15 Lakhs and 25 Lakhs |
| Next 15,00,000 (25L – 40L) | 27% | Applied on taxable income between 25 Lakhs and 40 Lakhs |
| Above 40,00,000 (> 40L) | 29% | Top marginal tax rate |
Social Security Fund (SSF) Tax Relief & Deductions
Under the Social Security Act, if an employee and employer contribute to the Social Security Fund (SSF):
- The employee's 11% contribution is deducted from gross income before applying tax brackets.
- The 1% Social Security Tax on the first NPR 10,00,000 bracket is fully waived (0% tax).
- Other approved deductions include Citizen Investment Trust (CIT, up to Rs. 3 Lakh), Employee Provident Fund (EPF), and Life Insurance premiums (up to Rs. 40,000).
- Female resident individuals filing independently are entitled to an additional 10% female tax rebate on their total tax liability.
Step-by-Step Salary Tax Calculation Example
Suppose an employee earns a monthly gross salary of NPR 75,000 plus one month's Dashain bonus (Annual Gross = NPR 9,75,000). If enrolled in SSF (11% contribution = NPR 99,000 deducted), Taxable Income becomes NPR 8,76,000. Because this falls under the first NPR 10,00,000 threshold and the employee is in SSF, the 1% SST is waived, resulting in NPR 0 annual salary tax. You can compute exact figures using our interactive Nepal Salary Tax & TDS Calculator.