How to Calculate Salary Tax in Nepal (FY 2083/84)

To calculate salary tax in Nepal for FY 2083/84, add up your yearly salary, bonus and your employer's retirement contribution, subtract approved deductions such as SSF, CIT and insurance, and charge the rest at 1%, 10%, 20%, 27% and 29% across the new slabs. Divide the yearly tax by the months you are paid to get your monthly TDS. If you would rather not do it by hand, my free Nepal salary tax calculator does every step and shows the working.

I built that calculator because the FY 2083/84 budget changed almost every number people had memorised, and the calculators I found online disagreed with each other. So I went back to the source: the rate sheet the Inland Revenue Department published on 22 Shrawan 2083 under the Finance Act 2083. Every number in this guide comes from that sheet, and every worked example below was produced by the same code the calculator runs.

#Key takeaways

• FY 2083/84 has one tax table for single and married taxpayers. The separate couple table is gone.
• The first Rs 10 lakh of taxable income is charged at 1%, the social security tax. SSF and pension fund members do not pay it.
• The rates above that are 10%, 20%, 27% and 29%, and the top rate is much lower than last year's 39%.
• Retirement contributions (SSF, EPF, CIT) are deductible up to Rs 5 lakh or one third of income, whichever is lower.
• Life insurance (Rs 40,000), health insurance (Rs 20,000), building insurance (Rs 10,000) and, new this year, 25% of children's tuition fees (up to Rs 25,000) reduce taxable income.
• Women with salary income only get 10% off their tax.

#The FY 2083/84 income tax slabs

The fiscal year runs from Shrawan 1, 2083 to the end of Asar 2084, which is roughly mid-July 2026 to mid-July 2027. These are the rates for resident natural persons:

The IRD sheet uses Rs 60 lakh as its own example and arrives at a total of Rs 12,45,000. You can check the table against that: 10,000 + 50,000 + 2,00,000 + 4,05,000 + 5,80,000 = 12,45,000.

Three things changed compared with FY 2082/83:

1. The 1% band doubled from Rs 5 lakh (Rs 6 lakh for couples) to Rs 10 lakh.
2. The couple table was removed. Married people who used to elect couple status now use the same table as everyone else.
3. The top rate fell from 39% to 29%, and the 30% and 36% bands were replaced by 20% and 27%.

For a typical salaried professional the difference is large. A Rs 1,00,000 monthly salary with no deductions owed Rs 1,45,000 a year under the FY 2082/83 single table. Under FY 2083/84 it owes Rs 30,000.

#Step 1: Work out your assessable income

Assessable income is everything your employment pays you in the year, before deductions:

• Your monthly gross salary (basic plus allowances) times the number of months you are paid.
• Dashain allowance, bonuses and any other taxable pay.
• Your employer's contribution to SSF or EPF, if it is paid on top of your salary.

The last point surprises people. When your employer pays 20% of your basic salary into the Social Security Fund, the Income Tax Act treats that as part of your employment income. It is added to your income first, and then it comes back out as a retirement deduction in the next step. Some payslips show a gross that already includes it. If yours does, do not add it twice. The calculator has a checkbox for exactly this case.

#Step 2: Subtract your deductions

Deductions reduce the income that gets taxed. For FY 2083/84 the IRD sheet lists:

The retirement limit counts everything together. SSF takes 11% of your basic salary from you and adds 20% from your employer, so 31% of basic goes in. EPF is 10% plus 10%. Voluntary CIT contributions count toward the same limit. If the total is above Rs 5 lakh or above one third of your income, only the limit is deducted.

#Step 3: Apply the slabs

Charge each slice of taxable income at its own rate. This is where many people go wrong: the higher rate applies only to the part of income inside that band, not to the whole amount. Earning one rupee into the 20% band does not make your whole salary taxable at 20%.

The first band is special. It is the 1% social security tax, and it is waived if you contribute to the contribution-based Social Security Fund or to a pension fund. It is also not charged on pension income or for sole proprietorship firms. Paying into EPF or CIT alone does not waive it.

#Step 4: Rebates, credits and monthly TDS

Two adjustments come after the slabs:

• Women's rebate. A resident woman whose only income is salary gets 10% off the tax she would otherwise pay.
• Medical tax credit. You can claim 15% of approved medical bills, up to Rs 750, against your tax.

Your employer then divides the yearly tax by the months you are paid and deducts that each month as TDS. If your salary changes during the year, payroll recalculates the remaining months, so your monthly deduction can move even though the slabs did not.

#Worked examples for FY 2083/84

These were calculated with the salary tax calculator for a single taxpayer paid for 12 months.

Rs 60,000 a month, no retirement fund. Assessable income is Rs 7,20,000. All of it sits in the 1% band, so the tax is Rs 7,200 a year, or Rs 600 a month.

Rs 1,00,000 a month, no retirement fund. Assessable income is Rs 12,00,000. The first Rs 10 lakh costs Rs 10,000 and the next Rs 2 lakh at 10% costs Rs 20,000. Total: Rs 30,000 a year, Rs 2,500 a month. If the employee is a woman with salary income only, the 10% rebate brings it to Rs 27,000.

Rs 1,00,000 a month with SSF on a Rs 60,000 basic salary. The employer's 20% (Rs 1,44,000 a year) is added, so assessable income is Rs 13,44,000. The SSF total is 31% of basic, Rs 2,23,200, which is under the limit and fully deductible. Taxable income is Rs 11,20,800. The first band is waived for SSF members, and Rs 1,20,800 at 10% is Rs 12,080. That is Rs 1,006.67 a month, less than half of the non-SSF case.

Rs 1,00,000 a month plus a Rs 1,00,000 bonus, Rs 60,000 CIT and Rs 25,000 life insurance. Assessable income is Rs 13,00,000, deductions are Rs 85,000 and taxable income is Rs 12,15,000. Tax: Rs 10,000 plus Rs 21,500, so Rs 31,500.

Rs 2,50,000 a month with Rs 40,000 life insurance. Taxable income is Rs 29,60,000. Tax: Rs 10,000 + Rs 50,000 + Rs 2,00,000 + Rs 1,24,200 = Rs 3,84,200 a year. Under the FY 2082/83 single table the same salary paid Rs 7,30,600.

#What about FY 2082/83?

If you are filing a return for income earned between mid-July 2025 and mid-July 2026, use the FY 2082/83 tables. Single taxpayers paid 1% up to Rs 5 lakh, 10% to Rs 7 lakh, 20% to Rs 10 lakh, 30% to Rs 20 lakh, 36% to Rs 50 lakh and 39% above that. Couples had a Rs 6 lakh first band, then Rs 8 lakh, Rs 11 lakh, Rs 20 lakh and Rs 50 lakh. Building insurance was capped at Rs 5,000 and the tuition deduction did not exist. The calculator has both years in the fiscal year menu, and the tool page shows both tables.

#Common mistakes I see

• Applying the top rate to the whole salary. Slabs are progressive. Only the part above each threshold pays the higher rate.
• Forgetting the employer's retirement share. It increases assessable income before it is deducted, and leaving it out makes the numbers look slightly different from your payslip.
• Assuming EPF waives the 1%. Only SSF and pension fund members skip the social security tax.
• Deducting more than the limit. A large CIT top-up helps only until contributions reach Rs 5 lakh or one third of income.
• Using last year's slabs. Many blog posts and spreadsheets still show the 30%, 36% and 39% rates. They are for FY 2082/83.

#How I built the calculator

The calculator is a small piece of vanilla JavaScript that runs entirely in your browser. Nothing you type is sent anywhere, which matters for salary details. The tax rules live in one file with the slabs and limits for each year, written straight from the IRD sheet, and the same file builds the tables and examples on the tool page when the site is generated. Automated tests check it against hand-calculated cases, including the Rs 60 lakh example from the IRD sheet, so the page and the calculator cannot drift apart.

It covers salary income for resident individuals. It does not cover the extra exemption for pension income or for people with disabilities, the foreign allowance for diplomatic staff, or business, rental and investment income. If any of those apply to you, ask your employer's payroll team or a tax adviser.

If you keep your finances on paper too, my invoice generator and PDF tools are free and private in the same way.

#FAQ

#What is the income tax rate in Nepal for FY 2083/84?

For FY 2083/84 the same table applies to single and married taxpayers: 1% on taxable income up to Rs 10 lakh, 10% from Rs 10 to 15 lakh, 20% from Rs 15 to 25 lakh, 27% from Rs 25 to 40 lakh, and 29% above Rs 40 lakh (27% plus a 2% surcharge).

#Is salary up to Rs 10 lakh tax free in Nepal?

Only for contributors to the Social Security Fund or a pension fund. Everyone else pays 1% social security tax on the first Rs 10 lakh of taxable income, which is at most Rs 10,000 a year.

#How much SSF, EPF and CIT can I deduct?

All approved retirement contributions together are deductible up to Rs 5 lakh a year or one third of your assessable income, whichever is lower. The employer's share is first added to your income and then deducted.

#How is TDS on salary calculated each month?

Your employer projects your taxable income for the whole year, applies the slab rates, and divides the yearly tax by the months you are paid. If your pay changes, the remaining months are recalculated.

#Is there still a separate couple slab?

Not for FY 2083/84. The Finance Act 2083 uses one table for everyone. The couple table with its Rs 6 lakh first band applies only to FY 2082/83 and earlier.

#Do women get a tax rebate in Nepal?

Yes. A resident woman whose only income is salary gets a 10% rebate on the tax she would otherwise pay.

#Wrapping up

Salary tax in Nepal is four steps: add up assessable income, subtract deductions within their limits, apply the slabs band by band, then take off rebates and credits. FY 2083/84 made the result much smaller for most salaried people, especially SSF members, who now pay nothing on the first Rs 10 lakh. Put your own numbers into the free Nepal salary tax calculator to see your yearly tax, monthly TDS and the slab-by-slab working, and check the official IRD rate sheet whenever a new budget comes out.